Marc Faber has published three interesting pieces on historical asset bubbles — the South Sea Bubble and the Mississippi scheme. Faber is one of the more interesting heterodox economists writing today. I believe that he is aware of the Austrian school and has been influenced by Mises and Hayek. The theme of credit expansion, either through central banking or other forms of paper claims, runs through all of these pieeces:
- “…History reveals a financial system based on paper money depends almost entirely on the confidence of the public in the currency that is issued by the monetary authorities, and that once confidence in a currency is badly shaken, painful consequences are inevitable. The reader should ask himself the question: for how much longer will foreign investors, which are financing the US trade and current account deficit, be willing buyers and holders of American stocks, bonds, and the dollar? Surely, there will be a time when, as was the case at the time of the Mississippi Scheme and the South Sea Bubble, the present ‘chain letter’ type of fiat money operation practised by the US Federal Reserve Board will no longer work and lead to a sharp depreciation of the US dollar…”
- Lessons of History (scroll half way down the page)
- History Repeating (scroll half way down the page)
- The South Sea Bubble and Law’s Mississippi Scheme
-rb
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Mark Faber is well-acquainted with the Austrian school, including Menger, Bawerk, Mises, Rothbard, and Hayek. In an interview I listened to, Faber was asked about the influence of Austrian economics on him and he elaborated the Austrian business cycle, focusing on the opportunity malinvestments create for investors. Thanks for Dr. Petrov for telling me this and turning me onto Mark Faber at the Mises University in June, 2004.
Faber is very good, I recommend everyone read his book “Tomorrows Gold”
He has made money for himself and clients using his economics which are melded from different schools Austrian being central to his thinking, he is an economic historian on the financial markets side like no other.
I have been reading Faber for a while (his Gloom, Boom, and Doom Reports often contain some of the best and most concise economic histories I’ve yet read), and you are right about Mr. Faber’s awareness of the Austrian School.
One of the above posts mentions an interview that I think is the one he did for the Financial Sense radio show on February 22, 2003. If any one is interested, the broadcast is still available online, and is worth listening to. It is linked from the following site:
http://www.financialsense.com/Experts/2003/Faber.htm
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