Marc Faber Predicts QE18, Wenzel on Roubini, and Japan Summary

God I love this guy.  Since I don't feel like writing it, here is the summary from Zerohedge:

Marc Faber appeared earlier on CNBC in response to a plunging market, and gave his latest updated outlook on QE3... and 4, 5, 6, 7 and 8 (not to mention 18). "We may drop 10 to 15 percent. Then QE 2 will come, (then) QE 4, QE 5, QE 6, QE 7—whatever you want. The money printer will continue to print, that I'm sure. Actually I made a mistake. I meant to say QE 18."

"I think Mr. Bernanke doesn't know much about the global economy but he probably watches the S&P every day."

"The S&P drops 20 percent (and) all the critics will be silent and they will all applaud new money-printing."

And now it has just been reported that Federal Open Market Committee (seven members of the Federal Reserve Board plus five of the twelve Federal Reserve Bank presidents) has voted unanimously to continue QEII.  Their statement on inflation in brief:

The recent increases in the prices of energy and other commodities are currently putting upward pressure on inflation. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. The Committee continues to anticipate a gradual return to higher levels of resource utilization in a context of price stability.

Did You Know that if the $1/$35 gold standard were in place today, a barrel of oil would only be $2.60?

This comes from a decent article in Forbes today from Charles Kadlec.  While his calculation may be true by today's standards, I highly doubt that it is all so simple.  If the dollar was still under F.D.R.'s gold standard, something tells me we would see a completely different supply of oil today.  Still, Kadlec places blame squarely on the Fed for high gas prices.  Though the increase in the cost of gas is being affected by the events in Libya and Japan, don't be mistaken, prices were rising before both crises.

Since we are on the topic of devaluing currencies, Nouriel Roubini told CNBC today that the Yen will need to be devalued in order to fund the rebuilding of Japan:

Japan is going to need significant depreciation of the yen to increase its net exports because domestic demand is going to be anemic for a while. Therefore on a fundamental basis, the yen is going to be much weaker rather than stronger because you need improvement of external balance given the shock to the domestic economy.

Robert Wenzel, never one to let Roubini get away with Keynesian ramblings, sets him straight:

Roubini is correct in that Japanese monetary authorities are likely to pump money to lower the value of the yen, which will be damaging to the economy. Where, I differ with Roubini is in his mercantilist/Keynesian view that this is necessary. It simply is not. The Japanese authorities should simply allow the economy to settle and form its own structure. It will be hard for Keynesians to swallow, but supply and demand works, even after a crisis.

Further, while it is savings not consumption that is the key to growth of an economy, it is hard to see how "domestic demand is going to be anemic", given that many people have lost their houses and most other things they own.

Another factor that would pressure the yen, according to Roubini, would be Japan's need to undertake a massive reconstruction effort. That in turn would further increase the country's fiscal deficit.

If you want a brief, and horribly pessimistic, update on Japan, Zerohedge is the place to go:

Japan is back in recession. The incoming tide just brought in 2,000 bodies. Most major companies, including Toyota, Nissan, Honda, and Sony have shut down all domestic production. Tokyo’s subway system is closed, stranding 25 million residents there. Electric power shortages are a huge problem. Half the country’s nuclear generating capacity is now down. 20,000 expatriates waiting at Tokyo’s Narita airport as foreign companies evacuate staff to avoid a nuclear meltdown. $187 billion worth of credit intervention to “save Japan.” 

God help them.  Check out the Nikkei 5-Day Chart:

From what I gather, the Nikkei is the Japanese equivalent of the S & P 500 on the Tokyo Stock Exchange.

I will end with a report from the Washington Post on yet another high ranking government official joining the ranks of big business:

Federal Housing Administration Commissioner David H. Stevens will head the Mortgage Bankers Association after he leaves his current post, sources familiar with the matter said