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
The financial crisis has shown that speculation, funds, and credit default swaps create a huge amount of virtual wealth, but the real economic motor is driven by the manufacture of products using the earth's natural resources. The race is already on to control rare resources like lanthanum, scandium and thulium; essential for hi-tec but everyday products such as computers and mobile phones.Even without environmental regulations, China has more deposits. We simply don't know where the rare earth minerals are.What a coincidence how the U.S just happened to find those resources in Afghanistan! the regulations that restrict mining and exploration in the western/developed world, do not apply to the likes of the Democratic Republic of Congo (DRC) South America and China.
Fed Chairman Ben Bernanke gives a rare interview to Scott Pelley in which he discusses pressing economic issues, including unemployment, the deficit and the Fed's controversial $600 billion U.S. Treasury Bill purchase.
He knows what is coming down the line: civil unrest. Pelley failed to ask some hard follow-up questions like, "So do you think Congress will extend unemployment benefits for 'a protracted period of time'?" Not one word about why they exclude food and energy prices from inflation calculations. "Some people think the $600 billion is a dangerous thing to try." That would include members of the Federal Reserve. "Panic of 2008"? Only panic was at Goldman Sachs - will I get my bonus? Sure!At this point there's nothing to save this house on cards economy. This system encourages people to act irresponsible, taking on huge risks to overconsume. When you over-consume you take your future consumption away, and here we are out of money buried in debt. It needs a national chapter 11 to liquidate the debt in the system before it can truly recover. A few QE tweaks here and there ain't gonna cut it.
Marc Faber :"...I am still positive about economic growth in the emerging world. But what disturbs me at the present time is that in late August, sentiment was very negative worldwide and people said that Dow will drop to 1000 and so forth and so on. Suddenly now, the consensus is that you have to be in equities, you have to be in gold, you have to be in assets because central banks around the world will print money. That is correct, they will print money. But sentiment has become so universally bullish that about all assets, including especially emerging economies - in US dollar terms - are up. The Indian market this year is already up 19%, Malaysia 28%, the Philippines, Indonesia and Thailand each over 40%.
We already have big moves and I see all the brokers upgrading the earnings estimates and so forth. So I become a little bit apprehensive about this universal bullishness. I would rather think that after a strong month of September - when everybody was expecting September to be a horrible month - October and November may be bad months. In the past, October has frequently been a disastrous month like we had the October 1987 crash, we had the late September-early October 1929 crisis. In 1976 and 1978, we had very bad months in October and November. So who knows, out of this present bullishness, we could have some kind of a sharp correction developing. ..."
Marc Faber:"...In general, investors should one day have approximately 50% or more of their money in emerging economies. I have all my money in emerging economies for the money that they allocate to real estate and to equities. Of course I also have bonds in the developed world and also cash in on the developed world, but in general, I am very optimistic about the emerging economies. But that does not change the fact that over the last few months, in fact since April because I saw that April would be a high for the S&P at 1219, I have taken some money off the table because a correction is overdue. ..."
Marc Faber :"...We have high volatility in all markets, a 10% move is nothing now-a-days. We have very high intraday volatility in the markets. We had never before so many up days with volumes of 9 to 1 and down days with volumes of 9 to 1. The downward volume is 9 times the upward volume and on up days, the up volume is 9 times the down volume. This is most unusual. So we have this volatility and this volatility comes about because the private sector is basically still deleveraging while the government sector is leveraging up. So you have economic and financial volatility in markets that is very high. ..."
Marc Faber :"...I think that commodities have not only been strong recently, they have been strong for a long time, specifically precious metals. If you look at the Dow Jones in gold terms it peaked out in 1999, and is not down 84% in gold terms. In other words you can’t measure any thing any more in dollars because the function of money is to be among others a store of value and also unit of account, but if you print and print and print, the function of store of value expires or is non existent, and the unit of account doesn’t work anymore. So we need to take a new unit of account which is gold or silver and in those terms, the US economy has contracted massively since the year 2000 and the dollar has been very weak as well as the bond market and eh stock market in gold terms...."
Niall Ferguson : China Bail Out the EU , CNN's Fareed Zakaria and Niall Ferguson and the FT's Gillian Tett on the EU crisis and possible help from China.
Marc Faber :.....So actually, the US monetary policies have been very good for Asia, specifically for China because it fostered industrial production growth in China, employment growth, wage increases, domestic consumption, increased demand for raw materials, that then lifted commodity prices. For that actually the developing world, the emerging economies including China, India , Vietnam, Brazil and so forth should all send a thank you note to Bernanke......
Marc Faber : ...We have high volatility in all markets, a 10% move is nothing now-a-days. We have very high intraday volatility in the markets. We had never before so many up days with volumes of 9 to 1 and down days with volumes of 9 to 1. The downward volume is 9 times the upward volume and on up days, the up volume is 9 times the down volume. This is most unusual. So we have this volatility and this volatility comes about because the private sector is basically still deleveraging while the government sector is leveraging up. So you have economic and financial volatility in markets that is very high....
The University of Edinburgh Enlightenment Lecture Series with the support of ScottishPower presents Globalisation & the 21st Century Enlightenment by Joseph Stiglitz.
The Principal of The University of Edinburgh, Timothy OShea said: The University is delighted to welcome Joseph Stiglitz to speak as part of our Enlightenment Lecture Series. He is one of the giants of economics, his contributions across every part of the discipline are recognised the world over. He has already played a major role in shaping events in the worlds recent economic history, and now he is set to shape our future with his ground breaking theories on how globalisation needs to work for disenfranchised peoples worldwide. His lecture examining themes of global economics for the new millennium promises to be a fascinating insight into new economic theory.
Marc Faber:"...My principal criticism is that the Federal Reserve can drop dollar bills onto the United States from helicopters as Mr Bernanke says - not from helicopters but electronically they can print money. The criticism I have is that Fed can control the quantity of money quantity that it drops onto the United States. But they do not control where it will flow to and this money has flown through the American trade and current account deficit to emerging economies and this has boosted the growth rates in emerging economies and their currencies. So the benefit of expansionary monetary policies has not been felt in the United States, but in emerging economies and that is my main criticism.
Now what happens if so much money flows to emerging economies is that you get bubbles over time - currency bubbles, stock market bubbles, real estate bubbles. The question is then how do these emerging economies’ central banks react to that. The Brazilian Finance Minister has just said we are in the midst of a currency war, a foreign exchange war and the central banks of emerging economies have a choice to do nothing - then they have high domestic inflationary pressures with accompanying bubbles - or they tighten monetary policies and their currency becomes even stronger and you have a speculative bubble in the currency. So the Fed has put them actually in a very difficult position and I believe we are going to end up with bubbles in precious metals and to some extent in emerging economies’ real estate and equity markets and every bubble eventually bursts. It does not have to happen tomorrow. It could last another year, but the Fed is actually endangering emerging economies at the present time. ..."
Marc Faber :."...I think that commodities have not only been strong recently, they have been strong for a long time, specifically precious metals. If you look at the Dow Jones in gold terms it peaked out in 1999, and is not down 84% in gold terms. In other words you can’t measure any thing any more in dollars because the function of money is to be among others a store of value and also unit of account, but if you print and print and print, the function of store of value expires or is non existent, and the unit of account doesn’t work anymore. So we need to take a new unit of account which is gold or silver and in those terms, the US economy has contracted massively since the year 2000 and the dollar has been very weak as well as the bond market and eh stock market in gold terms..." ..... in a recent interview with moneycontrol
Marc Faber : "...Yes I think the criticism arises because we have too much of a good thing, in other words the Fed's monetary policies now lead to some kind of bubbles in emerging economies through capital flows. Now this incoming liquidities they can be absorbed in 2 ways, either like the currency appreciate sharply or you have domestic very high asset inflation or combination of the two. The problem is, with all this, that once the speculators see that said the Thai Baht, or the Malaysian Ringitt appreciates and that asset prices in those countries go up, they pile in even more and then you have even larger speculative bubbles,and excess liquidity and dropping dollar bills on the United States from helicopters like Ben Bernanke suggested, the problem with that is he doesn’t know where the money will flow and in this case, excess liquidity flows, into emerging economies and into precious metals and new bubbles are building up, that at some point in future, will burst and then you have another problem on your hands the way you had the problem of the Nasdaq bubble burst and the housing bubble burst...."in moneycontrol.com
Joseph Stiglitz on American banks The violations have been massive The Nobel prize-winning economist says banks are undermining the rule of law in America and bad mortgages still fester
Dec. 1 2010 | The Federal Reserveon Wednesday revealed the details of some $3.3 trillion in emergency loans it made to financial institutions during the credit crisis as mandated by a revamp of US regulations. CNBC's Steve Liesman has the details.
Marc Faber is out with his latest report which discusses his outlook for stocks, bonds, commodities, gold, and the dollar. Regarding the Gold in particular Marc Faber says that he still likes goldand continues to accumulate more gold , but he says a correction to $1200 would not surprise him. Gold bull market remains intact as the majority of individual investors and institutions remain under invested.
Marc Faber:..."...I think that commodities have not only been strong recently, they have been strong for a long time, specifically precious metals. If you look at the Dow Jones in gold terms it peaked out in 1999, and is not down 84% in gold terms. In other words you can’t measure any thing any more in dollars because the function of money is to be among others a store of value and also unit of account, but if you print and print and print, the function of store of value expires or is non existent, and the unit of account doesn’t work anymore. So we need to take a new unit of account which is gold or silver and in those terms, the US economy has contracted massively since the year 2000 and the dollar has been very weak as well as the bond market and the stock market in gold terms...."
"You don't want to short it here but for the longer period the euro is going much lower," "In a year and a half or two years it's really going to be a big mess." Charles Nenner, says.
Marc Faber :..."...the terminal value of the dollar is precisely zero, the printing cost of bank note that is the intrinsic value of the dollar. But it will not move there right away. since the formation of the federal reserve, in 1913, the price of gold has gone up from USD 25/oz to over US 1400/oz, In other words the value of a dollar bill has gone down by 97% in gold terms and it took more than a 100 years. Now the next time the value of the dollar declines by 97% won’t take a 100 years I think it will happen in 10-15 years." in www.moneycontrol.com
Nov. 29 2010 | The Euro is coming down against the dollar "based on the fact that the economy in the states is much stronger than in Europe," Charles Nenner, founder and president of Charles Nenner Research, told
CNBC Monday.
Marc Faber :.."What I think its important to understand the cause of the crisis, the cause of the crisis is excessive monetary growth leading to excessive debt growth, to the Nasdaq bubble, to the housing bubble that then led to overconsumption in the US and a symptom of over consumption in the country is always growth in trade deficit that then shifts production overseas because one trade deficit in one country is offset by trade surplus somewhere else. And to simplify matters lets say it was China.
So actually, the US monetary policies have been very good for Asia, specifically for China because it fostered industrial production growth in China, employment growth, wage increases, domestic consumption, increased demand for raw materials, that then lifted commodity prices. For that actually the developing world, the emerging economies including China, India , Vietnam, Brazil and so forth should all send a thank you note to Bernanke...." Marc Faber said in a recent interview with www.moneycontrol.com
Marc Faber:" As you know I have been very critical of the Federal Reserve for the last 20 years because the Federal Reserve with its expansionary monetary policies and without the policy paying attention to excessive credit growth created first the Nasdaq bubble and later on the housing bubble and in 2008 the commodities bubble. So I have been very critical of these policies for a very long time, including of course now QE2 as I was also skeptical about the success of QE1 for the simple reason that the Federal Reserve can control the quantity of the money.
In other words, Bernanke as he said and wrote the US can drop dollar bills from helicopters onto the US, but what they don’t control is where these dollar bills will flow to, and as it happens it went into bubbles in US creating over consumption, and symptom of overconsumption was then the trade and current account deficit that shifted production and capital spending overseas and shifted economic growth to emerging economies and now QE2 what it will do is essentially it will foster bubbles, in commodities, in precious metals and in the capital markets of emerging economies where the capital will flow to." in moneycontrol.com
Marc Faber, publisher of the Gloom, Boom & Doom report, said in a phone interview 19 Nov with Bloomberg Television speaking about Chinese economy ....:"....I think we already have a property bubble but it does no mean that the whole economy will go into recession , and I will add to it eve if there is a slow down in China it is a very large country like the US was in the 19th century and still is today , so you can have some sectors of the economy going into recession and other sectors still expanding.....
The clampdown on property speculation may prompt investors to turn to the nation’s stock market, Marc Faber said. Still, shares are “fully priced” and Chinese investors may instead become big buyers of gold via ET Now
The U.S. economy "is a complete disaster, "Here are the numbers...we're broke," Davidowitz declares, noting the U.S. government goes $5 billion deeper into debt every day and is facing $1 trillion-plus annual deficits for the next decade. "In other words, we're bankrupt."
Nov. 25 2010 | Since the Fed's announcement of QE2, Mark Mobius, executive chairman of Templeton Emerging Markets Group, has noticed a tremendous amount of inflow into emerging market funds. CNBC's Jackie DeAngelis asks if he's worried about bubbles being formed.
Matt Taibbi's latest piece focuses on the Rocket Docket court set up in Jacksonville to expedite a backlog of foreclosure cases in the state of Florida.... A top Treasury Department official said Tuesday that federal investigators looking into problems with mortgage foreclosures throughout the country have found widespread and “inexcusable” breakdowns in basic controls in the foreclosure process. “These problems must be fixed,” Assistant Treasury Secretary Michael Barr told members of the Financial Stability Oversight Council, the newly formed panel of regulators responsible for identifying potential risks to the financial system
“There’s no other way out but to print money,” “In the long run, all paper money will go exactly to its intrinsic value, which is zero.” Marc Faber, the publisher of the Gloom, Boom & Doom report, said at a forum in Seoul
Marc Faber in Bloomberg : ..."We already have a property bubble in China, but that does not mean that the whole economy will go into recession. And I would add to it, that even if there is a slowdown in China, its an huge country, like the US was in the 19th century and still is, so you can have a some sectors of the economy going into recession and other sectors still expanding."
"Everybody is trading on the inside somehow or another, so this isn't particularly surprising," Taibbi says. "A lot of sources I talked to suggested this is endemic to the entire culture.""The real issue here is that it's everywhere," he says. "And the fear is there's no end to it." Taibbi, who became widely known in financial circles in 2009 when he dubbed Goldman Sachs "a vampire squid on the face of humanity," says he is not cynical by nature. "But this Wall Street stuff is overwhelming," he says. "The more you look into it, the less you see the way out. The government seems so completely helpless to do anything positive in this situation." read more>>>>
Nobel LaureateJoseph Stiglitzshares his thoughts on the importance of education for the future health of our economy, and how we should take advantage of college access non-profits in order to leverage the effect of the stimulus package.
Joseph Stiglitz, University Professor, Columbia University, Nobel Prize in Economics, 2001, spoke on "A Half Century of Changing Perspectives on Development" as part of the Williams College Center for Development Economics' 50th Anniversary, October 2010. More on the event and CDE here: http://cde.williams.edu/50th-annivers...
NEW YORK (TheStreet) -- Matt Taibbi, author of Griftopia, says America is devolving into a thieves paradise because of the actions of "vampire squids" like Goldman Sachs and former Fed Chief Alan Greenspan.
Marc Faber recently in an interview with bloomberg said that anything less than $1 trillion From Bernanke could disappoint investors and might prompt a correction in U.S. stocks. Marc Faber, managing director of Marc Faber Ltd publisher of the Gloom, Boom & Doom report, and Barron's Roundtable member, anticipates meaningful market correction in 2010. Mining and agriculture will be top performers within commodity sector.Marc Faber is currently recommending agriculture commodities, and the accumulation of precious metals although he does no roll out some correction before the end of the year before the prices shoot up in 2011
Distinguished law scholar Elizabeth Warren teaches contract law, bankruptcy, and commercial law at Harvard Law School. She is an outspoken critic of America's credit economy, which she has linked to the continuing rise in bankruptcy among the middle-class.
Professor Elizabeth WARREN + Bill MAHER US USURY [excessive interest incorporated onto any debt].
Now the NEW WORLD ORDER message goes out to the World from the US
TRICK + TRAP + SCREW everyone else = the Corporation Benefits The US Citizen in the WEAKER bargaining position is ABUSED The US Corporation is identified as the STRONGEST bargaining position. Anything for the US Corporation to BOOST PROFITS - that's OK?
In 1979 USURY LAWS OF US WERE DESTROYED. INEQUALITY OF BARGAINING POSITION Whatever happened to the Judge as Independent Arbiter?
Or is the Judiciary now the representative of the Corporation - as FREEMASON co-optee?
Has the PUBLIC OATH of the Judiciary now been compromised by the PRIVATE OATH of FREEMASONRY?
Nobel Prize winner and renowned economist Joseph Stiglitz has been very pessimistic about the global economy in the new afterword to his book Freefall.
This video explains the basic effects of inflation of the money supply. I'll be putting together a video on Hyperinflation, hopefully before it happens.
NATS - Money Counting
"A solution being offered now to get the economy back on track was to dramatically increase the money supply"
0:10 Tim Shaughnessy - Professor of Economics - Louisiana State University
"So we had the T.A.R.P. bailouts, bailouts of the financial organizations and the car companies. All of this was done through printing of money"
NATS - Money Printing
"By printing more money means that eventually there's going to be more dollars out there chasing the arguably the same amount of goods which that's the definition"
0:28 Chris Combs - Professor of Economics - Louisiana State University
"of inflation right. When you have more money chasing the same amount of goods all it's going to do is raise the price of goods"
"Which provides dollars to these organizations that need it but what does it do to the value of the dollars that are already in exsistance? Well it's going to drive the value of our dollars down"
"We're looking at the big picture, and we are saying ok, we can fix the short term problem maybe. Depends on what camp you come out of whether it will work or not. But even if it does work, and it might not work, but even if it does, the problem is inflation tomorrow"
"On the one hand you have buyers increasing their demand for goods. They say to themselves, you know this goodis going to be a lot more expensive"
1:15 Joe Salerno - Professor of Economics - Lugwig Von Mises Institute
"Three months down the road, or even a few weeks down the road. That's how fast prices are increasing. And therefore I'm going to buy it today. But if everybody starts to think that way that will drive prices up even faster and cause greater inflation and it becomes a vicious cycle. At that point you get a breakdown in the economy"
NATS - Printing Reciept
1:37 Dr. Loren Scott - Professor of Economics - Louisiana State University Baton Rouge
"I think this is a functionof the fact that suddenly the government is running, not just deficits, but enormus deficits. People were very worried the deficits increasing under George Bush and they said my gosh. Look at these defecits under George Bush. I mean the 1st year defecit under Obama is just straight through the floor. And if by any stupid decision they decide to put another stimulus package in, it will really be through the floor"
NATS - Inflating the Dollar Baloon
"The dollar keeps being inflated"
NATS - Inflating the Dollar Baloon
"We are running these hudge budget defecits that we try to pay off through increasing the money supply"
NATS - Inflating the Dollar Baloon
"And so people are seeing that fiscal policy, monetary policy doesn't seem to be very well under control in the U.S. so the attractiveness of the dollar falls because of it"
NATS - POP
"We've continued on a path of false prosperity thinking that we can bring about prosperity by creating money and having artificially low interest rates. The true path that we want to get back to os a prosperity based on the resources that we do have and the voluntary savings and credit we are capable of generating in a free market economy"
______
Teaser information prior to this PKG
Tim Shaughnessy - Professor of Economics - Louisiana State University
"If they try to fix the recession it could lead to prices rising even more because the way that the government does it is by trying to increase its own spending and everyone elses spending. Either the government will just out right buy more things itself or it will give tax cuts, stimulus check or whatever to get consumers to spend more"
Chris Combs - Professor of Economics - Louisiana State University
"What's the payoff? If we fix the problem now but then we have to pay higher prices in the future how are we better off from that"
"The increase demandfor products from government or consumers leads to prices going up. So if you have a problem where inflation is an issue and you are trying to fix a recession, you could fix the recession but you are going to get even more inflation on top of that"
Nov. 19 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, talks about the outlook for the U.S. equity market and China's economy. Faber, speaking with Deirdre Bolton on Bloomberg Television's "InsideTrack," also discusses Federal Reserve Chairman Ben S. Bernanke's speech at a European Central Bank conference in Frankfurt today. (Source: Bloomberg)
Gold is in a 2nd stage of a bull market. We will see a more rapid price appreciation than in the past years. Price target until 2015: 8000 Dollar. Price manipulation has come to an end. Gold as natural alternative to currencies. Chances of hyperinflation 100%.Gold prohibition possible.
Marc Faber : “US and European interest rates are negative in real terms, the rate of inflation is significantly higher than what governments are saying,” “You can see it when you pay for your insurance premiums, your groceries, your child’s pre-kindergarten schooling in New York there has been a loss of pricing power for most people.”
Marc Faber : ...Basically the bond market in the US has been in a bull market since 1981. In my view, the bull market ended on December 18th, 2008 when the 10 years treasury yield reached a low of 2.08% and the 30 years yield of 2.53%. But the bulls on bonds - the so-called deflationists - will maintain that bonds will continue to rally and that the 10 years yield and the 30 year yields will drop to between, say, one-one quarter per cent and two per cent.
I do not think that this will be the case because if the economy weakens again and you have deflation, that would be required to get these yields down there. You would have further massive fiscal stimulus and as a result of that, the deficit and the government’s debt go up and then the interest payments on the government debt go up. The ability of the government to pay the interest on its debt will diminish if the credit quality goes down. For that reason, I do believe that we will see new lows in interest rates.
So we had the bull market in bonds that lasted 1981 to 2008 - in other words 27 years - and now we are in a bear market for bonds that may last 20 years and bring yields to record highs that would mean on the 10 years note a yield of over 15%. .... via economictimes.indiatimes.com
Democracy NOW! - DN! - We are joined by Nobel Laureate Joseph Stiglitz - American economist and professor at Columbia University. Author of Freefall: America, Free Markets, and the Sinking of the World Economy now in paperback. As the Obama administration rejects a foreclosure moratorium and austerity protests grip Europe, we assess the state of the US and global economy with Nobel Prize-winning economist Joseph Stiglitz, author of Freefall: America, Free Markets, and the Sinking of the World Economy. Stiglitz backs calls for a foreclosure moratorium and says opponents of a new government stimulus "don't understand basic economics." On war, Stiglitz says Iraq and Afghanistan are "the first wars in America's history financed totally on the credit card." Published with written permission from democracynow.org. http://www.democracynow.org Provided to you under Democracy NOW! creative commons license. Copyright for broadcast belongs to democracynow.org, an independent non-profit user funded news media, recognized and broadcast world wide.
"Excessive liquidity and dropping dollar bills onto the United States from helicopters like Mr. Ben Bernanke suggested—the problem with that is he doesn't know where the money will flow,""In this case, the excess liquidity flows into emerging economies and precious metals, and new bubbles are building up that at some point in the future will burst.
"Then you will have another problem on your hands the way you had a problem when the Nasdaq bubble burst and the housing bubble burst."Marc Faber author and editor of The Gloom, Boom & Doom Report told CNBC last week
Troika Dialog - the conference sponsor has kindly granted me a written permission to publish this video.
For more information about The Russia Forum and original (full version) video please visit: http://2010.therussiaforum.com/news/n...
Marc Faber, editor & publisher, Gloom, Boom & Doom report joins Trading Day as a co-host. : BNN Business News Network from Canada.... November 8, 2010 : Dr. Doom Co-hosts Trading Day 11-08-10
Marc Faber :...I cannot tell you on which date the S&P will hit 950. But the case is simply that some people say the S&P will drop to 400. I have maintained since March 6, 2009 that 666 on the S&P was a major low and that we will not go below that level. This is still my view. I think a correction is still overdue, but not new lows and afterwards they will print and print and print and the equity prices will go higher. More than that, I do not know. ... via economictimes.indiatimes.com
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.
Roubini: The Fed Exit Strategy Will Be 'Treacherous'
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