Saturday, August 28, 2010
"In 1999-2000, foreigners also wanted to buy the Nasdaq, and what happened after that was a massive collapse," Faber said. "So I don't see foreign buying as a very intelligent leading indicator." Marc Faber explained that he is 'not interested in buying an asset class that has been in a bull market for 19 years,' and that he would rather place his investments in farmland, agricultural commodities and of course gold.
Friday, August 27, 2010
Thursday, August 26, 2010
The other point I would like to mention is that during such crisis, governments should actually do nothing and let the market adjust from the downside. This is because as prices decline and drop, the affordability improves again and at some point buyers come in and as a result the system is cleaned.
However, if governments intervene with fiscal and monetary measures as the US has done, it sows the seeds for the next crisis. The crises in the post 1980s period such as Tequila, 1994, LTCM, 1998, Nasdaq bubble 2000 are all indicators of this trend. The measures led to formation of a bubble which then caused bubbles in other sectors of the economy. Therefore in my view the interventions which always happen nowadays in the Western democracies are actually not desirable.
Wednesday, August 25, 2010
“The bond market is the mother of all bubbles right now,” Peter Schiff says. “This decade is going to be the worst decade for bonds in US history.” If you want own Treasuries, Schiff suggests owning them in Switzerland or another country where the government isn’t as reckless as in the US. Marc Faber also advised to avoid US Treasuries he told CNBC recently : "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 think eventually inflation will accelerate," he said. "Whenever food prices go up, and grains have been very strong recently, with the sum delay, you get inflationary pressures."
10-year treasury yields fell to 2.570%, the weakest level since March 2009. While, the 30-year bond's yield reached 2.719%, the lowest level in 16 months.
Marc Faber cited a weakening U.S. dollar as a second reason to decrease holdings in the US debt.
"(The) U.S. dollar will weaken, that's the policy of the U.S. government to weaken the dollar in order to cushion the downturn in the American economy."
Peter schiff : I am sure I can speak for Mister Marc Faber as well I have met him several times and we agree on this , I think The Bond Market is the mother of all bubbles right now when it burst the loses will dwarf the losses of the combined losses of the stock market bubble and the real estate bubble , no the problem is there is no way for the government to pay this money back the only way they can do that will be a tax increase which is just horrendous and can never be accomplished , or the government gonna have to tell people on social security or medicare that they are not gonna get their checks because the government needs it to pay interests on the debt , and it is not only paying the interest , what i am afraid is that when people realize that we cannot pay this money back we're going to be able to roll all these short term debts so it's not just paying the interest , we gonna have start retiring the principal and that just impossible so it's going to be massive inflation ...."...."this decade is going to be the worst decade for bonds in history , bonds holders are going to be wiped out..."
Tuesday, August 24, 2010
Monday, August 23, 2010
Sunday, August 22, 2010
Saturday, August 21, 2010
Marc Faber : "Governments create problems , Governments are not there to solve problems , they are there to create problems and to take more and more power and freedom from individuals ..."I think in the US the stimulus spending will continue , and in my view the fiscal deficit that's say on an annual basis we are running at 1.5 trillion dollars in the last twelve months , in my view they'll be going up over time to around 2 trillion dollars annually and as far as the eye can see we are never going to have again deficit of less than a trillion dollars a year " "Te government policies are a constrain on the economic growth they are not stimulating economic growth quite on the contrary"
"we have a Credit bubble in China and when it will burst we will have some negative consequences" "the big issue in Asia are more of political nature , the tensions in the world are rising between the united States and China , because obviously it should be clear to anyone that China is of course the largest trading partner of North Korea and the great supporter of the North Koreans and this does not please the other Asian nations very much nor the US , so I think we are going into a more difficult environment where other issues than just US fiscal and monetary policies will determine the movement of asset market ""something that the Chinese will not do (in the future) is to continue to accumulate at the same rate they did in the past US treasuries , that won't happen , but whether they sell it right away or reduce the position , question of course also for them is where do you invest I, i think eventually the Chinese will build up their gold reserves and of course strategic reserves like copper or oil because that is in period of conflict would be very difficult to procure for China""so far i have been to some extent surprised that the Chinese were slow to essentially accumulate Gold because we told them already 8 years ago that they should actually increase their gold holdings which they did not do , but i think slowly especially if gold came down to a level below where the Indian central bank , the Reserve bank of India bought its gold because the Chinese they will perceive it as a loss of face if they pay the higher price than the Indians , so if the price drops below around $1050 I think the Chinese will come in""Basically I am optimistic that over time the price of gold will go up in paper currency term , I could also argue that the price of gold stays the same it is just the paper money depreciates against the price of gold , well as ten years ago you had to pay $250 to buy an ounce of gold now you have to pay close to $1200 , so there is a loss of purchasing power of money , a symptom of inflation , I think that over time paper money will lose even more value and so that gold is a store of value , but can it fluctuate , of course we live in a very volatile world , I just want to tell people who are interested in Gold , it is possible that the price of gold drops to $950 dollars if the Robert Prechter's scenario of the Dow Jones below 1000 comes about which I do not believe but just in case it comes about then Gold may be at $5000 may be it would have gone up who knows , I would rather imagine that in a huge debt contraction that everything will be down then something will be down to zero like paper cash in US dollars , the government bonds will be worthless shares will have some value and gold will have some value " "it's very clear that the richest people are not the ones that own government bonds in the long run , nor the ones that own cash but people that own real estate or paintings art or they own equities or they own their own businesses and so forth or mines , mining wells or oil wells and so forth..."
Friday, August 20, 2010
Thursday, August 19, 2010
Tuesday, August 17, 2010
Marc Faber, editor & publisher of The Gloom, Boom & Doom Report, says the rise of Asia's middle class will push up demand and add to inflation in the region. He tells CNBC's Bernard Lo & Karen Tso that price levels will continue to rise, particularly in Singapore & Hong Kong
Mohamed El-Erian in an interview with USA TODAY Money reporter Adam Shell on 15 Aug 2010
full interview >>>>
Monday, August 16, 2010
"Structural problems need structural solutions" “Forget about being hostage to mindsets that are very cyclical and look broader, because there are some major structural changes -- there’s some major realignment both at the national level and at the global level,” Mohamed El-Erian Told Bloomberg in a radio interview on Aug. 13, 2010 “We should not over-depend on the Fed,” he added. “The Fed does not have enough instruments for what we’re looking at. You need other agencies to get involved. We’re not getting any structural solutions.”
Aug. 13 (Bloomberg) -- Mohammed El-Erian, chief executive officer and co-chief investment officer at Pacific Investment Management Co., discusses Federal Reserve monetary policy. El-Erian, speaking with Tom Keene and Ken Prewitt on Bloomberg Radio's "Bloomberg Surveillance," also discusses deflation and the outlook for the U.S. economy. (This report is an excerpt of the full interview. Source: Bloomberg)
Saturday, August 14, 2010
Marc Faber : The experiment of the central banks and the fiscal packages that have been inactive by western governments will bitterly fail , but it may first work for a while in the sens that if you have cracks in a building and you put white paint on it it look better for a while . The problem will be that interest payments on the government debt will go up dramatically in the US , so you could end up with essentially a structure where fifty percent of tax revenues will eventually be used just to pay the interest on the government debt at that time the system breaks down than you have to monetize than you go to hyperinflation , hyperinflation usually is bad for the average household , the average household does not participate its real income goes down and then the end is that in order to distract the people from the problems you go to war...you may ask where is the enemy , well for sure the Americans will find someone somewhere , that's for sure , they can invent somebody
Slovenian philosopher Slavoj Zizek, aka The Elvis of cultural theory, is given the floor to show of his polemic style and whirlwind-like performance. The Giant of Ljubljana is bombarded with clips of popular media images and quotes by modern-day thinkers revolving around four major issues: the economical crisis, environment, Afghanistan and the end of democracy. Zizek grabs the opportunity to ruthlessly criticize modern capitalism and to give his view on our common future.
We communists are back! is the closing remark of Slavoj Zižeks provocative performance. Our current capitalist system, that everyone believed would be smoothly spread around the globe, is untenable. We find ourselves on the brink of big problems that call for big solutions. Whatever is left of the left, has been hedged in by western liberal democracy and seems to lack the energy to come up with radical solutions. Not Zižek.
In the white marble lobby outside the Al Jaheli theatre at the Armed Forces Officers Club and Hotel in Abu Dhabi, famed investor Marc Faber sits smoking quietly by himself.
The 60 or so financial analysts who are here for Mr Faber’s talk mill about the room, trading business cards and noshing on pastries, either unaware that the man sitting on a love seat in the middle of the room is the main attraction, or are too intimidated to approach him.
full article >>>
Friday, August 13, 2010
Thursday, August 12, 2010
Wednesday, August 11, 2010
"Prechter is right when he 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." A Dow 1,000 will be positive for one industry which is the Printing industry Marc Faber says. “Does anyone really think that the money printing presses won't run 24 hours a day?” ... 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" Marc Faber says
Faber does not rule out the eventuality of a world scale devastating war “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 ,
Monday, August 9, 2010
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.
Sunday, August 8, 2010
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.
“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.
Friday, August 6, 2010
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
Thursday, August 5, 2010
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...
Wednesday, August 4, 2010
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 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 ......
Monday, August 2, 2010
” 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.....
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 in the August edition of the GBD
Sunday, August 1, 2010
“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
Saturday, July 31, 2010
"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."
“If I lose the bet, I buy him a bottle of Cutty Sark, and if I win, I want a bottle of Dalwhinnie”
Friday, July 30, 2010
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.
Dr. Marc Faber Tomorrow's Gold
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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