Dr Doom And Mr Fantastic

Marc Faber, or Dr Doom, as he is known in certain financial circles, has a cheerless, or some might say pragmatic outlook on economic events. His site, appropriately enough, is at gloomboomdoom.com He has an unfortunate knack at getting things right, though, which makes him all the more annoying to the nay-sayers, the 'grass-is-always-green' kind of people, and his arch-enemy, Mr Fantastic - Alan Greenspan

Dr Faber's comments have included recent thoughts such as

There are several reasons why it is likely that the US economy will weaken far more than is expected by the bullish Wall Street crowd, whose only interest is to get as many investors to invest in the stock market and then to churn the accounts in order to earn high commissions
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And, in the case that oil prices were to rise in real terms to their 1980s highs – well over US$ 100 (see figure 2) – then the foundation for World War Three would be laid and most certainly begin to weight heavily on equity prices for which I cannot share the prevailing widespread optimism anyway. Financial stocks have begun to weaken and this is an indication that something is not quite right!
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In fact, looking at the history of empires, I wonder why anyone would wish to have an empire because in the long run its maintenance proves to be far too costly. Inevitably, empires experience inflation, rising interest rates, and a depreciating currency.
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Credit has to be given to Mr. Greenspan. By bailing out the S&L Associations in 1990 he contributed to the creation of the emerging market bubble of 1994, which led to the Mexican crisis. Then, by bailing out Mexico - with the then acting Treasury Secretary Robert Rubin's help - he contributed to the emerging market debt excesses that led to the Russian crisis and the LTCM debacle of 1998. Again he bailed out the system with an enormous liquidity injection and created in the process financial history's biggest bubble – the NASDAQ bubble of 1999/2000. But until then, Mr. Greenspan was only a “serial” bubble blower.
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Mr Greenspan has steered the bulking ship of the US economy through quite some tricky waters. Recent concerns that his deft handling might not be enough cause some concern over his continued role, but he is still considered "The World's Most Powerful Banker" His constant reassurances through the troughs of the recent recession contributed somewhat to the pull-out. He is constantly railed at, praised, mocked and asked to prove his human credentials by conspiracy theorists. He is a ardent follower

Article Author: Aaman Lamba

Aaman Lamba is a Blogcritics editor, as well as the Publisher of Desicritics.org, a Blogcritics network site covering media, politics, culture, sports and more with a global South Asian focus

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