Marc Faber on Europe's Financial Theatrics
If he was running Germany, he would have quit the eurozone last week

Marc Faber, renowned publisher of the Gloom, Boom and Doom Report, believes that all the financial machinations in Europe are a cosmetic fix that won't lead to any long-term resolution of the real problem.

Faber states: "If you put one or 100 sick banks in a union, it does not change the fact that they're sick. In my view the markets are rallying because they were grossly oversold. When markets are grossly oversold, especially markets of Portugal, Spain, Italy, France, then any news that is not disastrous news propels stocks higher. Their cosmetic fix basically forces Germans to continue to finance people in Spain and Portugal and Greece that are living beyond their means."

"If I were the Germans, if I were running Germany, I would have abandoned the eurozone last week...It is a costly decision, but losses are there and somewhere, somehow, the losses have to be taken. The first loss is the banks. In the case of Greece, one should have kicked out Greece three years ago. It would have been much cheaper."

July 5, 2012

Dr. Marc Faber [send him mail] lives in Chiangmai, Thailand and is the author of Tomorrow's Gold.

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