This is a Liquidity driven Rally Marc Faber

Dr. Marc Faber on King World News 22 Aug 2009

This is a Liquidity driven Rally Marc Faber
Dr. Marc Faber is often quoted in both national and international media. He has appeared at one time or another in virtually all financial media such as Bloomberg, CNBC, etc. and is a regular contributor to several leading publications around the world, Forbes and "International Wealth" a sister publication of the "Financial Times" amongst them. Others include Die Welt, Finanzen, Boerse, Swiss Radio, Apple Hong Kong and Taiwan, Quamnet, Winners, Wealth and Oriental Daily. These, he writes on a regular basis. He also writes occasionally for the Herald Tribune, Wall Street Journal. He is the Editor and Publisher of The Gloom, Boom and Doom Report and his website can be found at GloomBoomDoom.com. In this interview Marc talks about dubious financial practices, deflation, inflation, hyperinflation, effects of hyperinflation, the U.S. stock market, excessive financial speculation, stimulus packages, the U.S. Dollar, The Fed, Bernanke and much more.

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Marc Faber China economy will eventually implode

Marc Faber My guess is that Chinese economy is growing between 0% and 3.5% despite the stimulus

The big question is when is the Chinese economy also implode " may be it will happen in 2010 , in China there is an investment bubble ...the total collapse is ahead of us and probably a world scale war...

U.S. Inflation Expectations Increase

Investors who bet on inflation usually can buy gold or they can put money into chips but JP Morgan says gold is the better bet. (The Bloomberg Edge) , Marc Faber have been warning about inflation / hyperinflation in the US market to hit any time soon if nothing is done to fix the fundamentals of the US economy....

The central bankers are nothing else than money printers Marc Faber

The US is the least cyclical economy agrees Marc Faber with Nouriel Roubini

"Basically what we have this bull market in assets between 2002 and the end of 2007 early 2008 and a weak dollar during that time , 2008 was the opposite , a strong dollar and all assets markets went down except for bonds and now in 2009 we bottomed out on the S&P at 666 in march and since then have rallied strongly and in emerging markets even more but the dollar was weak , and I expect now may be for the next couple of months a period of recovering dollar and a correction time in asset markets " says Marc Faber "The Us is the least cyclical economy as Professor Roubini pointed out emerging economies are essentially more cyclical than the US economy , they're like a warrant on US economy , and I think in a scenario where growth will be disappointing , I think emerging markets are kind of vulnerable they also become the favorite investment destination by momentum players , and I think we had huge increase in stock prices a lot of markets have doubled in price between march and just now a couple of days ago and so a correction is possible , but having said that I would also argue that the worse the global economy is the more stocks could go up because we have all these central bankers who are nothing else than money printers " "they created first the NASDAQ bubble and then the housing bubble and now they want to create another bubble to bail them out and that's of course not a recipe for a healthy sustainable growth"
"Usually an economic and financial crisis leads to some fundamental changes. That is the purpose of a recession, of a depression, to clean the system," said Faber
"Let the derivatives players go bankrupt and the system is clean," "The total breakdown of the system is ahead of us and it will devastate the global economy."

"My view is that the Fed and the other central bankers will leave interest rates far too low and far too long," Marc Faber added.

Inflation vs Deflation The Debate Continues on the Gloom Boom and Doom Report

Marc Faber has just released his Gloom Boom & Doom Report in which he goes more in depth into the inflation vs deflation debate

"If deflationists are right (and they could be right in the near term, in my opinion), then the US government bonds and the dollar will rally, while stocks, commodities, real estate, and lower-quality corporate bonds will tank. But if I am very confident about making one prediction, it is that, if we have further deflation in the immediate future, there will be not one more, but many more stimulus packages and further massive monetisation. So, government debt-to-GDP could easily double within five years. Now, does anyone seriously think that the dollar and government bond prices wouldn’t at some point begin to reflect concerns about the financial condition of the US under these conditions? " Marc Faber said in his report

click to read more of Marc Faber's Gloom Boom & Doom Report of August 2009

Own Commodities not derivatives at Citigroup Marc Faber

Commodities will continue to be hot

in both a recession or a recovery scenarios commodities are the best place to be , many of the traders are trying to jump on the wagon of a believed soon recovery by speculating heavenly on commodities and energy sector , many investors think the economy has bottomed and are buying equities and commodities in order not to miss the boom this time They're trying to anticipate the exit out of the recession to beat the crowds and set up their long positions , China while trying to get rid of some of its US$2-trillion of currency reserves is buying huge amounts of commodities around the globe as a results the price of some commodities have almost doubled , in particular Copper which had 76 percent rally this year but may soon end on signs that China has stockpiled more than it can use in new homes, cars and appliances for the next decade .
In a presentation at the Prospectors and Developers Conference in Toronto back in March, Dr Doom Marc Faber summed up very elegantly by saying : "You want to own commodities in the ground, not derivatives at Citigroup."

The Next Bubble Can Be In Equities Marc Faber

"There is a bubble that the FED and the government are creating right now and this is a bubble in government debt, in the size of it. They are being very successful at that.

Eventually the US Government will go bankrupt the way California is almost bankrupt, but that will take some time. The next bubble in my opinion can be a bubble again in equities." Marc Faber told Bloomberg TV early this week
Marc Faber was also a speaker at The Agora Financial Investment Symposium in Vancouver and had an hour long interview with CNBC Asia here are some of the quotes from Marc Faber :
The world has not seen the end of the financial crisis and the recent surge in markets was a result of excess liquidity coming from central banks, Marc Faber told CNBC in an interview.

"If you pump money into the system and you create large fiscal deficits, you create volatility," Faber, author of the Gloom, Boom and Doom Report, told CNBC in remarks reported on its website.

"We've seen an intermediate low in March, we'll rally for a year or so or maybe 18 months -- the ultimate crisis will happen much later, and the ultimate crisis would clean the system," he added.

Faber, who did not forecast a precise time for that crisis, told CNBC that firing half the government workers in the world would be one way of dealing with the crisis.

"If you shift government activity to the private sector the economy becomes more dynamic," Faber said. (Reporting by Ajay Kamalakaran in Bangalore)

We haven't seen the last of the crisis despite all talk about green shoots, and the surge in markets was caused by nothing more than the excess liquidity coming from central banks, Marc Faber, author of the Gloom, Boom and Doom Report, told CNBC Friday.

"If you pump money into the system and you create large fiscal deficits, you create volatility," Faber said.
"We've seen an intermediate low in March, we'll rally for a year or so or maybe 18 months… the ultimate crisis will happen much later, and the ultimate crisis would clean the system," he added.

Asked when this would be, he said he could not forecast a precise timing: "it may be 5 years time, 10 years time, but that's not the last crisis."

There are two opposing views, those who believe deflation is the big danger, with asset prices and demand collapsing, and those who think the biggest risk is inflation and a weak dollar, Faber said.
"In general in a crisis such as we have today where there is a deficiency of demand and huge overcapacity under normal conditions you would have deflation… now comes in the government and creates these huge deficits," he added as an explanation for his belonging to the "inflationists" camp.

"Already you have money-printers Mr. Bernanke and Mervyn King… we have never had this experiment in the history of mankind, all governments throwing money at the system," Faber said.

One way of dealing with the crisis would be to fire half the government workers in the world, "because if you shift government activity to the private sector the economy becomes more dynamic," he said.

"It's a transition time that is maybe painful. Why does California have these problems? It's not that there are too many teachers in California but the education department is very bloated," Faber added.

This Crisis has brought more entangling between Wall Street The Treasury and the Federal Reserve Marc Faber

The final crisis may only happen in five years time : Marc Faber

Your portfolio has come up a bit would you be confident the crisis is actually over as some governments pretend that we have seen the end of the tunnel : Marc Faber the editor and publisher of the Gloom, Boom and Doom Report from Vancouver where he was a key speaker at the Agora Financial Investment Symposium this 21 July says " I think the various coordinated fiscal and monetary measures around the world they stabilized the economy , and after having collapsed between September of last year and march of this year we can have a rebound in economic activity , but I mean if you look at Caterpilla actually revenues are contracting and earnings were better because they fired a lot of staff they laid off 35 000 people but if you think about it the laid off people are actually the customers of somebody else , so I think that the economy is going to rebound somewhat and probably will have another dip and the final crisis may only happen in five years time because do not forget this crisis and the crisis essentially should solve the problems and clean the system , this crisis so far has actually aggravated the system and has brought about more entangling between Wall Street The Treasury and the Federal Reserve , and a lot of misguided practices that are detrimental to the health of the economy " You should own foreign shares partly resources stocks and partly shares in Asia and I would own some physical Gold silver and platinum said Marc Faber

Marc Faber Inflation vs Deflation and A Worldwide Bubble in Everything

Marc Faber at the Agora Symposium on HoweStreet in Vancouver BC Canada this July .Dr Doom says "the media under the influence of some Harvard professor and the Federal Reserve they paint deflation as bad and inflation as good and so forth ...when in fact the US begun the whole 19 century with 4 million people they ended the 1900 with 80 million population and we had the entire and we had the entire industrialization growth in real terms between 1800 and 1900 much higher than it was been in the last one hundred years , the wages were flat and the prices went down it is the reverse of what we have today , where an average American wage is having trouble keeping up with the everyday increasing prices not the Goldman Sachs wages of course ... what brought is in this trouble was the bubble itself...the purpose of every crisis is to clean the system The final crisis is still to come where the whole system will collapse and the whole system will be cleaned of corrupt politicians and wrong policy makers....

Marc Faber Money printing, debt growth and deficits don't create prosperity

Speaking to the 10th Annual Agora Financial Investment Symposium in Vancouver this week, Marc Faber said: “You cannot create prosperity through money printing and debt growth.”

Faber preached an idea that became the theme of the event: Government fiscal and monetary intervention, “can postpone, but not prevent crisis.

“I believe next year’s economy will face even larger deficits. Their deficit is attempting to stimulate credit growth. Unless real credit growth returns, they will have to put more and more money into the system to maintain the status quo. All polices target consumption. That is a mistake,” Faber said.

So what’s this mean for the market? “The S&P 500 will not recover to 2007 highs. At the peak, 44% of the S&P was the financial sector. That is gone… not coming back.”

“In the period, 2001–2007, the Fed managed to do something that had never before been done – create a worldwide bubble in just about everything. Stocks, bonds, art, oil, housing – you name it; it went up. The only thing that didn’t go up was the dollar,” Faber said.

Read the full article :

Marc Faber One way of dealing with the crisis would be to fire half the government workers in the world

The world has not seen the end of the financial crisis and the recent surge in markets was a result of excess liquidity coming from central banks, Marc Faber told CNBC in an interview.

"If you pump money into the system and you create large fiscal deficits, you create volatility," Faber, author of the Gloom, Boom and Doom Report, told CNBC in remarks reported on its website.

"We've seen an intermediate low in March, we'll rally for a year or so or maybe 18 months -- the ultimate crisis will happen much later, and the ultimate crisis would clean the system," he added.

Faber, who did not forecast a precise time for that crisis, told CNBC that firing half the government workers in the world would be one way of dealing with the crisis.

"If you shift government activity to the private sector the economy becomes more dynamic," Faber said. (Reporting by Ajay Kamalakaran in Bangalore)

We haven't seen the last of the crisis despite all talk about green shoots, and the surge in markets was caused by nothing more than the excess liquidity coming from central banks, Marc Faber, author of the Gloom, Boom and Doom Report, told CNBC Friday.

"If you pump money into the system and you create large fiscal deficits, you create volatility," Faber said.
"We've seen an intermediate low in March, we'll rally for a year or so or maybe 18 months… the ultimate crisis will happen much later, and the ultimate crisis would clean the system," he added.

Asked when this would be, he said he could not forecast a precise timing: "it may be 5 years time, 10 years time, but that's not the last crisis."

There are two opposing views, those who believe deflation is the big danger, with asset prices and demand collapsing, and those who think the biggest risk is inflation and a weak dollar, Faber said.
"In general in a crisis such as we have today where there is a deficiency of demand and huge overcapacity under normal conditions you would have deflation… now comes in the government and creates these huge deficits," he added as an explanation for his belonging to the "inflationists" camp.

"Already you have money-printers Mr. Bernanke and Mervyn King… we have never had this experiment in the history of mankind, all governments throwing money at the system," Faber said.

One way of dealing with the crisis would be to fire half the government workers in the world, "because if you shift government activity to the private sector the economy becomes more dynamic," he said.

"It's a transition time that is maybe painful. Why does California have these problems? It's not that there are too many teachers in California but the education department is very bloated," Faber added.