The Roubini - Faber Debate

Two of the most provocative and incendiary economic prophets are Nouriel Roubini and Marc Faber. As with most oracles, the denominational sect of doctrines often determines the forecasts. This especially applies to economic prognosticators. Roubini has evolved into an establishment darling working with central bank governors and finance ministers. Faber remains a contrarian investor earning his designation as the genuine "Doctor Doom". Who is right, depends on the immediate and final outcomes of the international financial troubles. Money markets volatility and fiscal debt obligations are integral components of commercial transactions and political economic policy.

The barometric gauge of financial health and stability has invariably been the price of gold. Often overlooked is that the price is reflected by the exchangeability into different currencies. Therefore, any valid assessment of the true value of gold must factor in the real purchasing power within the coinage of local tender.

The preliminary appraisal of what seemingly are contradictory positions is that both are correct, depending on the current location of the time continuum for world financial markets. The overriding ability of central banksters to paper over catastrophic crises and deflationary dislocations, seem to be unlimited. Coordinated rescue plans are frequently disguised by currency fluctuations and equity swings, but the real measure of maintaining financial solvency requires that bond rollovers and new floats be sold in the marketplace. With the immergence of the Federal Reserve purchase of government debt, as an essential resort to keep the funding game going, the era of rapid devaluation, has begun.

Does this necessity sound like an environment where the "crises are over"? As for the "risk of high inflation no longer a big worry", depends greatly on the credibility level of government reporting statistics. Just maybe Roubini’s incorporation into the Davos jet set means that his distance from middle class experiences reflect his newly found associations. Where is this vaulted economic recovery and a proliferation in the consumer spending? Dividends seldom trickle down to the vast numbers who abandoned Wall Street investments. If real interest rates were truly rising, when will the saver see a better return on their money? Roubini fails to mention that China and India have been buying gold, but in a recent article about Russia – we find out that the biggest country in the World might as well be the biggest buyer of gold. Finally, gold was juiced by right-wing fanatics in the US! Hence, we are supposed to believe that the globalists’ paper debt created system is rational and that Austrian School economics are extremists. So much for the wisdom of Roubini and the reason, the old Dr. Doom finds the moniker wearisome and says it no longer accurately reflects his opinions.

No honest person can dispute Faber’s claim - "the majority loses, and the minority wins". What is still debatable is the timing of the looming break down of the fiat financial structure. The prospects for the inevitable, seems prudent, "When the asset bubble bursts, financial assets will be particularly vulnerable." How long can 190 trillion dollars of debt be serviced, when it is impossible to grow the world economy out of a mathematical impossibility?

The overriding issue in not about the current convertibility of gold into whatever paper species is still solvent. The conclusive finality is that a newly issued medium of exchange will be imposed under a terminable collapse of the world economy. All signs point that gold will be part of a desperate attempt by central banks to launch a world currency. The ultimate risk that outlaws gold, as once was the case in the U.S., for private ownership, is the gravest danger.

The Roubini model excludes the financial doom that Faber believes to be unavoidable. As long as it lasts, careerist economists will enjoy the payoffs from the paper-banking establishment. Yet in the end, the authentic "Doctor Doom" will prevail.