- The Richest Members of the US Congress
- New Consensus Sees Stimulus Package as Worthy Step
- Black Friday Deals May Not Signal Retail Comeback
- Thanksgiving Week Stuffed With Economic News
- UPS Sets New Rates For 2010
- Wall Street Jobs Slow to Return Despite Record Profits
- Investors to Goldman: Be Less Greedy
- Victoria's Secret Hopes to Rekindle Desire for Lingerie
- 'New Moon' Takes Record $72.7M Box Office Bite
- How Stock Investors Can Play Holiday Travel
- Time Lapse World Series Is A Great Play
- Hirschhorn: Greed...or Fear
- My Top 10 Tech Toys for the Holidays
- iPhone a Better Gaming Platform Than Android?
- May Day For Dendreon
- 100% Mortgage Financing From USDA
- Holiday Tipping: Who And How Much
- Deep Discounts Should Make It a Very Tech-y Holiday
MOST SHARED
- Analyze This?
- Realty Check: USDA Home Loans
- Dems Snare 60 Votes to Move Ahead on Health Care
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Health Care Bill Nears Test Vote
- Warren Buffett and Bill Gates: Keeping America Great
- 100% Mortgage Financing From USDA
- How Stock Investors Can Play Holiday Travel
- Sanofi-Aventis Falling Off a Patent Cliff?
Text Size 
U.S. Treasury Secretary Henry Paulson’s sweeping measures to bailout the financial system will probably fail, Marc Faber, editor & publisher of the Gloom, Boom and Doom Report, tells CNBC's Asia Squawk Box.
The proposed $250 billion infusion into financials is meaningless -- merely a drop of water on a hot stove, Faber, popularly known as Dr. Doom says. These measures do not address the fundamental problem.
"What I object to in all the bailout plans in the Western world is (that) they do not address the fundamental problem. And the fundamental problem is overleveraging,” Faber comments.
(Watch the complete Marc Faber interview on deleveraging on the left)
He adds that the high gearing needs to be brought down, similar to what the Asian financial system had to go through after the 1997 financial crisis.
“The U.S. economy’s debt to GDP has grown from 130 percent in 1980, to 350 percent at the present time,” notes Faber. "The leverage has been under the supervision of the Federal Reserve and the Treasury and everybody encouraged it."
He adds that these unfunded liabilities, which will surface over the next 20 to 30 years, do not deserve a AAA rating.
Faber believes the U.S. budget deficit is going to stay at or above $1 trillion level because the government needs to print money in order to meet all the obligations they've made to rescue the financial system.
"U.S. government bonds should be rated as a junk bond," quips Faber.
Print
Email
- Technology can make or break a fortune in the world of alternative energy.
- Many people are facing the holidays with substantially smaller incomes. Here’s how some are adapting.
- Jim Cramer is a proponent of stocks that pay healthy dividends, and here are his top five dividend plays.
- From salt, to lip balm to envelopes, it turns out that bacon flavoring can sell almost anything.
- The homebuyer's tax credit jacked sales for a while, but 2010 is looking weak. Now what?
- CNBC’s technology reporter Jim Goldman guides you through the best gadgets to buy this holiday season.
Data is a real-time snapshot *Data is delayed at least 15 minutes