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Marc Faber - United States vs China Superpowers

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Published on Mar 21, 2011

For the latest Marc Faber, go to http://MarcFaberBlog.com -

We had this huge intervention in the world, but the reason for the crisis was excessive credit growth. The private sector reacted very well to the crisis. But the government credit is still growing. If you add the unfunded liabilities like Medicare, social security, and medicaid to the debt, then it is currently at about 600% GDP. They cannot raise the interest rates, because if they do then the interest payments on the debt will be too high. A few people in the elite will get really rich, then the United States will go to war and everything is going to collapse. As an investor, you have to do something, and equities are a much better place to hide compared to bonds.

The interest of the US and china are further apart than ever before. You have a declining superpower in the United States, and a rising superpower in China. The United States will want to cling to its position, and China will want to have more and more say in international trade and relations. This dynamic will lead to quite a bit of tension.

The United States doesn't produce enough or save enough based on the amount in the world economy compared to what they consume. Consuming means exactly what the word means. When you consume something, it is gone. The standard of living is going down compared to China, where there is a high savings rate.In many states of the US, 20% of the people are illiterate.

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