CNBC interviewed Marc Faber recently, and he pointed to happenings with McDonald’s.
On Tuesday, McDonald’s reported that global same-store sales in August fell 3.7 percent in August, well short of expectations. The worst drop occurred in the Asia-Pacific region on the back of a Chinese meat safety scandal, but even U.S. sales slid 2.8 percent.
For Faber, those results are a perfect example of the damage being done by central banks—and the harbinger of more bad news to come.
“Nobody knows for sure” what will cause stocks to collapse, but “the earnings may disappoint. We had, essentially, very poor sales from McDonald’s. Now, McDonald’s is a very good indicator of the global economy. If McDonald’s doesn’t increase its sales, it tells you that the monetary policies have largely failed in the sense that prices are going up more than disposable income, and so people have less purchasing power.”
As I have observed before, it is amazing that unions are treating McDonald’s as if it were a financial powerhouse that could easily double the wages of all workers. So rather than be grateful for jobs, people are protesting that McDonald’s should be paying them more for unskilled labor.
If Faber is right, many of those jobs will soon disappear.
“Credit expansion and money printing hasn’t filtered much to ordinary people. It’s boosted asset markets, real estate and stocks,” he said Thursday on CNBC’s “Futures Now.”
“So well-to-do-people have done very well. High-end restaurants are packed. Now, some money flows to people who are serving there, because well-to-do people give generous tips, but ordinary people have a much higher cost of living increase than 2 percent.”
But even as most have seen their cost of living increase, according to Faber, median family income has hardly budged. That puts less-wealthy families—and the companies like McDonald’s that are reliant upon them—in a tough bind.
The most likely scenario is another crash like we had in 2008. We have been basically moving in a circle since the great recession.