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
Full article : www.arabianmoney.net If Marc Faber had to choose one asset class for the next 10 years it woud be gold. Cash and US treasuries would be be his least preferred decennial investment. US equities would be a reasonable choice for wealth protection, though not necessarily grow much when adjusted for inflation. This was the broad message that the author of The Gloom, Boom and Doom Report delivered to a CPA Institute meeting last night in Abu Dhabi, home of the world’s biggest sovereign wealth fund the Abu Dhabi Investment Authority. No deflationary bust He began by explaining why extreme deflation scenarios are extremely unlikely under the Bernanke Fed, comparing the Fed chairman’s commitment to an anti-deflation strategy to Hitler’s Mein Kampf, a book that also clearly stated a policy program in advance but was not widely believed until it was too late.
Full interview www.sqstudy.org EL-ERIAN: You know, Tom, all this speaks to what Ben Bernanke coined last week as the unusually uncertain outlook. Whether you look at the data, which is pointing in all sorts of directions, whether you look at the earnings, what we’re getting right now is very, very noisy picture. And it points to an uncertain outlook. Now, there’s two ways to think about this. One is, as you mentioned, certain data of backward looking, others are forward looking. The other thing – way to think about it is the reality that during regime shifts, data gets very noisy because you’re shifting from one regime to another and our inclination is the latter. Our inclination is to think of this as natural for a regime shift and we’re moving from a regime of high growth, leveraging, debt and credit entitlement to a more delivered, slower-growing, higher unemployment world.
“Investors should’ve listened to me already six months ago, when I wrote that the Fed will continue to monetize, and this is my view , they will never let up ? … they will print and print and print, until the final crisis wipes out the entire system,” Marc Faber
“I think that massive quantitative easing will come between say 870 to 950 on the S&P and my inclination is to believe that the July first low at 1010 will actually hold , and that the worst the economy becomes the more they’ll print money and the more equities can go up,” Marc Faber.
Marc Faber : "If you look at the different investment alternatives Equities, bonds, real estate, commodities and precious metals ... I think that equities should be represented in a portfolio, in particular, if you are very bearish about the world long-term, you probably be better off in Equities than in bonds.
Somebody said before that markets are now highly correlated and that’s true to some extent but not true from other perspective. Say 2008 everything went down and the US dollar rallied and the US government bonds rallied and more recently it’s been when you have a strong day in the stock market bonds go down and so forth. So not everything is correlated and the same applies to agricultural commodities." in a recent interview with CNBC
Marc Faber : "Investors should have listened to me already six months ago , when I wrote that the Fed would continue to monetize and this is my view...they will never let up. They will print and print and print, until the final crisis wipes out the entire system. They are very bad forecasters of economic events in particular that was the case for Mr Greenspan but Mr Bernanke is in the same boat. He has no clue what the economy is doing and so they misread in 2007 the severity of the forthcoming crises and then they misread the last few months the strength of the economy, which shows no signs of strengthening but signs of weakening everywhere in the world and therefore I would argue that the Federal Reserve with its policy, and with the writings and papers Mr Bernanke has published about the great depression, that more quantitative easing will be forthcoming and significantly more.
Let’s say they push money into the system that is true it may not go into stimulating capital investments, it may not go into consumption but it will go somewhere. Now this somewhere in the last few years has been mainly emerging economies that have accumulated huge foreign exchange reserves as a result of the US trade and current account deficit that led to the surpluses in these emerging economies. There isn’t outlet for excessive money creation. It can be in agricultural commodities or it can be in emerging economies or one day it could in wages in the United States I do not think it will happen. But we have inflationary pressures in emerging economies and eventually I suppose that this labor arbitrage in the world and the imbalances over-consumption in the US and capital spending and essentially savings in emerging economies , that this will lead to a readjustments of currencies and also to a readjustments of cost in other word that labor cost in emerging economies will go up substantially whereas in the Western world they will be flat to down in other words that real wages in the Western world will decline. But in this environment, you can’t be overly dogmatic. There will be a lot of bouts of inflation ...sudden explosions in prices like last year. Everybody in the world has some concerns about the ultimate value of the US dollar and also obviously about the value of US government bonds, because if the fiscal deficits stay at this level and in my opinion, they are likely to actually increase over time, then you will have a credit problem in US, sooner or later. It will not happen in next three years, but thereafter. So I think that the diversification out of US dollar treasuries is desirable and that’s why I am not all that negative about equities.
If you look at the different investment alternatives Equities, bonds, real estate, commodities and precious metals ... I think that equities should be represented in a portfolio, in particular, if you are very bearish about the world long-term, you probably be better off in Equities than in bonds. Somebody said before that markets are now highly correlated and that’s true to some extent but not true from other perspective. Say 2008 everything went down and the US dollar rallied and the US government bonds rallied and more recently it’s been when you have a strong day in the stock market bonds go down and so forth. So not everything is correlated and the same applies to agricultural commodities.
I wrote already six months ago that unlike any other commodity the agricultural commodities had gone down in 2009 certainly unlike the industrial commodities and that wheat was, at the beginning of the year, at 200 years low in real terms and when food prices move they move a lot and they have a huge impact on the world because there are studies that have been made by the Federal Reserve Bank of St Louis that show that actually food prices are a leading indicator of inflation. So I think that at the agricultural sector is actually quite attractive. There are two factors in agriculture ...obviously demand, expanding when you have people moving from poverty to the middle class and than to more affluent class they eat more specially protein rich types of food and then you have the other impact that is more meaningful and this is supply interruptions by droughts and floods and so forth. This year we have a lot of unusual weather. We have floods in Pakistan and we have heat waves in Russia and so forth that may disrupt crops." ..This transcript was made manually and hence it is very approximate...
“You can talk all day long about the good economic numbers that came out …but you also have to look at a 10-year treasury yield that’s below 3 percent and some economic signs that really aren’t that good,” Joe Clark, founder and CIO of Financial Enhancement, told CNBC, when asked if he felt we're in a bull or bear market. Marc Faber : well basically my view is this , the market if it goes to below 1000 , we all , you as employees of CNBC and I would not have a job we will have other problems in this world most banks will be bust , the government will be bust and your deposit will not be worth very much ...so if it goes to 1000 actually you may be better off being in shares than in bonds than in government bonds and bank deposits , secondly i am outlining in that report that I do not below we will go to 1000 , i think that massive quantitative easing will come between say 870 to 950 on the S&P and my inclination is to believe that the July first low at 1010 will actually hold , and that the worst the economy becomes the more they'll print money and the more equities can go up ...that is my view I am ultra bearish about everything but in this scenario of being ultra bearish about everything you probably can be better off in equities in the long run than in bonds and in cash ....
Marc Faber : “Investors should’ve listened to me already six months ago, when I wrote that the Fed will continue to monetize, and this is my view , they will never let up ? ... they will print and print and print, until the final crisis wipes out the entire system,” Marc Faber, editor & publisher of The Gloom, Boom & Doom Report, told CNBC. David Bloom from HSBC joined the discussion, adding, "I think we're not quite at those draconian points."
Marc Faber continues : "they are very bad forecasters of economic events , in particular that was the case for mister Greenspan , but Mister Bernanke is in the same boat , he has no clue what the economy's doing , and so they misread in 2007 the severity of the forthcoming crisis and then they misread in the last few months the strength of the economy which is unlike your commentator before just said shows no sign of strengthening but signs of of weakening everywhere in the world and therefor I would argue that the federal reserve with its policy and with the writings and papers mister Bernanke has published about the great depression that more quantitative easing will be forthcoming , and significantly more...."
Marc Faber continues : well i think that everybody in the world has concerns about the ultimate value of the US dollar and also obviously about the value of the US government bonds because if the fiscal deficit stays at this level , in my opinion they are actually going to increase overtime and obviously you will have a credit problem in the United States soon or late , it is not gonna happen in the next three years but thereafter , so I think that diversification out of the US dollar treasuries is desirable and that's why I am not all that negative about Equities , i think that if you look at the different investment alternatives Equities bonds real estate commodities and precious metals , I think that equities should be presented in a portfolio ...in particular if you are very bearish about the world in the long term , you probably be better off in equities than in bonds ......
Marc Faber : “I mean I’ve been arguing this year that the economy would inevitably slow down, because the impact of the stimulus would diminish. But having said that, the economy hasn’t crashed yet. It could still crash. But on the other hand, if you look at the performance of equities worldwide, it seems that the worse the economic news is, that the more the markets go up, because the market participants expect further easing measures, and maybe further stimulus. So altogether I would say it’s not going to be a disaster for stock investors yet. It’s interesting. The Chinese stock market began to discount the slowdown in economic growth actually precisely a year ago, in August, 2009. The market peaked out. And then drifted lower, but now that the bad news is essentially out, the market has started to rebound.”
” I’d like to make the following observation. We have a global economy, and an economy has different sectors. And you can have recession in some sectors of the economy. You can have a crash, say, in the property market, and you can have other sectors expanding."
when Marc Faber was asked about the overheating of the Chinese property market he answers :
"Well, I’m not sure. Because if the ease of again, the speculation will go on. But we have credit problems in the property market undoubtedly. We have Ponzi schemes like of loan sharking operations all over China. That’s a very dangerous, and so forth . But what I would like to point out is that the agricultural sector, the rural sector in China and everywhere in the world is doing relatively well, because agricultural prices have started to rebound. And that was also seen in Thailand. In Thailand, new car sales are up very strongly.” Marc Faber is asked if he believes the Chinese government will delay increasing interest rates this year : Marc Answers :
“I think even if they increase it marginally it’s meaningless. Because interest rates are far below nominal GDP growth, and in my opinion far below inflation.”
This transcript was done manually and it is very approximate.....
Aug. 2 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom Report, discusses China's economy. Faber, speaking with Deirdre Bolton on Bloomberg Television's "InsideTrack," also talks about Chinese stocks and interest-rate policy. (This is an excerpt of the full interview. Source: Bloomberg)
Marc Faber from Zurich in Switzerland : I have been arguing this year that the economy would inevitably slow down because the impact of the stimulus will diminish , but having said that , he economy hasn't crashed yet , it could still crash but on the other hand if you look at the performance of equities worldwide it seems that the worse the economic news is that the more the market goes up because the market participants expect further easing measures and may be further stimulus so all together I would say it's not going to be a disaster for stock investors yet and it is interesting that the Chinese stock market begun to discount the slowdown in economic growth , actually precisely a year ago in August 2009 the market peaked out and then drifted lower but now that the bad news is essentially out , the market has started to rebound ...etc...
Marc Faber says if the Dow falls below 1,000, "Buy a self-sustainable farm in the middle of nowhere 'surrounded by high voltage fences and barbed wire and equipped with booby traps and an arsenal of machine guns, hand grenades and armed vehicles guarded by vicious Dobermans". He was responding to Robert Prechter, who predicted the DOW to fall below 1000 basing his interpretation of Elliot Waves, Fibonacci numbers and socioeconomic trends believes that the stock market is historically overvalued in terms of dividends and earnings, because of a "great rise in positive social mood'
If you have to buy stocks make it Asian equities and REIT's in Thailand, Singapore, and Malaysia. They have high yields and are attractive compared to 3% 10 year treasuries. Asian economies will continue to grow at a healthy clip even with weakness in the US and Europe, which makes them good investments. Marc Faber in the August edition of the GBD
“The next war will be a dirty war,” "What are you going to do when your mobile phone gets shut down or the internet stops working or the city water supplies get poisoned?” Marc Faber told fund managers in a keynote speech at CLSA’s annual investment forum in Tokyo early this year ,
“When I tell people to prepare themselves for a dirty war, they ask me: “America against whom?” I tell them that for sure they will find someone.” Marc Faber added
"Buy a self-sustainable farm in the middle of nowhere 'surrounded by high voltage fences and barbed wire and equipped with booby traps and an arsenal of machine guns, hand grenades and armed vehicles guarded by vicious Dobermans". That was Marc Faber suggestion for trading the DOW below 1,000...
"When the turn comes and inflation and rates rise, all the money in bonds will move into equities." "At some point people won't want to be compensated at two percent in bonds, and will put money into stocks. Government bonds will not be a good investment for the next 10 years." in newsblogs.chicagotribune.com
"I'm a believer that the stock market lows of March 2009 will not be revisited. You have people like Robert Prechter who think the Dow will collapse to 700 because of debt deleveraging. Debt deleveraging could happen, but the Dow will not fall because of monetary policy. The Fed will keep everything inflated in nominal terms. And if the Dow does go to 700, you'll have more to worry about than your investments. All the banks will be bust. The government will be bust. You don't want cash if massive deflation happens. On the contrary: It will be worthless. You have to think very carefully about hardcore deflation." in fool.com
Economist David Rosenberg and investor Marc Faber have wagered a bottle of scotch whiskey on whether U.S. 10-year Treasury yields can go lower than 2 percent:
“If I lose the bet, I buy him a bottle of Cutty Sark, and if I win, I want a bottle of Dalwhinnie”
"Prechter is right when says that when manias come to an end, prices tend to retreat to where the mania started. So from this point of view, a Dow Jones at 1,000 should not be excluded," ."It is likely that if the Dow where to fall by more than 20 percent from the present level there would be further massive fiscal and monetary stimulus packages – not just in the US but worldwide," Marc Faber wrote in the In the August edition of the ‘The Gloom, Boom & Doom Report’"The question here is really, with the Dow below 1,000, what kind of dollars – and especially what kind of dollar credits – will survive," via CNBC.com
John Williams is author of “Shadow Government Statistics,” an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net of financial-market and political hype. john williams shadowstatscom Mining Stock Talk Interviews John Williams of ShadowStats.com ."John Williams’ Shadow Government Statistics" is an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net of financial-market and political hype.
In this powerful interview, John shares his research realities on unemployment, the staggering growth in the U.S. Monetary Base, a coming “hyperinflation” , gold, and what he’s doing to prepare and protect his family going forward.
Williams believes that the printing of trillions of dollars to fight the depression will lead to a "hyperinflationary depression".
John Williams aka Walter J. "John" Williams was born in 1949. He received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies.
John Williams' Shadow Government Statistics is a monthly electronic newsletter that exposes and analyzes the flaws in current U.S. government data and reporting, as well as in certain private-sector numbers.. It also looks at the financial markets free of the hype so often put forth in the popular financial media. Generally published on the second Wednesday of the month, the newsletter is supplemented by Flash Updates and occasional Alerts that highlight unusual developments.
Williams is advising people to stock up on gold and booze to bargain with once the hyperinflation makes dollars worthless:
“Three or four years into the future I think we could be in a hyperinflation, within the current year you’re going to see much higher inflation than most people are looking at,” Williams told MarketWatch.
Williams said that his definition of hyperinflation would be a situation in which a $100 dollar bill would become more functional as a piece of toilet paper than a store of value.
“This is a time when you want to preserve your wealth and assets because inflation will knock the value out of it,” he added, advising that people buy physical gold and assets other than the U.S. dollar.
“Then when the hyperinflation hits you’ll see disruption of normal commerce, you won’t have enough $100 dollar bills to buy what you want,” said Williams, adding that items to barter with, such as a bottle of scotch, would be more valuable than actual cash, even in large quantities.
Investment advice from Wall Street Bear David Rosenberg , Rosenberg is still bullish after all this years on Gold.... "you can't be in cash" "Gold production peaked ten years ago , tell me when the production of Fiat Currency is gonna to peak ? " asks David Rosenberg " It's a no-brainer that the Gold is gonna go a lot higher "
Marc Faber, author and publisher of the Gloom Boom and Doom Report, says the Standard & Poor’s 500 Index might see a little bit of more bounce but will really stay rangebound. He also says deficits rising around the world will be a big problem.Marc Faber : Well Basically we got very over sold at the beginning of July and since then we rallied quite strongly , I think that we can rally some what more but if we look at the S&P the low was 1010 and the previous support was 1040 and the top at the end of April was 1219 so around 1170 there is a lot of resistance and it will be very difficult for the market to get through that resistance ....we have to distinguish between what central Banks and the governments in the western world say and what they will do , I am not a great believer in this austerity that they are proclaiming , I think the fiscal deficit will actually stay very high or even increase and I think that if they decrease the fiscal deficit then it will be offset by very expansionary monetary policy in other words monetisation , so the whole burden to support the economy will fall on the monetary policies then they'll print money like crazy and so I would not pay too much attention to what they say but to what the markets do and it seems to me that the people that predicted the DOW JONES 1000 or S&P 500 or S&P 200 I think they're misreading the facts that under fiat monetary system you can print endless quantity of money and so stocks may adjust in real terms but not necessarily in nominal terms to the extent that the super bears are predicting ...
Nouriel Roubini Gary Shilling David Rosenberg these are the true deflationists says doctor Marc Faber they advice to be in US government bonds and to basically avoid everything else ...adds Marc Faber : I do not think that the US Bonds are desirable investment for the next 5-10 years....Investments in US Bonds and cash may be a very risky strategy in the long run , Dr Faber rather sees inflation coming than deflation : I am not a great believer in deflation , all the prices around the world are going up says Dr Faber ...
“I am not a great believer in this austerity that they are proclaiming,” Faber said in a recent interview
“I think the fiscal deficit will actually stay very high or even increase," he said. "And I think that if they decrease the fiscal deficit then it will be offset by very expansionary monetary policy, in other words monetization, so the whole burden to support the economy will fall on monetary policies, then they’ll print money like crazy,” he said.“Under a fiat monetary system you can print endless quantities of money and so stocks may adjust in real terms but not necessarily in nominal terms to the extent that the super bears are predicting.”
Marc Faber, investment guru and editor and publisher “The Gloom, Boom & Doom” report, said that markets were in an oversold zone in early July and since then global markets have rallied strongly and could rally somewhat more.
Marc Faber"We've had a trend for most of the past 200 years: GDP of countries like China and India went down while the West surged. That's now changed. Emerging economies will go up, and your children in the West will have a lower standard of living than you did. Absolutely. We won't sink to the bottom of the sea. But other countries will grow much faster than us. The world is very competitive, and the odds are stacked against us. Americans, with their inborn arrogance, will not let it go that easily, so there will be lots of tension going forward."Marc Faber 's speech at Agora Financial Symposium via zerohedge.com
Marc Faber : I do not think that the budget was particularly encouraging , I do not thing there are enough privatizations but in the other hand I do not think it's a huge disappointment , now what happened in India is we had a very powerful rally from the inter-day? low in November 2008 from less than 8000 to recently over 15000 ....and I think what we may see now is possibly a retracment of the gap we had between 12000 and 14000 when the election took place , so I won't be surprised to see the index go back to I don't know say the range of 12000 before the bull market resume but I do not think we will make new lows in the index ...etc...Marc Faber believes that the correction is only desirable and is desirable from a long term prospective , even if India does not grow at 9 percent and only grows at 5 or 6 percent it is not the end of the world says Marc Faber
Marc Faber asks how to invest $100,000 answers from Nassim Taleb, Hugh Hendry and others ...The video dates back in February 2010 , but it is still a great watch and very informative
NASSIM TALEB: Yeah, it's strangely enough in South Africa that I learned about the idea of Mother Nature. It came to me when I went to Pilansberg five years ago, I think, five or four years ago and I just realised that the national systems are now stable, start looking into the workings of Mother Nature as the smartest risk manager of all. Something that has worked for billions of species, for billions of years has to have some stability. So I rewrote The Black Swan, then completed The Black Swan, added a hundred pages on robustness and fragility - what is fragile and what is robust. in Moneyweb.com 20 July 2010
"The typical U.S. investor tends to have about 80% of equities in the U.S. The world of tomorrow suggests a much greater exposure overseas. In general, you should consider holding a third of your equities in the U.S., a third in industrial countries outside the U.S., and a third in emerging markets." PIMCO co-CEO Mohamed El-Erian told Money magazine
Dr. Marc Faber, the economist, investor and long-time member of the prestigious Barron’s Roundtable, offers up some good perspective on investing in his latest Monthly Market Commentary newsletter. The title of the commentary is “One of the First Duties of the Investment Advisor is Educating the Masses not to Speculate,” and it’s worth grabbing out a few of his key points. I feel that most investors take far too many risks – often with borrowed money – and fail to diversify sufficiently. They also have little patience, very short-term time horizons and no tolerance for losses. Finally, their expectations about investment returns are completely unrealistic… Most investors buy a stock or make an investment with the view that within a month the return should be between 10% and 20%.
“I think that we can rally some what more but if we look at the S&P the low was 1010 and the previous support was 1040 and the top at the end of April was 1219 so around 1170 there is a lot of resistance and it will be very difficult for the market to get through that resistance ….”
Nouriel Roubini Gary Shilling David Rosenberg these are the true deflationists says doctor Marc Faber they advice to be in US government bonds and to basically avoid everything else ...adds Marc Faber : I do not think that the US Bonds are desirable investment for the next 5-10 years....Investments in US Bonds and cash may be a very risky strategy in the long run , Dr Faber rather sees inflation coming than deflation : I am not a great believer in deflation , all the prices around the world are going up says Dr Faber ...
CNBC July 20 2010 | Mohamed El-Erian, CEO and co-CIO at Pimco, shares his market insight with CNBC.com...The major issue is The mindset in Washington says Mohamed El-Erian The market is giving a clear signal it is saying let's focus on top revenue it is not enough to focus on the bottom line because we want to see top line revenue growth because we want to see sustainable earnings ...and the companies are falling short , most of them are falling short of the top line revenue growth that was anticipated so the focus has shifted to what is sustainable and we are getting the impact of muted growth unemployment and deleveraging .......etc....
Marc Faber : I am convinced they will implement further quantitative easing and massively so , it will probably happen in September October ...The economy is not robust , we have mixed signals but in general the economy is still weak Marc Faber told Bloomberg early this week
Marc Faber : Well Basically we got very over sold at the beginning of July and since then we rallied quite strongly , I think that we can rally some what more but if we look at the S&P the low was 1010 and the previous support was 1040 and the top at the end of April was 1219 so around 1170 there is a lot of resistance and it will be very difficult for the market to get through that resistance ....
we have to distinguish between what central Banks and the governments in the western world say and what they will do , I am not a great believer in this austerity that they are proclaiming , I think the fiscal deficit will actually stay very high or even increase and I think that if they decrease the fiscal deficit then it will be offset by very expansionary monetary policy in other words monetisation , so the whole burden to support the economy will fall on the monetary policies then they'll print money like crazy and so I would not pay too much attention to what they say but to what the markets do and it seems to me that the people that predicted the DOW JONES 1000 or S&P 500 or S&P 200 I think they're misreading the facts that under fiat monetary system you can print endless quantity of money and so stocks may adjust in real terms but not necessarily in nominal terms to the extent that the super bears are predicting ...
Nouriel Roubini Gary Shilling David Rosenberg these are the true deflationists says doctor Marc Faber they advice to be in US government bonds and to basically avoid everything else ...adds Marc Faber : I do not think that the US Bonds are desirable investment for the next 5-10 years....Investments in US Bonds and cash may be a very risky strategy in the long run , Dr Faber rather sees inflation coming than deflation : I am not a great believer in deflation , all the prices around the world are going up says Dr Faber ...
“I am not a great believer in this austerity that they are proclaiming,” Faber said in a recent interview
“I think the fiscal deficit will actually stay very high or even increase," he said. "And I think that if they decrease the fiscal deficit then it will be offset by very expansionary monetary policy, in other words monetization, so the whole burden to support the economy will fall on monetary policies, then they’ll print money like crazy,” he said.“Under a fiat monetary system you can print endless quantities of money and so stocks may adjust in real terms but not necessarily in nominal terms to the extent that the super bears are predicting.”
Marc Faber, investment guru and editor and publisher “The Gloom, Boom & Doom” report, said that markets were in an oversold zone in early July and since then global markets have rallied strongly and could rally somewhat more.
"The market is giving you a very clear signal. It's saying, 'Let's focus on top-line revenue. It's not enough to focus on on the bottom line, because we don't want to see one-off cost containment, we don't want to see one-off items being shifted," "We want to see top-line revenue growth because we want to see sustainable earnings, and the companies are falling short...of the top-line revenue growth that was anticipated."Mohamed El-Erian told CNBC via CNBC
"I feel that most investors take far too many risks – often with borrowed money – and fail to diversify sufficiently. They also have little patience, very short-term time horizons and no tolerance for losses," Marc Faber writes.
"Their expectations about investment returns are completely unrealistic… Most investors buy a stock or make an investment with the view that within a month the return should be between 10% and 20%," he added
"If you can achieve an annual average real return of just 3% on all your assets (inflation adjusted), you will leave a huge fortune to your children".
"The prime consideration should always be capital preservation and avoiding large losses," Faber concludes
“I am not a great believer in this austerity that they are proclaiming. I think the fiscal deficit will actually stay very high or even increase and I think that if they decrease the fiscal deficit then it will be offset by very expansionary monetary policy, in other words monetization, so the whole burden to support the economy will fall on monetary policies, then they’ll print money like crazy. “I would not pay too much attention to what they say but to what the markets do and it seems to me that the people that predicted the Dow Jones at 1000 or S&P at 500 or 200 are misreading the facts that under a fiat monetary system you can print endless quantities of money and so stocks may adjust in real terms but not necessarily in nominal terms to the extent that the super bears are predicting.”
This is an interview in french with radio host Jovanovic
Marc Faber : you should own farm land in order to stay clear in a case of war , because I believe that before the whole system collapses the governments will start inflating the money supply by printing more money until the situation is no longer sustainable , after that the government will start a war , the worse place to be in such a case would be a financial center City , this way the government will turn the attention of its people towards a newly fabricated common enemy, another incentive for war would be the shortage in basic commodities ...
Mish" Shedlock, author of Mish's Global Economic Trend Analysis
Mish : we have been heavily in treasuries and moist people mocked that , but we've done rather well in treasuries , I think treasuries still have little life left in them certainly treasuries are no where near the buy when at ten year was 4 percent now its down to three ...I think it's quite possible and we need to keep an open mind in this that the bull market in treasuries is not over ...in fact if you look at two years treasuries we are floating at all time record lows right now .....
Marc Faber : I am convinced they will implement further quantitative easing and massively so , it will probably happen in September October ...The economy is not robust , we have mixed signals but in general the economy is still weak
July 16 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, says he's "convinced" the Federal Reserve will soon implement "massive" quantitative easing policies. Bloomberg's Sara Eisen reports. (Source: Bloomberg)
Marc Faber : Well Basically we got very over sold at the beginning of July and since then we rallied quite strongly , I think that we can rally some what more but if we look at the S&P the low was 1010 and the previous support was 1040 and the top at the end of April was 1219 so around 1170 there is a lot of resistance and it will be very difficult for the market to get through that resistance .... we have to distinguish between what central Banks and the governments in the western world say and what they will do , I am not a great believer in this austerity that they are proclaiming , I think the fiscal deficit will actually stay very high or even increase and I think that if they decrease the fiscal deficit then it will be offset by very expansionary monetary policy in other words monetisation , so the whole burden to support the economy will fall on the monetary policies then they'll print money like crazy and so I would not pay too much attention to what they say but to what the markets do and it seems to me that the people that predicted the DOW JONES 1000 or S&P 500 or S&P 200 I think they're misreading the facts that under fiat monetary system you can print endless quantity of money and so stocks may adjust in real terms but not necessarily in nominal terms to the extent that the super bears are predicting ... Nouriel Roubini Gary Shilling David Rosenberg these are the true deflationists says doctor Marc Faber they advice to be in US government bonds and to basically avoid everything else ...adds Marc Faber : I do not think that the US Bonds are desirable investment for the next 5-10 years....Investments in US Bonds and cash may be a very risky strategy in the long run , Dr Faber rather sees inflation coming than deflation : I am not a great believer in deflation , all the prices around the world are going up says Dr Faber ...
Marc Faber, investment guru and editor and publisher “The Gloom, Boom & Doom” report, said that markets were in an oversold zone in early July and since then global markets have rallied strongly and could rally somewhat more.
Nial Fergusson : well let me make clear that as far as I am concerned this rivalry is purely unintellectual one it's not so much within economics , I am not an economist I am a historian it's more of a debate between an economist and a historian about what the lessons of the great depression are ...and that's in my view what all this is all about ...I leave all personal consideration aside I do not think we could be best buddies ......"this is a political problem Niall Fergusson noted and until Washington has its mind focused but yet more bad economic news I do not think there's gonna be any change to that situation .we are fiscally Gridlocked .., republicans want tax cuts democrats want to spend more money and the result is deficit after deficit after deficit.....
Symptoms Of Deflation
"Another symptom of growing deflationary pressures and expectations is a collapse in lumber prices and the recent rally in long-term government bonds."
Marc Faber does expect a Banking crisis for this year but in the next five to ten years ..."you see we had a financial crisis basically the financial system went bust , but it was bailed out by the government , the next time when the train stops is when the government goes bankrupt , and that day I really look forward when the government goes bankrupt because that really what they deserve..." says Marc Faber , Marc Faber believes that the US will go to war (in the next ten years or so ) regardless against whom cause the US has always been good at finding foreign enemies somewhere , Marc Faber also predicts that the US may stop paying the bonds to foreigners especially in case of war
Dr. Marc Faber author and editor of the Gloom boom and Doom report advises against the use of leverage for small investors , Marc Faber says that he is not sure about deflation ,he believes that the Gold bull market will continue and along the way of this bull market corrections may happen ....Marc Faber is not convinced that bonds will rally past their previous 2008 highs "All I have to say to deflationists : if they're right and we have wide spread deflation I am not sure that treasuries will rally because the fiscal deficit will go ballistic and the quality of the government debt will diminish " says Marc Faber...Faber believes that the stock market may have topped in April , The Federal Reserve have been bubble blowers and Obama is a complete disaster says Dr. Marc Faber , stocks will outperform bonds says Marc Faber ....finally due to the coming hyperinflation Marc Faber recommends some gold, equities, and some cash. But no bonds.
“One day when interest rates go up… the interest payments on the government debts will balloon, and in say 7 years time, the interest payments on the US government debt will be between 35% to 50% of tax revenues. Then you are in a huge mess.”
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.
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