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
Marc Faber:"...Yes, but we have to define tighten. If you have inflation in India and in China running up say around 10%, I don’t believe in China inflation is 4% and if you increase interest rates say from 3-4%, we still have in real terms highly negative interest rates. There hasn’t been any monetary tightening, in such we have increased interest rates. Just as the Federal Reserve, between 2003 and 2006, increased the Fed Fund Rate from 1% to 5.25%, there was never any monetary tightening because credit growth accelerated...." in www.moneycontrol.com
Jeffrey Tucker interviews Bob Murphy, author of 'Lessons for the Young Economist'. Recorded at the Ludwig von Mises Institute in Auburn, Alabama, on 19 November 2010.Bob Murphy One of my favorite living Austrian economist
Erik Hurst is the V. Duane Rath Professor of Economics and Neubauer Family Faculty Fellow at Chicago Booth. Hurst studies macroeconomic policy, consumption, time use, entrepreneurship, and household financial behavior. His research includes "Life Cycle Prices and Production" forthcoming in the American Economic Review; "Social Security and Unsecured Debt" forthcoming in the Journal of Public Economics; "Liquidity Constraints, Household Wealth, and Entrepreneurship," which appeared in the Journal of Political Economy (2004); "The Correlation in Wealth Across Generations," which appeared in Journal of Political Economy (2003); and "Home is Where the Equity Is: Mortgage Refinancing and Household Consumption," which was published in the Journal of Money, Credit and Banking (2002).
Additionally, his research on "Measuring Trends in Leisure," which appeared in the Quarterly Journal of Economics in 2007, was covered by the New York Times, the Washington Post, and the Economist. His current paper "Conspicuous Consumption and Race" explores the differential spending on status goods between black and white households.
Hurst won the 2006 TIAA-CREF Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security for his article about the transition to retirement titled "Consumption Versus Expenditure," published in the Journal of Political Economy (2005).
He was the inaugural recipient of the John Huizinga Faculty Fellowship in 2005 and was awarded the William Ladany Research Award in 2001, which is given to a junior faculty member with promising research potential. In 2006, he was named a Neubauer Faculty Fellow; the previous year he was named a Charles E. Merrill Scholar, an honor given to Chicago Booth faculty who conduct promising research in the area of policy studies. He also has received grants from the Michigan Retirement Research Center and the Department of Health and Human Services. Prior to moving to Chicago, Hurst won two teaching awards while a graduate student at the University of Michigan. Additionally, in 2008, students in the Full-Time MBA Program selected him as the recipient of the Emory Williams Award for outstanding teaching.
Hurst is a member of the Economic Fluctuations Group, Aging Group, and Public Economics Group at the National Bureau of Economic Research.
He earned a bachelor's degree in economics and finance from Clarkson University in 1993. He received a master's degree in economics in 1995 and a PhD in economics in 1999 from the University of Michigan. Hurst joined the Chicago Booth faculty in 1999.
Jan. 4 2011 | When investing in China, Mark Mobius, executive chairman at Templeton Emerging Markets Group, recommends looking at the country's oil & gas as well as consumer sectors. He shares his investment strategy for emerging markets this year with CNBC's Oriel Morrison.
Jan. 3 2011 | Chinese inflation will peak in the first-second quarter, forecasts Chi Lo, CEO at HFT Investment Management. He tells CNBC's Emily Chan that price pressures will moderate towards the end of 2011.
LONDON (Commodity Online): Global investing legend Marc Faber says exposure of investors to gold and silver compared to other commodities is very low. Therefore, price of gold and silver can go to higher levels in 2011 thanks to the low investor base for these precious metals.
Faber who is the publisher and editor of the famous Gloom, Boom, and Doom report, says gold and silver continue to be under-owned, despite the fact that the prices of these two precious metals have been zooming in the last one year.
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.” Mr Faber said.
By Nathaniel Crawford Investor extraordinaire Marc Faber is out with his latest Gloom, Boom, and Doom report, which discusses his outlook for 2011. Here are a few highlights:
1. Equity Markets–Faber believes a correction is imminent for the stock market as bullish sentiment (AAII sentiment) nears record levels and mutual fund cash positions remain very low. Furthermore, the latest upward move in stocks has occurred on declining volume, which is usually bearish from a technical point of view. The correction should occur in January. That being said, you should be buying into the correction as it represents a good buying opportunity. Faber prefers energy companies and speculative stocks such as home builders and even AIG. He goes on to say that the third year of a Presidential cycle is very good for speculative stocks versus traditional blue chip value plays. Read Full article >>>> at http://wallstreetpit.com/55289-marc-fabers-january-2011-outlook-correction-imminent
Rising fuel and food prices in India are reviving inflation fears. During the past year, the nation's food price index rose 12.13 percent. Basic vegetables are of main concern as consumers complain about being unable to afford certain dietary staples. The price of onions, for example, has risen by 350%. Up-scale restaurants have also seen a steady increase in prices these last six months, effecting their profit margins. Although they are able to absorb the price hike right now, the question that remains is: for how long? In an effort to ease the sting, India's embattled government banned onion exports and scrapped import duties. High food inflation has dislodged state governments in the past. India's Congress party that leads the ruling coalition has to come up with a solution before the partial state elections later this year. Al Jazeera's Sohail Rahman reports.
Dec. 31 2010 | Discussing the way inflation works now and market predictions for 2011, with Jason Trennert, Strategas Research Partners, and Rex Macey, Wilmington Trust.
John Williamsof Shadowstats has repeatedly warned that our economy is not doing as well as some would have you believe. From unemployment to GDP to current and future liabilities, there are fundamental problems that will not be resolved anytime soon - in fact, they're likely to get worse. The end result according to Williams? A hyperinflationary depression.
Respected Walter J. "John" Williams says govt may start giving out free toilet paper...er...money! economist John Williams, editor of ShadowStats.com, a popular website that tracks real inflation figures, is advising that people hoard physical gold as well as food items in bulk so that they have some means with which to barter as the economic crisis turns ugly.How far down the rabbit hole do you want to go? well it isn't getting better... what is it going to be like end of the year? or end of 2011?
I hope people are trying to protect them selves.. John Williams from shadowstats.com about the U3 cooked numbers from the government still reading about bank closures coming.John Williams from ShadowStats.com says buy and store scotch! Put everything you got into canned food and shotguns! And horde scotch and gold oh and buy ammo i think ammo would be a great currency in the future especially if the dollar collapses. 7.62x39 mm and 223
also get handgun ammo, and mres, lambs, pigs, goats, all can be used for barter. hell even rabbits cheap to raise and fur is worth good money.
Three or four years into the future I think we could be in a hyperinflation, within the current year youre going to see much higher inflation than most people are looking at, John 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 youll see disruption of normal commerce, you wont 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.
Williams said that such items should be procured now in bulk so people had some means with which to barter and get them through rough times.
At least as far back as April 2008, six months before the collapse of Lehman Brothers and Bear Stearns, Williams predicted that the world economy was entering a phase of hyperinflationary depression that would peak in 2010.
In a hyperinflation special report, Williams said that the U.S. was on an irreversible course of financial armageddon that would likely lead to extreme political change and/or civil unrest.
Top trends forecaster Gerald Celente has echoed Williams advice, remarking recently that putting food on the table will become a primary concern over buying gifts at Christmas.The J.P. Morgan [banking] interests and Global Bankers found it was only necessary to purchase the control of 25 of the greatest papers. ...an editor was furnished for each paper to properly supervise and EDIT information etc etc
Define HIGH TREASON America, do Police Protect Criminals Now?? G20? this is what happens when you do not include home prices in the inflation index, when you let home prices increase to high that means personal debt is really huge ie mortgages in order for people to pay off all these mortgages you have to keep increasing the money supply or face a shortage of cash to pay off these huge debts
Austerity measures are typically taken if there is a perceived threat that government cannot honor its debt liabilities. In such situations, inter-governmental institutions such as the International Monetary Fund (IMF) come in and demand austerity measures that on average have not yet been proven to be productive. Opponents argue that austerity measures depress economic growth, which ultimately causes governments to lose more money in tax revenues. In countries with already anemic economic growth, austerity can engender deflation which inflates existing debt. This can also cause the country to fall into a liquidity trap, causing credit markets to freeze up and unemployment to increase. Opponents point to cases in Ireland and Spain in which austerity measures instituted in response to financial crises in 2009 proved ineffective in combating public debt, and placing those countries at risk of defaulting. Such measures are presently being set in motion in the united states of America states such as Indiana and New Jersey, California is a likely candidate and many more will follow as the economics woe's of the United States of America come to grip, forcing many states to accept such measures that will eventually lead to the break up of the United States, Canada, and Mexico creating a IMF imposed North American state nation.
Author and filmmaker Bill Still tells http://www.FinancialSurvivalRadio.com that the bond market is headed for a major crash, with many states and cities no longer able to service their massive debt loads. So, what will that look like when the day of reckoning finally arrives?
Robert Shiller, co-creator of the index joins the Wall Street Journal and shares his perspective
. The Standard & Poors/Case-Shiller index's most recent report shows that home prices across America are declining . For economists, this is yet another unexpected sign that the economy is slowing. but this was to be expected.It's very simple... Option ARMs and Alt+A mortgages are resetting and causing more people to go into foreclosure, shadow inventory continues to pile up, long term interest rates have spiked recently, unemployment numbers continue to rise, bearishness on the overall economy continues to rise, and foreclosure-gate has decimated faith in the system. In this environment, why in the world would anyone expect anything but falling prices?
Opening remarks at the Bromsgrove Monetary Reform Conference in Bromsgrove, UK, Oct. 29, 2010. A micro-funding site for my new book, "No More National Debt". To check it out, go to KickStarter and search for Bill Still.
according to Bill Still gold money is fiat money too.Gold money is even more manipulatable by the bad guys. It's not what backs the money, it's who controls its quantity. If the bad guys want to cause a depression they just don't lend out their gold coins or their electronic equivalents.Bill Still said Bill Still recently released a documentary called "The Secret of Oz".
George Soros, Joseph Stiglitz, Elizabeth Warren, Robert Johnson, and more discuss the ramifications of financial reform - from the Make Markets Be Markets report, sponsored by the Roosevelt Institute.Video taken from the Make Markets Be Markets conference,New York City.The views expressed in this presentation are those of the speakers and do not necessarily represent the positions of the Roosevelt Institute, its officers, or its directors.
Speakers include Simon Johnson, George Soros, Michael Konczal, Joseph Stiglitz, Peter Solomon. Jim Chanos and some others.
Dec. 27 (Bloomberg) --William Black, associate professor of economics and law at the University of Missouri-Kansas City, talks about the outlook for the U.S., European and Chinese economies. Black speaks with Carol Massar on Bloomberg Television's "Fast Forward."
Nobel laureate Joseph Stiglitz and former RBI governor YV Reddy on QE2 impact on the US economy, dollar devaluation and currency wars, India's inflation problem and a whole host of other issues , in the second part : Nouriel Roubini and Raghuram Rajan on the benefits and risks of quantitative easing, the rush of funds into emerging markets and India's growth in 2011.
Marc Faber :"....All EMs have significantly outperformed the US and Japan over the last two years or so. Now with monetary conditions tightening somewhat in the world, we see interest rates going up everywhere. We could have a period of under-performance. The news about emerging economies has been very favorable. To a large extent, these favorable economic developments have already been discounted by the stock markets." via www.moneycontrol.com Dec 10, 2010
Modern economics is a subject that today's students must understand in order to protect their tomorrows. Inflation, the creation of money, and the regulation of the economy are explained. the banks in fact create money from *nothing* to a leverage ratio of 30 to 1 (and more), and then profit from the interest on the money they created from nothing! Also it's not the "governments" that create the money directly, they borrow it from private banks *at interest*. Therefore the is *no way* to "balance" our current economy by increasing money supply without getting into debt servitude to private banks.
The issue is not what money is backed by but who controls its quantity. In history GOLD was used as the ONLY money standard in order to crash the economy into a depression. It is SILVER which is the key. When gold AND silver was in circulation the money was plentiful and the economy thrived . Then when they removed the silver standard you could only buy & sell in gold. This KILLED the economy. GOLD is scarce . Remember its who controls its QUANTITY that counts !
Marc Faber :" The entire energy sector including natural gas is probably relatively attractive because the global economy could surprise on the upside. In other words, the EMs continue to grow and the oil demand continues to grow, especially out of China and India. The Europe and US stabilizes and also recovers somewhat, in which case the demand for oil will go up and drive up prices." via www.moneycontrol.com Dec 10, 2010
Milton Friedman Biography from Wikipedia :
Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist, statistician, a professor at the University of Chicago, and the recipient of the Nobel Prize in Economics. Among scholars, he is best known for his theoretical and empirical research, especially consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy.[1] He was an economic advisor to U.S. President Ronald Reagan. Over time, many governments practiced his restatement of a political philosophy that extolled the virtues of a free market economic system with little intervention by government. As a leader of the Chicago school of economics, based at the University of Chicago, he had great influence in determining the research agenda of the entire profession. Milton Friedman's works, which include many monographs, books, scholarly articles, papers, magazine columns, television programs, videos, and lectures, cover a broad range of topics of microeconomics, macroeconomics, economic history, and public policy issues. The Economist described him as "the most influential economist of the second half of the 20th century…possibly of all of it".
Speaker: Professor Joseph Stiglitz Chair: Professor David Held ,This event was recorded on 8 February 2010 in Peacock Theatre, Portugal Street ,Stiglitz lays out not only the course of the financial crisis which began in 2007, but its underlying causes, and shows why much more radical reforms are needed than are currently being contemplated if we are to avoid similar 'systemic' crises in the future. Showing why the bailout has been only marginally effective and how it could have been much more so, and outlines the enormous opportunity - not yet taken - to design a new global financial architecture.
Marc Faber : .....we have to distinguish between the stock market and the economy as you know the real economy begun a recession in late 2007 and then between September 2008 and March 2009 we fell off the cliff and then we were at the very low level of economic activity then the huge stimulus packages kicked in and the money printing kicked in in other words zero interest rates and quantitative easing by the federal reserve and also other central banks , that then stabilized the global economy and when you have car sales dropping 50 percent and more then you gonna of course have a rebound , but the question is how sustainable the rebound will be or is this rebound at the present time actually borrowed from the future , and in my sense , here I am talking about the economy that the economy in near term can recover may be the recovery will be somewhat lengthier than expect , then crack up boom because the first stimulus package in the US probably will be followed by a second one and money printing will lead to even more money printing next years so it could last say twelve to eighteen months and then we will get another set of problems rising from each government action has unintended consequences ..."....etc...
the above transcript was done manually and hence it is very approximate...
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.... " via economictimes.indiatimes.com 28 Sep, 2010
Storm clouds continue to gather, A hard rain is soon to fall.we continue to walk in the path of false prosperity using a dollar printing press
Get ready people, hard times are coming. We are about to become just another banana Republic; a second world nation.
If you have any money left at all, and while it still has value, I would invest it in these things, and in the order that I list them. You will need: guns, ammo, water, food, clothing, survival equipment, gin or whiskey (for medicinal purposes), bars of gold (if you lose your guns you can hit someone over the head, and take their guns), silver (same use as gold).
Collect as much junk as possible, you'll need it to make stuff for yourself, because there'll be no more imports from China; the world will be in chaos, you will have to fend for yourself. America has 100 trillion dollars in unfunded liabilities according to Rep. Ron Paul.
You better rethink your position.
You also, might think about investing in livestock.
Bloomnberg TV : So then - but you have a lot of your investments in Asia, Marc. Then what are you doing? Marc Faber :"...Well, as recently, but I've been lightening up. I still have positions because I don't see a lot of alternatives. I own gold and silver. And I own real estate. And I own equities. But I'm not attracted to buy US treasuries at this stage, although I have to say maybe in the very short run, say the next 10 days to two weeks, treasuries could rebound in kind of a technical rebound. But that isn't the long-term view. I think in the long run, interest rates will go up. And they'll be eventually significantly higher. In my view, the 10-years treasury note yield should be around 5 percent...." Marc Faber in Bloomberg Television Dec 09 2010
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. "
Dec. 21 2010 | Gilles Moec, senior European economist at Deutsche Bank joined CNBC on Tuesday with the Spanish parliament due to vote on the country's 2011 budget and after the country's last scheduled debt auction for 2010.
Dec. 20 2010 | Moody's warned that the tax bill could have a negative effect on US debt. Now that the bill has passed, there are some concerns US Treasurys could be downgraded. Peter Morici, a professor at U of Maryland; Rodney Anderson, author of "Credit 911"; and CNBC's Eamon Javers discusses the likelihood of that scenario.
MARC FABER : Ireland,Spain,Greece,Portugal,Belgium are the rotten apples.
Marc Faber :...I think what you need to avoid are government bonds , now can they rally for ten days , could be the case but in general you do not want to be in sovereign bonds certainly not of countries like Spain Portugal Greece Ireland Iceland and so forth because they would have to be restructured . but the problem is usually when you have bad apples in your family the whole family becomes rotten so all the European governments in my opinion will have government debt that probably will become difficult to pay off or even meet the interest payment on the government debt ......The world has over six billion people we have 1.3 billion in China one billion in India and I live in Asia , Asia has 3.6 billion people it's a growing region it's demographically young with the exception of Japan and so I have a special knowledge about Asia and therefore I also invest in Asia and I have two or three investments in Switzerland but hardly any..... On a global scale whether Ireland exists or doesn't exist even if Spain exists or doesn't exist , or Belgium exists or doesn't exist it's completely irrelevant , it's sad to think of one's self that I am completely irrelevant but that's a fact of economic life today .......
Marc Faber :"...The entire energy sector including natural gas is probably relatively attractive because the global economy could surprise on the upside. In other words, the EMs continue to grow and the oil demand continues to grow, especially out of China and India. The Europe and US stabilizes and also recovers somewhat, in which case the demand for oil will go up and drive up prices. On the other hand, if the world again goes into recession, it will be accompanied by significant geo-political tensions, in which case there could be oil interruption and oil would also rally. In either case, oil will stay high...." via moneycontrol.com
well it isn't getting better... what is it going to be like end of the year? or end of 2011?
I hope people are trying to protect them selves.. John Williams from shadowstats.com about the U3 cooked numbers from the government still reading about bank closures coming.John Williams from ShadowStats.com says buy and store scotch! Put everything you got into canned food and shotguns! And horde scotch and gold oh and buy ammo i think ammo would be a great currency in the future especially if the dollar collapses. 7.62x39 mm and 223
also get handgun ammo, and mres, lambs, pigs, goats, all can be used for barter. hell even rabbits cheap to raise and fur is worth good money.
Three or four years into the future I think we could be in a hyperinflation, within the current year youre going to see much higher inflation than most people are looking at, John 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 youll see disruption of normal commerce, you wont 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.
Williams said that such items should be procured now in bulk so people had some means with which to barter and get them through rough times.
At least as far back as April 2008, six months before the collapse of Lehman Brothers and Bear Stearns, Williams predicted that the world economy was entering a phase of hyperinflationary depression that would peak in 2010.
In a hyperinflation special report, Williams said that the U.S. was on an irreversible course of financial armageddon that would likely lead to extreme political change and/or civil unrest.
Top trends forecaster Gerald Celente has echoed Williams advice, remarking recently that putting food on the table will become a primary concern over buying gifts at Christmas.The J.P. Morgan [banking] interests and Global Bankers found it was only necessary to purchase the control of 25 of the greatest papers. ...an editor was furnished for each paper to properly supervise and EDIT information etc etc
Define HIGH TREASON America, do Police Protect Criminals Now?? G20? this is what happens when you do not include home prices in the inflation index, when you let home prices increase to high that means personal debt is really huge ie mortgages in order for people to pay off all these mortgages you have to keep increasing the money supply or face a shortage of cash to pay off these huge debts
Marc Faber: In general, emerging markets have been weak relative to the US and relative to Japan and for the next six months emerging markets (EMs) will not perform all that well."
"In India we had a market that performed superbly between March 2009 and just about three weeks ago. It was ready to come on the profit taking anyway. Now we have this profit taking phase and it will last for a while"
"We could easily in emerging economies have a correction of 20-30%." Marc Faber added
MARC FABER: "....I think increasingly, investors begin to realize that between the Republicans and the Democrats, the Republicans don't want to increase taxation, and the Democrats don't want to cut spending. And so the deficit in my opinion will stay above $1 trillion for as far as the eye can see...."
Marc Faber : "....I don't think it will double dip for now. And we live in a global economy today. And you have part of the global economy that are relatively weak, like the U.S. and Europe, although from the lows, they have recovered somewhat. But then you have other parts of the world that are still very strong, the emerging economies, in particular China and India. Now the big question is obviously what will happen to that part of the global economy because that has been driving overall economic growth in the world. And I think the Chinese economy is decelerating. And I think that next year there could be some significant disappointments. "...Marc Faber told Bloomberg on 12/9/10
an excerpt from the dialogue between Bloomberg's LIU and Doctor Marc Faber editor and publisher of the GLOOM, BOOM, AND DOOM REPORT LIU: ...So then, Marc, if you would buy into treasuries on a rebound, would you also buy into equities at all then, U.S. equities?...
MARC FABER: ...Well, I mean, U.S. equities come up reasonably well compared to emerging market equities at the present time. This is not a long-term call. But tactically, right now, I think the US market may actually outperform emerging markets. The market I like actually best is the Japanese stock market.... LIU: ...The Japanese market? Well, that's an idea. Marc, we'll have to leave it there. Good to talk with you. Marc Faber there from Thailand. ...
Marc Faber : “The Europe and US stabilizes and also recovers somewhat, in which case the demand for oil will go up and drive up prices,”
“If I look around markets, we had a very negative sentiment about the euro six months ago. Recently, we had a very negative sentiment about the US dollar. From this very low sentiment level for the US dollar where everybody hated the US dollar, in other words we can have somewhat of a recovery.” Marc Faber told India’s CNBC TV channel recently
Brazil's Rising Star As the U.S. and most of the world's countries limp along after the crippling recession, Brazil is off and running with jobs, industry, and resources. Steve Kroft reports.Lots of Ex Military Folks are moving down to Brazil by the pound to escape the upcoming collapse.
Nobel Economist Mundell: Add Renminbi to IMF Reserve
China's currency has strengthened to the stage where it is "almost de facto convertible" and should be included in the international reserve basket held by the IMF, Nobel Prize-winning economist Robert Mundell said in this interview with the HKTDC prior to his appearance at the Asian Financial Forum, 17-18 January 2011.
Marc Faber more bullish about the Asian Currencies such as the Singapore dollar than the Australian and The Canadian Dollars which are very tight to the commodities cycle and hence vulnerable to any slow down of the demand from China
Marc Faber:"...I do not think the Euro will go to parity , but can it go down another ten , fifteen percent ? ...easily I think the Eurozone will bailout Greece it will also bailout other countries like probably Spain at some stage , Portugal ...and that is obviously not favorable for the currency but this is the patern we have today we had excesses and we had misallocations of capital between 2002 and 2007 , then in 2008 we had the financial crisis a period of deliveraging sets in and then the government come in and bailed out essentially companies that failed notably in the financial sector , and of course in the US the two biggest bailouts Fannie Mae and Freddie Mac which were government sponsored enterprises and in Europe they will have to bailout countries like Greece and this is basically a monetization and it leads to a loss of purchasing power of the paper money both for the U.S. Dollar and the Euro , now I believe that all paper currencies are not desirable t they will lose value , will the Euro lose more value than the dollar ? could be for sis month and then may be the US Dollar loses more value than the Euro we'll have a kind of a shift ...In General I think that the Asian currencies are in a reasonably good position to appreciate further as the Singapore dollar has recently done , i am less optimistic about the Australian Dollar and the Canadian Dollar because they are very tight into the commodities cycle ...you know if I expect the Chinese economy to slow down or even to have some kind of bursting of the property bubble then it will affect the demand of China for industrial commodities and that will be negative for Australia and Canada .....
International investing guru Marc Faber shares his thoughts on the fate of Greece as well as his view on the euro and other major currencies. Marc Faber is less optimistic about the Aussie and the Canadian dollar but he is bullish about the Singapore Dollar
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......
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.
Jim Rogers still Bullish on Farmland in America
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Jim Rogers has always been Bullish on farmland...
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