Washington is patting itself on the back for having orchestrated an amazing economic recovery.
However, Washington lawmakers are a delusional bunch of boneheads, say Marc Faber, editor of "The Gloom, Boom & Doom Report," and Mike "Mish" Shedlock, investment adviser at SitkaPacific Capital Management.
“They think we’ve turned the corner,” Shedlock Told Tech Ticker. “I think more damage is coming.”
“Anytime anything goes wrong, they’re blaming it on the weather.”
The economy isn't recovering, the two say, and the United States faces a depressing "eventuality" of either crushing deflation (Shedlock) or runaway inflation (Faber).
The timing and type of this eventuality is uncertain, say the gurus, but they agree it's too late for the United States to change course.
“The day of reckoning has arrived. The question is how long it will take to play out,” Shedlock says. “Wages in the U.S. will have to drop and wages in Asia will have to rise.”
“I think we’ll have the first generation here where our kids are going to be less affluent than their parents.”
For the next 10 years, Faber says the fiscal deficit will stay above a trillion dollars and government debt will go up. “They will have to monetize it and then eventually interest rates will be much higher," he says.
Investors, Faber says, should prepare accumulating some gold. “If I were living in the U.S. and I couldn’t leave, I would build up some assets outside the United States and I would own some property outside of major cities because I believe that the major cities are becoming very dangerous in terms of modern warfare,” Faber says. “You have to become self-sufficient.”
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