BTW, I am still in that business though it doesn't occupy much of my time nowadays.
Also, I keep my options of relocating always open and tend to spend half of my time out of the U.S. anyhow.
On the money front, Faber suggests to worry about exchange controls in the U.S. and I do.
financialsense.com
"... JIM: Where does this ultimately lead. When we’re in phase 3, you refer to the dollar starts to fall and could head into a crisis; as people start to exit the dollar that brings down the dollar even more, that means because the US is so dependent on foreign made goods, the price of just about everything starts to go up. In this scenario you see foreign exchange controls imposed in the US, and possibly gold ownership is declared illegal.
MARC: One of the consequences of this scenario is that for the typical household the standard of living will go down eventually. It’s happened already for a lot of people. And the second consequence is that wealth becomes very concentrated in the hands of a few people who are obviously very powerful because in a democracy the people who have the money basically have more power to bring their people into the government, as so forth. It creates a very unpleasant social environment, and what it eventually does is it impoverishes the majority to enrich the minority. At that stage you can get social upheaval, and you can of course get situations where the minority is then like a money aristocracy, and things to the detriment of the majority [may happen], such as in future there may be some very costly expeditions overseas military expeditions, or they’ll blame it on the minority. I mean it’s difficult to tell what the ultimate outcome is, but I would say that in Western society the probability of having at some point a major crisis where people will have to tighten their belts very considerably whether that occurs in a deflationary environment, or as I believe rather in a very high inflationary environment where salaries just don’t go up as much as the cost of living and so people don’t have the money, then at the same time as inflation picks up interest rates go up, and people can’t meet their interest payments and are bankrupt and so forth. All this leads at the end to a major crisis, and in that situation when things get really bad of course after the rich people have moved their assets overseas, then they declare foreign exchange controls. ..." |
