Marc Faber - Originaltext @WAL BUCHENBERG, mL, mT

verfasst von Toby0909, 17.05.2002, 17:04

Hallo Wal.
Marc Faber hat einen ganz kleinen Teil seines Reports diesesmal auf seine Website gestellt und jetzt kannst du das ganze in Originalenglisch lesen.......

(Oh mein Gott, jetzt wissen alle, wie schlecht meine Übersetzungen sind:))

Ansonsten kommt demnächst auch der dritte Teil zu Indien - wird aber nicht so lang wie die anderen beiden.


Toby


04-May-02

The Curse of Empires
Marc Faber

Although the US stock market has still failed to exceed its early January high, and although a number of important high tech and telecommunication issues have broken down below their September 2001 lows, there was some great news. We know now that the US is an “Empire”. According to several articles which appeared in the international press, some of the most notable US commentators and scholars believe that, today, America is no mere superpower but a full blown empire in the Roman and British sense. Some observers even feel that no other country has been as dominant culturally, economically, technologically and militarily since the Roman Empire and that America’s soft imperial policies, tenacity and intellect can spread prosperity around the world. This is all great news because when one considers the alternatives such as a Chinese or Russian empire, which are, while no longer communist so still totalitarian in nature, a globally dominant US can probably enforce some kind of a Pax Americana and, therefore, offer the best hope for economic and social development. The bad news, however, is an economic one. All great empires experienced over time, accelerating inflation, rising interest rates and a sharp depreciation of their currency.
In the “History of Interest Rates”, Sydney Homer notes that interest rates have moved in “repetitious patterns” over the centuries and that there was “a progressive decline in interest rates as the nations or cultures developed and throve, and then a sharp rise in rates as each ‘declined and fell’.”
Since US interest rates were in a long term declining trend between 1800 and the 1940s, when US long term government bond yields bottomed out below 2%, and have since then been rising irregularly, we can say that if the US is indeed an Empire, then it may already have passed its zenith. In this respect a quick analysis of the monetary history of the Roman Empire is helpful, particularly since some pundits are now comparing the US to Rome. Until the rule of Nero, the Romans only used pure gold and silver coins. But, having run out money Nero proclaimed in A.D. 64, that hence the aureus would be 10% lighter in weight. So, whereas in the past, 41 aurei had been minted from one pound of gold, from now one the ratio became 45 aurei to the pound of gold. Moreover, he minted a new silver coin, which was not only lighter in weight but also contained about 10% of copper, which meant that the new denarius was worth about 25% less than the old one. Nero had set an important precedent and from the time he was deposed until the sacking of Rome in the second half of the 5th century by Visigoths, Ostrogoths, and Vandals, a succession of emperors continued the practice of increasing the supply of money in the empire by debasing the denarius, which in the end only had a 0,02 silver content! Rome demand for money was insatiable because it was plagued by endless problems including continuous border wars, internal discontent and strife, a heavy dependence on imported goods, which led to a chronic trade deficit, slave rebellions, peasant uprisings in the provinces, power struggles between the rich eastern provinces and the poor ones in the west, plagues, and poor leadership. And each time a new problem crept up, the money printing press was turned on and led to a further debasement of the currency and higher and higher inflation rates, two factors whose importance in the fall of Rome cannot be overlooked.
Also, if we compare the Pax Americana with Rome, the fact is that the Roman Empire only enjoyed a very brief period of “Pax Romana” at the zenith of the Empire under Augustus. But, thereafter, Rome was continuously engaged in some costly wars along its borders or had to take care of uprisings in the provinces and even on the Italian peninsula. So, the Pax Romana was more of a myth than reality and it is no coincidence that Nero’s currency devaluation occurred as the Empire began to weaken, which I suppose is analogous to President Nixon’s closure of the gold window in August 1971 after the US had reached its peak in terms of economic hegemony, which I would place around the 1950s or 1960s. Sidney Homer’s observation of rising interest rates as empires decline would also indicate that the American peak was sometime in the 1940s or 1950s. Lastly, while there is no doubt that the US, having won the Cold War, is militarily far superior to any other nation, it is also a fact that the Roman Empire reached its largest extend under the Emperor Trajan (98-116), at a time when several wars to protect borders had already weakened the Empire. Also, by then the economy on the Italian Peninsula had experienced a terrific slump because its wines were no longer competitive with wines coming from the western provinces. Similarly, manufacturing in the US has gradually been undermined by new centers of production south of the border and in Asia, especially now in China.
The 16th century Spanish Empire under Philipp II encompassed after Spain’s unification with Portugal in 1580 by far the largest territory a sovereign state ever ruled. But prosperity was very short lived because all the gold and silver, which flowed in the 16th century to Spain from its mines in Mexico and at Potosi, were used for a series of costly wars, led to very rapid price increases, and also brought about a total decay of agriculture and manufacturing on the Spanish Peninsula. Thus, the Spanish Crown already defaulted on its loans in 1557, and further defaults occurred in 1575, 1596, 1607, 1627, and 1647, which led to serious crises in major financial centers such as Antwerp, Genoa and Lyons, since they had been the prime financiers of the Spanish loans. The British Empire was in many ways probably the most successful empire in history, because unlike the Roman and Spanish empires it did not depend on its colonies for its wealth but its manufacturing sector was, in the first half of the Industrial Revolution, well ahead of other nations. In 1830, Lancashire had more machines installed than the rest of the world combined. But, over time the empire also proved to be extremely costly to maintain and in the 20th century the United Kingdom had to give up its overseas possessions successively and lost out to other nations economically, a fact which was reflected in the British Pound’s gradual depreciation against strong currencies. So, whereas in 1915, one Pound Sterling bought 25 Swiss Francs, today it only buys about 2.50 Swiss Francs. Moreover, while US interest rates bottomed out in the 1940s, British interest rates already reached their all-time low near the Empire’s zenith in 1896, when yields on Consols fell to 2.21%. Thereafter, Consol yields never again reached these low levels - not even during the depression.
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. This is not to say that there are no good investment opportunities in empires, but in general better opportunities arise elsewhere, and if I am right in assuming that the US empire is already past its peak, then we will have to cope in years to come with higher and higher inflation and interest rates, and a weakening dollar. My advice is, therefore, to avoid for now US financial assets and to invest in commodities such as gold, and the grains as well as in Asian equities


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gesamter Thread:

• Marc Faber - Originaltext @WAL BUCHENBERG, mL, mT - Toby0909, 17.05.2002, 17:04
  • Prima! Hab mir Ausdruck gemacht. (owT) - Wal Buchenberg, 17.05.2002, 17:25
  • Seine Grundthese ist O.K., seine Argumente schief. - Wal Buchenberg, 17.05.2002, 17:50
    • Naja - sehe ich ein bisserl anders - Toby0909, 17.05.2002, 18:09
      • deshalb diskutieren wir ja, weil ich es so sehe, und du ein bisserl anders ;-) - Wal Buchenberg, 17.05.2002, 19:01
        • dann ist ja grundsätzlich alles klar - Toby0909, 18.05.2002, 09:23