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
May 28, 2010 — Presented by Marc Faber at "Austrian Economics and the Financial Markets," the Mises Circle in Manhattan on 22 May 2010 in New York, New York. Includes an introduction by Mises Institute president Douglas E. French.
Dr.Marc Faber told investors to buy stocks on March 9, 2009 when S&P reached its low since 1996, and predicted a 20% decline if the index broke a new high. Now with the S&P down about 13% from that high, Faber talked to Bloomberg on May 24 about his latest call on the markets, economy and what he thinks are the best place to invest now. S&P – Support at 1,045, Resistance at 1,200 Faber now thinks the stocks are oversold in the near term on extreme negative sentiment … visit site to read more >>>
May 27, 2010 — Rolling Stone's Matt Taibbi on the financial reform bill passing in the House despite efforts by the banking lobbyists. Rolling Stone's Matt Taibbi on the administrations slow response to the BP oil spill.
Marc Faber : I think first of all the market became very over boat in mid-April and the correction was long overdue. The technical position of markets had deteriorated. So I think the sovereign crisis in Greece was kind of a catalyst to knock markets down. And it was a reminder that a number of western states, nations including the U.S. eventually will have liabilities that are excessive compared to their economies and so either taxes will have to go up or expenditures will have to go down, or a combination thereof, which then will not be particularly favorable for economic growth.
and when asked if Marc Faber would rather keep his money in the US view the global situation worldwide from Europe to Thailand etc , Marc Faber answered : " Well, I think that near-term, obviously, what has happened is like in 2008, asset markets went down and the U.S. dollar went up. And essentially since November 25 of last year, the dollar has been strong vis- a-vis the Euro. In other words, the Euro has begun to weaken and as the dollar then strengthen, asset markets came down again because a strong dollar is an indication that global liquidity's tightening. And so we have a similar pattern like in 2008. But I wouldn't call the U.S. dollar and U.S. government bonds to be safe. I just think they are right now for the next three months may be the better option than say sovereign bonds in Europe. "
May 25 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, talks with Bloomberg Television about the outlook for U.S. stocks. (This report is an excerpt of the full interview. Source: Bloomberg)
May 25 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, talks with Bloomberg Television about the outlook for U.S. stocks. (This report is an excerpt of the full interview. Source: Bloomberg)
Marc Faber, publisher of the Gloom, Boom & Doom reports, talks with Bloomberg's Tom Keene and Ken Prewitt about the outlook for U.S. stocks.
Faber says global stocks are in a "correction period" and believes the Standard & Poor's 500 Index could decline another 10-15 percent. He also discusses the violence in Thailand.
Marc Faber who lives 700 kilometers from Bangkok : ...basically the country is very peaceful the population is not aggressive they're very tolerant they are a very permissive society , and I think for most Thais including myself to see burning buildings in BANGKOK was really a shock , that's nobody could have anticipated , if a year ago someone would told me that buildings will be burning in BANGKOK I never have believed it , so I think they're some reasons why it happened it is a complex story basically a populist leader that had the support of the ruler who is Mister Thaksin came to power and was then ousted by a military coup in 2006 and then a new government was installed which was more the bankers aristocracy and Thaksin then was condemned for corruption and had also to pay a fine and is in exile and he was again .., he managed again to rally the tour behind him to start the demonstrations , where it has to be said it is not proven that he paid the demonstrators but it is very likely that he paid the demonstrators who have been paid about twice what they would be earning in their salaries if they were working in factories and so on and so forth...and then the trouble went out of hand whether that was again directed by mister Thaksin or he lost control of the movement , that what happened and the violence erupted ... basically calm has returned because you have to say one thing as in most people in Thailand do realize that Thaksin's aim and red shirts aim is actually not to boost the standards of living of the poor but just to use them as kind of human shield and an excuse and to buy their vote it is not about their group of leaders taking money and then redistributing money to the poor it is about their group of leaders getting hold of the money pot that's now is in the hands of the bank of elite and then carrying out the regime amidst the same or even worse corruption ...etc...
Marc Faber who lives 700 kilometers from Bangkok : ...basically the country is very peaceful the population is not aggressive they're very tolerant they are a very permissive society , and I think for most Thais including myself to see burning buildings in BANGKOK was really a shock , that's nobody could have anticipated , if a year ago someone would told me that buildings will be burning in BANGKOK I never have believed it , so I think they're some reasons why it happened it is a complex story basically a populist leader that had the support of the ruler who is Mister Thaksin came to power and was then ousted by a military coup in 2006 and then a new government was installed which was more the bankers aristocracy and Thaksin then was condemned for corruption and had also to pay a fine and is in exile and he was again .., he managed again to rally the tour behind him to start the demonstrations , where it has to be said it is not proven that he paid the demonstrators but it is very likely that he paid the demonstrators who have been paid about twice what they would be earning in their salaries if they were working in factories and so on and so forth...and then the trouble went out of hand whether that was again directed by mister Thaksin or he lost control of the movement , that what happened and the violence erupted ... basically calm has returned because you have to say one thing as in most people in Thailand do realize that Thaksin's aim and red shirts aim is actually not to boost the standards of living of the poor but just to use them as kind of human shield and an excuse and to buy their vote it is not about their group of leaders taking money and then redistributing money to the poor it is about their group of leaders getting hold of the money pot that's now is in the hands of the bank of elite and then carrying out the regime amidst the same or even worse corruption ...etc... “The market became very overbought in mid-April,” Faber said in a Bloomberg Radio interview today with Tom Keene. “The S&P could still decline by another 10 percent, maybe 15 percent.”
Doctor Marc Faber the publisher of the Gloom, Boom & Doom report is convinced that eventually the United States of America and with it all western economies will go bankrupt and that ultimately they might go to war , but before they will go bust they will continue to print paper money as fast as they can , so Faber advices to seek refuge in Gold and to buy even small quantities each month , the fiat currencies are doomed to collapse sooner or later... Marc Faber “I am convinced that the U.S. government will go bankrupt, but not tomorrow, and before they go bankrupt they’ll print money, and then you get very high inflation rate, then you get depression with high inflation and eventually they’ll go to war.” “The obligations of Western governments are far too high. They won’t be able to pay.” "I’m not saying that the dollar will go straight away down because other currencies like the euro are even worse at the present time. But eventually if you print money, the purchasing power will lose value."
Marc Faber said. The opening of the World Expo in Shanghai last week is “not a particularly good omen”, giving the example of the property bust and depression that followed the 1873 World Exhibition in Vienna.
“The market is telling you that something is not quite right,” Faber, the publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview in Hong Kong on Monday.
“The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.”
"Many people haven't woken up to the severity of the US fiscal crisis, The only difference for the US from Greece is that it can print more money." "It's not that Greece alone produced the market sell-off,It was a trigger but the market was probably overbought and we were ahead of economic fundamentals." said Marc Faber, author of the Gloom, Doom and Boom Report to CNBC
SINGAPORE: Investor Marc Faber said China’s economy will slow and possibly “crash” within a year as declines in stock and commodity prices signal the nation’s property bubble is set to burst.
The Shanghai Composite Index has failed to regain its 2009 high while industrial commodities and shares of Australian resource exporters are acting “heavy”, Faber said. The opening of the World Expo in Shanghai last week is “not a particularly good omen”, he said, citing a property bust and depression that followed the 1873 World Exhibition in Vienna. “The market is telling you that something is not quite right,” Faber, the publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview in Hong Kong on Monday.“The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.”Read more>>>
Marc Faber, publisher of the Gloom, Boom & Doom Report, says China is overdoing it: "It does not make sense for China to build more empty buildings and add to capacities in industries where you already have overcapacity. I think the Chinese economy will decelerate very substantially in 2010 and could even crash."
May 13 (Bloomberg) -- Nassim Taleb, a professor at New York University and author of "The Black Swan: The Impact of the Highly Improbable," talks with Bloomberg's Erik Schatzker about the selloff in the stock market on May 6, the drivers of the financial crisis and the "fragility" in the banking industry. (This is an excerpt of the full interview. Source: Bloomberg)
Marc Faber The bankers get The Money Free of Charge - ABC Australia 2009
Marc Faber : we have to distinguish between the stock market and the real economy , you know the real economy begun the recession in late 2007 and then between September 2008 and march 2009 we fell off the cliff and then we were at the very low level of the economic activity then the huge stimulus package kicked in , the money printing kicked in , in other words zero interest rates quantitative easing by the Federal Reserve and also other central banks and that then stabilized the global economy and when you have car sales dropping 50% and more then you get of course have a rebound but the question is how sustainable the rebound will be or is this rebound actually borrowed from the future , and in my sense is and here I am talking about the economy , that the economy near term can recover may be the recovery can be somewhat lengthier than expected the crackup boom because the first stimulus package in the US probably will be followed by a second one and money printing will lead to even more money printing next years so it can last twelve to eighteen months , and then we gonna get another set of problems rising from ..each government action has unintended consequences ..... "You need to be really dumb dumb dumb not to make money when the government gives you money free of charge" "for the bankers they get money free of charge , I wish every person in Australia who has an honest business will get money free of charge then they also make a lot of money , the bankers get money free of charge so that they can do things and make money..." " and the worse the economic conditions will become the worse the property market will become the more money in the US will throw at the system and the more bailouts will follow ...actually you should buy banks stocks in the world in (the short term) in let's say twelve months or so.....I think one stimulus package will lead to the next one and to more money printing , I think in five to ten years time the real crisis will break out when the whole system collapses....That will be the end...says Marc Faber author publisher and editor of the Gloom Boom and Doom Report..... Marc Faber reckons that Australian "property market is inflated" and that in 5 to 10 years an utter economic collapse will occur in the USA .
Marc Faber Interview with The Financial Times 23.2.10
Marc Faber : before they default they will monetize , you will get higher inflation rate not tomorrow but say in ten years time and then eventually you have interest payment problem on the government debt which will balloon in the years to come , i think interest rates re likely to go up and as the government debt expands especially given the unfunded liabilities arising from Medicare Medicaid and Social Security , so i think they'll have a problem sooner or later ...so usually the governments what they have done in these situations is to monetize and trying to get rid of the debt with inflation ...I think all paper currencies will continue to lose their purchassing power as they have in the past hundred years or so ...I think the bailout of Greece is not favorable to the value of the Euro ...the ECB will talk tough and act softly... Marc Faber artificially low interest rate created the Credit bubble of the last few years and the credit bubble then led to the housing bubble in the United States and we know what the result is ...and that was a consequence of artificially low interest rates ...clearly when you have artificially low interest rates you have mis-allocation of capital
Marc Faber : Basically it is just another bailout package but the question is : who did they really bailed out , did they bail out Greece or they bailed out themselves ! because they have already a package in place where presumably they bought a lot of these toxic bonds already from Spain and Portugal and Greece on which they sitting on huge losses , so i think the whole thing is basically a farce , it is like a completely drunk sailor supporting the other completely drunk sailor on the way home...they are gonna fall off the cliff or fall off into the harbor , and that what will happen worldwide , In western democracies the problems are never addressed they are postponed through money printing basically and bailouts and what you do is you kind of limit the growth of the private sector that is the dynamic part of the economy you shifted over to the government and the government has more and more influence on economic activity and personal lives ...The Endgame has begun and this is basically to print money and you will print more and more money and eventually it will be reflected in the loss of purchasing power of paper money , as you know most Americans the medium household has not had any real wage or income increase for the ten twenty years and it is also reflected in the price of precious metals ... The Advantage of the United states is ...California is probably broke so they will need a bailout then Illinois for sure is broke and they will need a bailout but the US can simply print money , so it is not a huge immediate problem , it will be a longer term problem and the longer the fiscal deficit are not addressed the more the unfunded liabilities will go up , and whoever thinks that Obamacare will save money is dreaming , is believing in fairy tails , About the timetable for the US Marc Faber answers : well I think five to ten years Maxim and during that period of time you will have huge volatility as we had last week with markets occasionally shooting up , occasionally you will have very bad corrections and that will be the order of the day ,... when you have interests rates at zero percent you force people to speculate that's the problem it is not a computer program , the computer programs are a consequence of zero interest rates , people will do something with the money.... China will certainly slow down says Marc Faber ...will it crash ? who knows he added but it is quite possible that in some sectors like properties and individual cities we could have a crash... May 10, 2010 — The Gloom, Boom and Doom Report Publisher Marc Faber weigh in on the future of the global and U.S. markets.
Marc Faber : avoid Industrial commodities , Australian and Canadian Dollars and Stocks in case China crashes or slows down meaningfully
Marc Faber : Central Banks just print money - Faber Discusses European Loan Package and Greece Bailout
Marc Faber : basically both the ECB European Central Bank and the US FED Federal Reserve are all money printers says Marc Faber , some are better at it and faster and have more efficient machines the others are slower , but basically central bankers they run rpint and print , and it would be a mistake to think that the bailout is actually a bailout of Greece , Greece is a write-off , you cannot have the kind of debt Greece has with olive oil income they have no industries to speak of , they have shipping , but the shipping industry does not pay taxes in Greece , so basically the baliout is actually a bailout of the ECB itself because they have already a lot of paper of Spain Portugal and Greece in the their portfolios and therefore and the bailouts of the banks in Europe ...and they lend money to Spain and to Portugal and so on they also in the same boat , so like us if we have a problem we just drink more instead of addressing the problem
May 10 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, talks with Bloomberg's Pimm Fox about European policy makers' announcement of an almost $1 trillion loan package to end the region's sovereign-debt crisis. (This is an excerpt of the full interview. Source: Bloomberg)
Marc Faber : If you believe that money printing helps an economy go to Zimbabwe , there they print money like crazy and the economy has totally imploded ..., that's what money printing does " "I believe all central bankers should resign because they have created 99% of the crisis by printing repeatedly money and these people they want now to bailout the system ?..no thank you " "we have a market economy . let the market solve the problems , everything that the government does and interventions in the free market has unintended consequences" "It is very good , it is perfect that everything goes bust that concerns the financial sector then people will go back and produce something productive and not trade against each other derivatives"
Marc Faber on BNN Canada 07 May 2010 : Dr. Doom on the Economy
Marc Faber : basically what is happening is the following we have 70% of the trading volume that is algorithmic trading which is computer program driven , now most computer programs are structured according to momentum , in other words they are trends following models and they work like an auto pilot in a plane , so if there is pressure from the upside the auto pilot will push up the plane , if there is pressure from the right hand side the auto pilot will pressure it to the right and so forth ...to find an equilibrium point , and the auto pilot in the algorithmic trading they change at some point when you go through resistance or support levels , so then suddenly you go from long positions to net short and that then aggravates market moves , in other words yesterday as the markets opened they were still programmed on the buy side but when the market fell to a certain limit it all turned into sell orders that's why you got this big sell-off in one day ...in the 87 crash , we crashed by 21% in one day and from the peak in august 87 to the low on October 20th 1987 the market had dropped 40% , so very near term as of today on a daily basis we are over sold but we are still only moderately lower than we were at the peak on April 25th 2010 " "The danger is that the Federal Reserve has encouraged a casino and today the financial sector is simply disproportionately large compared to the real economy , in other words if you look at Foreign Exchange Trading FOREX it is may be a hundred or a thousands time larger than the trade volumes , if you look at the Future market activity it is much larger than the physical trading volume and so we have this huge casino in the world from which the financial sector benefits , the profits of the financial sector as close to records highs at the present time but that all has been encouraged essentially by loose monetary policies especially in the United States" "It is going to be a very volatile environement for the next five to ten years until the final crisis will REBOOT , like when your computer crashes then it is finished , then you have to reboot , what will happen The whole financial system in the world will be RESET and the centrasl banks will essentially be WIPED OUT " "The Greek government has defaulted about as many times as Argentina in the last 200 years , and they will continue to defauly except now they have a rich uncle called the EU " "In general the problem worldwide in the western world and I specify here not in emerging economies but in the western world , the US in particular and western european countries are the unfunded liabilities that will come about in the next few years as a result of the aging of the population and as a result essentially of medicare medicaid social security payments and the governments simply do not have the money to pay all this even if they increase taxation it won't be enough and so in my opinion before they all default they'll print money"
Marc Faber : well basically we have a financial crisis in Greece no doubt , the country is basically bankrupt and the EU will most likely have to bail it out and obviously that's favorable for Greece if they get bailed out temporarily but negative for the EU and so the Euro Dollar , The Euro was weak over the last couple of weeks , so that is basically what has happened , it is not that Greece produce the market sell-offs it was a trigger , a catalyst for the sell-off they were a lot of factors training to a correction to start with the market was over bought we were ahead over essentially economic fundamentals in emerging economies and around the world we're up more than a hundred percent from the March 2009 lows and in the US 80% , and very clearly the economic expansion particularly in the western world western Europe and the US , considering the huge fiscal stimulus and zero interest rate ......" "I think most western European governments with few exceptions and the US in the long run cannot pay their unfunded liabilities and therefore we will have more and more sovereign defaults in future but of course we live in the twenty first century and when we live in this century the governments they print money before they default and that will be the case in the EU and it will be the case in the US , so temporarily you can postpone the hour of truth" later on the other Dr Doom Nouriel Roubini asks Marc Faber some interesting questions aboutGreece and China bubble amongst other things Yesterday's historic sell-off sending shivers through an already fearful market, with Laurence Meyer, Macroeconomic Advisers and Marc Faber, The Gloom, Boom & Doom Report.
Faber Says Plunge Caused by Market Rising `Too Quickly'
Marc Faber : "I do not think that Greece is the cause of the selloff , I believe it is a catalyst but the cause of the fail off is that the market run up too much too quickly , in other words most emerging markets were up more than hundred percent from the March 2009 lows and the S&P is up more than eighty percent and as I have argued we would see a 20% to 30% correction this year anyway now it just happened that these 20% correction happened within ten days we made a low today at 1060 on the S&P the low on February fifth this year was 1045 and then we rallied to 1220 and now we dropped and closed at 1128 , so I think that the market was over bought ahead of itself and due for a correction anyway and then the computer programs as the market started to go down they had to change their positions from being long to short and that then triggered the big selloff " Marc Faber :"I think that Asia will go down today , the question is by how much , because the Asian markets were not as overbought as the S&P , The Hang Seng index was before the selloff begin below the November highs and the Shanghai index was below the November highs and below the August 2009 highs so in many asian market we are actually already down on the year and not up like the S&P so may be the decline won't be as brutal , and also I would argue that as of todays low the S&P became about as over sold as it was after the crash in 87 where we had a substantial rebound "..... May 6 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, talks with Bloomberg's Matt Miller and Margaret Brennan about today's selloff in U.S. stocks. U.S. stocks tumbled the most in a year on concern Europes debt crisis will halt the global recovery. (Source: Bloomberg)
Here are two clips of Marc Faber on Asian TV one is Chinese and the second one is is from Singapore , the first clip is new from this month of may and the second clip is from a year earlier Marc Faber : " it is very clear that in the United states the budget deficit in other words the household deficit of the government will next year be at least two trillion dollars in other words over ten percent of GDP , and as far as I can see for the next five , ten twenty years in my opinion we will have government deficit in America and the government will have to print money so eventually it will be inflationary , in hyperinflation the worst is the currency of the country that hyperinflate , say the dollar would be a bad currency choice , well may be for the next six months the dollar can still go up possible , but the best investment in hyperinflation countries is to move out of the country and to invest in other countries and since may be the whole world will have hyperinflation I think that probably gold and silver are quite a good investment" "We can have a rebound in equities may be thirty percent , may be some equities can go up fifty percent , say if a stock drops from a hundred to five they can easily go to twenty before it goes to zero , it is not a problem so a rebound is quite possible but I think after this rebound people will realize that the economy in 2009 is not going to be good , that the economy will continue to deteriorate and so I would basically look at the rebound as a selling opportunity " "Well right now if you have hundred percent cash you are the king because you have not lost any money , unless you sold yesterday then you lost a lot of money , but say assuming you had cash for the last twelve months you have not lost any money , everybody else has lost fifty percent , so relatively speaking you are richer , then I would say to hold cash there is also some risk , the risk of inflation one day the currency risk , there is the risk of the bank not paying you back , so I would take say ten percent now and buy some shares then with ten percent buy some physical gold not derivatives at UBS and Citi Group but physical and store it in a safe deposit box , yes and then you wait six months and then you see if in six months time if shares are lower the may be I would put another ten percent in shares, but I do not believe that .., I believe that markets can rebound here but the rebound probably also means that the US Dollar will be weaker for the next say , next few weeks or next few months but then the economy in 2009 continues to worsen , gets worse and then the markets will once again come down and either go lower below the present level or they will at least test the present levels , I think there is a very good chance they will go lower
(LONDON) He is known as "Dr. Doom" the title of a well-known investors Faber (Marc Faber) publicly warned that the current indications, the mainland economy have been there all the signs of the asset bubble, fear will be 9 to 12 months of growth slow, or even "crash" of risk. Faber interview on Bloomberg yesterday warned: "The market is revealed signs of abnormal current message, the mainland's economic bubble signs have emerged, in any case the pace of economic growth will gradually slow down, even in the next 9 to 12 months will crash risk. "Faber also stressed that:" Last week the official opening of the Shanghai World Expo, but the mainland is not a good sign, review history, hosting the World Expo 1873 in Vienna, and later still the stock market falls and economic recession distress. "by the Chinese Communist government's recent strong play room, and the rate of 3 degrees to increase the survival potential impact of China Shanghai Composite stock index has plummeted this year to 12%, the worst performance of major stock markets in Asia. Faber latest bad-mouthing the mainland economy of speech, also echoed the previous hedge fund manager Charles North (Jim Chanos) and Harvard University professor Rogoff (Kenneth Rogoff) the previous view of economic prospects look bad mainland. Although mainland China raised 3 degrees this year survival precision, but the mainland Minister of Finance Xie stressed: "The mainland economy is still developing, are still facing the impact of the global economic crisis, while the People's Bank (PBoC) raised deposit latest precision movement is a technical adjustment, this year will continue to be proactive in fiscal policy, and a moderate easing of monetary policy. "Vice Finance Minister Li Yong yesterday reiterated:" This year will try to appropriate control of the underlying inflation pressures, people line Zuixin announced the increase of deposit precision movement, designed to manage liquidity and inflation risk. " Translated from the mandarin Chinese text using google translator : (綜合外電)素有「末日博士」稱號的知名投資人麥嘉華（Marc Faber）公開警告，目前的跡象顯示，大陸經濟所有資產泡沫徵兆都已出現，恐將在9~12個月內成長趨緩，甚至有「崩潰」的風險。麥嘉華昨接受彭博專訪時警告說：「市場當前跡象正透露出不正常的訊息，大陸經濟泡沫跡象已浮現，無論如何經濟將逐步放緩成長腳步，甚至在未來 9~12個月會出現崩潰的風險。」麥嘉華另強調說：「上周上海世界博覽會正式開幕，但這對大陸並非一個好兆頭，回顧歷史，1873年主辦世博會的維也納，後來仍為股市下跌與經濟衰退所困擾。」受中共政府近期強力打房，以及3度調高存準率的衝擊，大陸上海綜合證券指數今年已來已大跌12%，為亞洲主要股市表現最糟。麥嘉華最新唱衰大陸經濟言論，也呼應了先前避險基金經理人查諾斯（Jim Chanos）與哈佛大學教授羅格夫（Kenneth Rogoff）先前看壞大陸經濟前景看法。儘管大陸今年第3度調升存準率，但大陸財政部部長謝旭人強調：「大陸經濟仍在發展，現依然面臨全球經濟危機的衝擊影響，而人民銀行（人行）最新調升存準率動作是技術性的調整，今年將繼續實施積極的財政政策，以及適度寬鬆的貨幣政策。」財政部副部長李勇昨則重申：「今年將盡力適度控制通膨潛在壓力，人行最新宣布上調存準率動作，目的是管理資金流動性和通膨風險。」
Marc Faber reveals for the first time his unique collection of Mao Zedong artifacts.
Marc Faber :"I do not think that China is a currency manipulator for the simple that China fixed its exchange rate in 1994 against the US Dollar at 1USD = 8.28 RMBs but after 2000 when the US implemented ultra expendituary monetary policies that led to the credit bubble and the housing boom that is non productive but it boosted US consumption above the trend line and a symptom of this over consumption was then the escalation of the trade deficit " "In my opinion any import duty on Chinese goods will rather be negative for the United States than anything else because according to the trade minister in China 60% of exports from China to the US are actually from multinational companies that have subsidiaries in china , I do not think it is 60% but say at least between 40% to 50% of Chinese exports to the US are manufactured by subsidiaries of multinationals in particular American companies and what it will also do is increase the cost to the US consumer " "It is very important to understand that the US economic policies and that have been a problem for the United States over the last 25 to 30 years that it has been geared towards stimulating consumption and not geared towards stimulating what I call capital formation , capital formation is capital spending on equipment and infrastructure on education on research and development and on innovation , I think that stimulus in the US is misguided because it always tells the consumer go and spend more when what they should do is actually to save more and to invest in productive capacities " "well basically cash is not attractive because under Bernanke monetary policies interest rates will stay at zero or below zero in real terms for ever in other words what you could have is essentially one day a FED fund rate of 5% or 10% but by then inflation will be say 10 percent or 15 percent or 20 percent so in real terms by holding cash and US government bonds for sure in the long run you are bound to lose money , so what's next what do people do with the rest of the money if bonds and cash are undesirable they will buy real estate or commodities or equities , now for many people the real estate market is not particularly atractive because A they are already overweight in real estate and under water so they are not going to buy real estate but in equities there is a lot of money that can flow in because that money can come out of money market funds and it could come out of bonds funds and so the equity market could actually surprise on the upside before the next bubble forms and then you have the next collapse which then brings up another even bigger crisis" Dan Mangru interviews Dr. Marc Faber (author of the Gloom, Boom, and Doom Report) on everything from China currency manipulation, import taxes, interest rates, stimulus, healthcare, and his collection of Mao Zedong artifacts.
All Governments in the western world have to be bailed out it's either gonna be through money printing or default
Marc Faber :"well i think it is another process of monetization , we have now synchronized the monetization in the world and what I mean is that essentially the Euro will remain weak and there will be more bailouts and for Greece this means terrific austerity and terrific recession , now the problem with the recession in Greece if you diminish the deficit from 30% in GDP o 3% is that as the economy shrinks the ability of Greece to pay its interests will also diminish and so they may default sooner or later anyway , but in the meantime certainly that is not optimistic or favorable for the Euro but it is of course favorable for resources , I'd like to add about resources that tax that Australia is introducing is negative for the companies that produce resources but it is positive for the commodities because it will contain the supply" "I can tell you all the government have to eventually be bailed out in the western world it is either gonna be through money printing as I think or default , but they are over indebted especially if you consider the unfunded liabilities that arise from future pensions from social security medicare medicaid and so forth it does not add up , they 'll all default or they'll all print money but the outcome won't be pretty that I assure you " The best is to swallow the hard medicine , when you have a financial problem to let companies that are weak go bankrupt and the same in the world , if you have weak governments , you have to look at Greece like a corporation there is no way that Greece can pay its debt it is over indebted the debt has to be restructured and not just shifted to the EU , so the best would have been essentially to leave the EU and default but of course that is unacceptable for many governments because the banks have lend too much money to Greece already " Marc Faber, publisher of the Gloom, Boom & Doom report, talks with Bloomberg's Haslinda Amin about the outlook for China's economy. Faber, speaking from Hong Kong, also discusses Greece's debt crisis and the euro, the commodities market, and the implications of political unrest in Thailand for the nation's economy and stock market.
Dr. Marc Faber also known as Dr Doom is an investment adviser, investment analyst and fund manager author and publisher of the Gloom Boom & Doom Report ,and the author of "Tomorrows Gold" . Dr Faber is known for his contrarian investment approach. Dr Marc Faber is associated with a variety of funds and is a member of the Board of Directors of numerous companies. In 1987 he warned his clients to cash out before Black Monday on Wall Street. He made them handsome profits by forecasting the burst in the Japanese Bubble in 1990. He correctly predicted the collapse in US gaming stocks in 1993; and he foresaw the Asia-Pacific financial crisis of 1997/98 and the resulting global volatility. Dr Doom motto is "Follow the course opposite to custom and you will almost be right" Mr. Faber is also the author of several books, including Tomorrow’s Gold – Asia’s Age of Discovery, and is a director of Ivanhoe Mines Ltd. , a mining firm focused on the Asia Pacific region. He is also an adviser to a number of private investment funds.
According to Marc Faber author and publisher of the Gloom Boom and Doom Report , the developed economies have now become more risky than emerging economies , in a recent interview with the Swiss news paper Letemps.ch he stated that The United States will seek to create an inflation of 6% per year, but will not be able to do it without problems on debt. To create this inflation rates will be kept exceptionally low, approaching zero as at present.
The deficit this year will be 1.6 trillion U.S. dollars and in the medium term is unlikely to be less than 1,000 billion, this will result in five or ten years, a payment of 35% of fiscal revenues and the interest.
The banks, now feeling safe will take the money and will pay 0% to 5%. This will penalize savers and enrich the banks.
In five or ten years we will have the effect of a new crisis, resulting from the bubble of borrowing countries. Some countries will fail, starting with the United States, which is already technically bankrupt.
Usually emerging markets are at bigger risk of failure, but today they have a financial situation better than many developed economies.
The most interesting markets for Faber are Thailand and Singapore, but also India and China, although on the latter prices are already very high.
Good prospects, again according to Faber, for commodities such as copper, nickel, iron and oil. Regarding gold, Faber maintains a 10 to 15% of the portfolio. On agriculture: they represent the best long term investment.
Regarding the stock market: it may grow, but in relation to the amount of money that will be printed.
Marc Faber: A lot of liabilities in the system have been shifted from the private sector to the government sector. The next train station in the global catastrophe journey is when governments go bust. That could happen in five, ten or 15 years.
Prime candidates are Greece, Ireland, Portugal, Italy, Ireland and Spain. Debt to GDP [gross domestic product] levels are also high in the United States and Britain. The US is bust today according to fair accounting standards. If it was a corporation it would be rated CCC and not AAA. via SwisInfo
April 30 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, talks with Bloomberg's Maryam Nemazee about Greece's debt crisis.
The best solution would be if you had a significant write-off for Greece. in other words, say they owe 100, then they should pay maybe 30 to 50 on the dollar. And the rest would have to be written off by the banks and other governments that have lent Greece money.
When you look at Greece like a corporation, they are basically bust. And if it is bust then it does not help to expand and actually increase loans.
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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