Marc Faber`s Investment and Trading Ideas - A Tracking Blog About Dr. Marc Faber , Daily Tracking of Dr. Marc Faber Investment Strategy , Market analysis & Outlook and Media appearances
really funny : Dr. Marc Faber concluded his monthly bulletin (June 2008) with the following:
' 'The federal government is sending each of us a $600 rebate. If we spend that money at Wal-Mart, the money goes to China. If we spend it on gasoline it goes to the Arabs. If we buy a computer it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala. If we purchase a good car it will go to Germany. If we purchase useless crap it will go to Taiwan and none of it will help the American economy. The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I've been doing my part.' Marc Faber
Marc Faber a commodities super boom is inevitable , with high risks of Hyperinflation as Mister Bernanke is running the printing press at full speed , What's going on in the stock market is temporary Marc Faber expects demand for stocks, commodities and gold to rise as the increase in global money supply spurs inflation Marc Faber is The author and publisher of the Gloom, Boom and Doom report he is also is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
May 13, 2009 Agricultural commodities offer investment opportunity, says Marc Faber
Going against the grain may be costly. Investing in agriculture today will be like investing in oil in 2001 to 2002 when oil prices halved to US$17 per barrel says Marc Faber editor of The Gloom, Boom & Doom Report. Agricultural commodities fell by half from June 2008 highs, but fundamentals remain strong says Faber.
Faber points to a weak build in agricultural stocks (supplies) during the bumper harvest year of 2008. Low stocks, declining productivity, and increased demand persist from a long term perspective, says Faber, and will drive prices higher. Population growth is rising until 2030 and will have produced an additional billion mouths to feed between 2000 and 2012 alone.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
This is an interview by Marc Faber all in German , following is a translation made by our friend Pascal Maucher :
This is an Interview with Marc Faber and Prof. Max Otte, who is pretty much "godlike" in Germany since he predicted the last crash correctly in his 2005 arrived book "Der Crash kommt" which can likely be translated to "The crash WILL come".
Faber: Central Banks are like a bar tender, who gives his guests alcohol for free. They encourage the people to speculate by giving out easy money.
Otte: The System as it is right now boosts bubbles all the time. It’ll be a huge act of power and courage to change it.
Faber: Central banks never handle the problem correctly, they just paint new color over cracks in the walls.
Interviewee: What should they’ve done?
Faber: Basically, they should have noticed, that bubbles arise because of their expansive monetary policy, which enlarges the debts of a state. When the point has come, where there’s no more debt-growth, economy will collapse.
Otte: If you want to break up this cycle, you definitely come into a long recession. We’ve got much cheap money and the people are buying everything e.g. cars they can’t afford on credit. To change this behavior, something’s got to happen, which usually is a recession.
Faber: The alternative is, to print money so you have to bear the pain over 5 up to 10 years instead of one or two years within a recession. But even a non-economist must understand: You’re not getting rich by money-printing, otherwise Robert Mugabe would be the richest person and Zimbabwe would be the richest nation in the world. You can’t solve problems by money-printing, you’re only able to move them into the future. Right now, you’re still able to solve problems by borrowing much more money than you did the last time, but that’s not going to work forever.
Interviewee: But why is this always done? These people aren’t dumb, are they?
Faber: Well, that’s what I’m asking myself whether central banks are actually intelligent. I assume they are dumb, because they represent a theory which is unsustainable.
Otte: You can’t burst the circuit of more money, low interest rates, crash, even more money, even lower interest rates, even more crashes, because the politicians can’t retrieve the volume of money in circulation. A German law by the year ’68 told the state to spend money in bad times, but to save some other money in good times. Of course they didn’t, so the central banks don’t do that either.
Faber: All those bailout-packages and the ongoing expansive monetary policy, will in my opinion provide us large inflation rates after a short period of deflation.
Interviewee: How high?
Faber: Well, Zimbabwe’s got millions of percents per day, such as it had been in the further republic of Weimar, but I don’t think we will reach that. But 10 to 20 percent should be possible.
Otte: At the moment there is much money getting pumped in the economy, at least 5 trillion all over the world. As soon as the banks no longer hold this money in their pockets, this will generate new demand and let prices go up. I think 5, 10, even 15 percent a year is definitely possible.
Faber: Usually, the rich people benefit from inflation and the governments can hide very much by inflation.
Interviewee: Because then they can pay back their debts..
Faber: Yes, governments and companies can pay back debts with money, which has lost a lot of its value. But inflation is an awkward kind of taxation and it creates social grievance. After some time, high inflation rates lead to political issues, in the end there are usually revolutions and social changes.
Otte: The next bubble is right now in the market of government bonds. These are monetary claims, which lose their value due to high inflation rates.
Faber: The American economy will provide huge deficits in the next years. Last year there was at least one billion; this year will be, I think, at least 2 billion. How shall that ever be paid back? The only way to do so is inflation. When inflation goes up, fixed-interest papers of, let’s say 30 years, are certificates of confiscation, they are worthless.
Otte: Government-bonds are the biggest asset class of the world. Even every community emits some papers. Even small declines in prices will cause damage.
Faber: Central banks are a catastrophe. They are the worst thing that happened in the 20th and 21st century. They will lead the whole system to the collapse. Communism collapsed and the collapse will be the capitalism, because of irresponsible central banks and governments with huge deficits.
Otte: When you’re looking into the future, it’s possible that a state which has such huge debts, such as the US, has to announce bankruptcy. They didn’t have to in their whole history, but once it’s always the first time.
Interviewee: What will happen then?
Otte: I don’t want to imagine that, but foreign creditors would be stuck with their government-bonds. The confidence would be destroyed and had to be reconstructed by a currency reform and stronger market rules. This would be very hard for the world economy.
Faber: Well, I guarantee, that the US will be bankrupt. Not tomorrow, but in ten to fifteen years I see a 100-percent bankruptcy of the United States.
Marc Faber was recently interviewed by Howestreet.com in Vancouver Canada ,Asian stocks have bottomed out , The Copper have bottomed out ... The government is massaging economic statistics , flooding the system with liquidity and creating large deficit The worse the economy is the more money they print , Obama is a disaster , USA is unlucky first Bush and now Obama , Bush plus Obama equals zero says Marc Faber
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Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Even Dr Doom Marc Faber, in his latest monthly newsletter to clients, concedes that perhaps, just perhaps, the S&P500 has bottomed out and things may improve from here. Not only that — after boosting gold consistently for months, he warns that precious metal prices may correct further on the downside in coming months.
Commodities and the Kondratiev Wave ``I agree that commodity prices move in long cycles,'' said Faber, who manages $300 million at Marc Faber Ltd. ``The up wave of the Kondratiev cycle is likely to last for at least another 15 to 20 years.''
Faber devoted a 35-page chapter of his 2001 book ``Tomorrow's Gold'' to Kondratiev and other long-wave theorists, writing that once the cycle turned higher, ``it will change the entire rules of investing, because in a rising wave, commodity prices will rise, inflation will accelerate and interest rates will increase.''
The Reuters/Jefferies CRB index of 19 commodities has surged 139 percent since October 2001; copper has jumped five-fold, while oil prices have more than tripled. The U.S. Federal Reserve has raised its benchmark interest rate to 5.25 percent, from a low of 1 percent in 2003.
Faber owns mining stocks, which he declined to name, as well as gold, rare metals and agricultural land. He's underweight bonds, which he said don't perform well in a rising Kondratiev wave.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Copper is generally a leading indicator of economic growth because of its use in new construction (housing and commercial property).
Dr. Faber might be in agreement with Dr. Copper (as copper is sometimes called for its ability to 'diagnose' the economic conditions). Dr. Marc Faber's latest letter landed in the mailbox yesterday. There were some real gems in this month's Gloom, Boom, and Doom Report. One was this quote from Charles Kettering, "Success is getting what you want, happiness is wanting what you get."
Dr. Faber also has quite a bit to say about whether the large rallies in global stock markets since March (and earlier in some cases) constitute a recovery in the economy or just a "bear market rally." He says that, "At least in nominal terms, the global printing presses being run by the world's central banks and fiscal deficits have begun to impact asset prices positively."
This is a concession that the big quantitative easing efforts of the Fed have found their way into bond prices and certain other sectors. Also, by trashing cash the Fed has made stocks look relatively more attractive. Dr. Faber also thinks that, "In the case of resource and mining stocks, as well as Asian equities (and, for that matter, most emerging and other stock markets around the globe), the lows that were reached between October and March of this year are likely to hold-that is, for now."
And what about Australia specifically? He did not single the country out. But he did say that, "The markets that have the highest probability of having made major longer-term lows are resource-related equities, emerging markets, and Japan."
"Conversely," he writes, "the asset market that has the highest probability of having a made a secular high (such as Japan in 1989, or the NASDAQ in March 2000) is the U.S. long-term government bond market. Despite a still-weakening economy and massive quantitative easing, long-term bond yields appear to be on the verge of breaking out on the upside."
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil. Source News
April 27 -- Marc Faber, publisher of the Gloom, Boom and Doom report, was interviewed By Bloomberg's Deirdre Bolton and Betty Liu about GM Corp.'s offer to exchange $27 billion of bondholder claims to equity in an effort to help the biggest U.S. automaker avert bankruptcy. Marc Faber also said that The Federal Reserve will continue printing money , any chance is good for the FEDto print new money (Source: Bloomberg)
We live now in an environment of very, very high volatility, because on the one hand you have the private sector that has tightened lending conditions, and wealth has been destroyed. Households will save more and be more prudent financially than they've been. In other words, credit or liquidity is tightening.
Then on the other hand you have these clowns in government that think that they can solve any problem. As Mr. Geithner said recently, "we know how to fix the problems." Well if he knew so well how to fix the problems, why did he let the problems happen in the first place? He was the New York Fed Chairman when the conditions were created!
"I earned my name as ‘Dr Doom’ for predicting that stock market crash a week before it happened. It was lucky that it happened so soon after I made the prediction rather than six months later."
Marc Faber cemented his reputation further by turning bearish on the Japanese market in the late 1980s and also predicted the Asian crisis in the late 1990s. Over the course of the 1990s the subscribers to his Gloom Boom & Doom newsletter grew steadily.
Dr Marc Faber was born in Zurich, Switzerland. He went to school in Geneva and Zurich and finished high school with the Matura. He studied Economics at the University of Zurich and, at the age of 24, obtained a PhD in Economics magna cum laude. Between 1970 and 1978, Dr Faber worked for White Weld & Company Limited in New York, Zurich and Hong Kong. Since 1973, he has lived in Hong Kong. From 1978 to February 1990, he was the Managing Director of Drexel Burnham Lambert (HK) Ltd. In June 1990, he set up his own business, which acts as an investment advisor and fund manager.
The Fundamentals Have Never Been Better For Gold
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"The fundamentals have never been better for gold. The fact that there’s
so much negativity...
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