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
Gonzalo Lira : ....there will be no buyers for these treasury issues that are going to be necessary to finance this tremendous deficit so this talk that QE2 is going to end prematurely is all baloney , there are simply no buyers , China is not buying nor is Japan which has to deal with its own problems , the only buyer out there is the Federal Reserve , Gonzalo Lira believes that when QE2 is going to end in June it is going to be somehow extended they are going to have because there simply no buyers.....we should instead cut military spending , these two wars are pointless says Gonzalo that will be real deficit reduction..
Marc Faber: ".... it depends whose misery. i mean, it would take me a very long time to go into details. but basically today, actually in the u.s., it's not an issue between democrats and republicans because this are many democrats who are well-to-do people and there are many republicans who are not so affluent. it's a question of essentially entitlements, the majority of people obviously is not particularly well to do, so they want larger and larger entitlements, transfer payments and work less. and the people that have money are the ones that usually work very hard, and they don't want to have transfer payments. so the people that have the money say that 10% of the population that is affluent in the u.s. or maybe just 5% of the population, they are outnumbered by the poor people. and therefore they have essentially no votes. so the one way to get back at the masses that all get these entitle systems to prints money and entitlements is to print money. by printing money and outsourcing production to china, you disenfranchise the working class,and by printing money then asset prices go up. could be real estate, stocks, commodities, whatever it is. and so your asset value increases dramatically, and there is wealth disparity that is increasing. ..."... it's not conspiracy. but look, if you clearly think about it, if you are well to do in the united states, you is exactly the same vote as someone who doesn't want to work, that is born illiterate. because in America close to 50% of babies are born to women that are not married. and most of them are actually poor. so w what kind of education these people will get? you have to ask yourself. they have the same vote than someone who has, say, influence, and affluence and has worked very hard all his life. these guys who worked very hard to say to themselves has the system is cheating us. we're going to cheat the system, as well. "...."it's a ver complex issue."
" what i really wanted to say is the tragedy is that the system has become dysfunctional. and the other day cnbc interviewed Mike Steinhart. he said it exactly the way it is. he said we're not living in the America that America used to be. some think changed along the way. and everybody wants to rip off the system. and that leads then to essentially and has also been encouraged by money printing. but basically the well-to-do people in America, they benefit from money printing, as well as elsewhere in the world because they can shift their assets overseas. the ordinary man doesn't have that potential."
Only the Federal Reserve does not acknowledge the existence of Inflation , In Gold and Silver Terms the Dow Jones over the last ten years has already lost over more than 80% of its value says Dr. Marc Faber, Gold is not in a bubble matter of fact it is cheaper today than it was in 1999 when it was at $252
Marc Faber : "....well, i think that asset markets move up and down, and they go from a rising face into a boom phase and into collapse and then people are gloomy. and there is gloom and doom around, and then the market bottom out. and then the whole process starts again. so i think as an investor you have to realize occasionally markets are overvalued, and occasionally they're undervalued. "
"well, i think in general if you have sound money, then money's a medium of exchange, unit of account, and the store of value. but if you read, say, what Janet yellin said, she's now vice chairman of the fed, that if it were possible to take interest rates into negative territory, i would be voting for that. it means that the fed will keep interest rates below the rate of cost of living increases essentially for as far as the eye can see. and in that environment, obviously cash and bonds are dangerous. they have to move into asset classes like equities, commodities, real estate, art, collectibles, anything that essentially cannot be multiplied at the same rate as paper money. that is subject to the printing presses of mr. bernanke. "
" not at all because between june, 2004, and august, 2006, the fed increased the fund rate to 5.25%. there was never monetary tightening occurring because the cost of living increases and nominal gdp was increasing at the faster rate. the absolute level of rates doesn't tell you whether there's tightening. in china they've increased interest rates several times. but with inflation running at, say, between 8% and 10% per annum and the deposit rate at 3.25%, money is losing its purchasing power if you keep it on deposit. so i think in the u.s. you will have a similar process. one day they'll increase it by a quarter percent. but what i mean, when commodity prices are going through the roof, energy prices are going up. health care cost are going up. insurance premiums are going up. everything is going up. only at the federal reserve is there no inflation. it's a bitter situation".
" ...In Gold and Silver Terms the dow jones over the last ten years has already lost over more than 80% of its value. and yesterday, my friend frank holmes was on cnbc, and i don't know remember if it was you or somebody else, but the two interviews were kind of ridiculing him, telling him that gold was a bubble and so forth. i just came now from a conference. there were over 200 people here in Singapore. i asked the audiences, fund managers, you would imagine that they are intelligent. i asked them who of you has personally more than 5% of their assets in gold. not one person lifted their hand. not one. if it were a bubble, a lot of people would have gold. the whole world would be trading gold 24 hours a day. but i don't think it's really a bubble. i think maybe gold is cheaper today than it was in 1999 when it was at $252. "
Dr. Marc Fabereditor and publisher of the gloom boom and doom report was a guest to Goldseek radio on April 06 2011 , he says that the FED may eventually announce QE3 but not right away in June when the QE2 ends , the inflation rate in the US is much higher than what he government is publishing ...Gas price are still depressed , Gold may see a correction at some point...Gold is not in a bubble it is rather under owned by most investors ...
Marc Faber :" ...My feeling is the FED it will complete QE2 , in June it will be finished and that after it they will be waiting to see how the bonds market reacts to less purchases or no more purchases of the treasury bonds by the FED , because it's not evident that the bonds market will necessarily go down because of the withdraw of QE2 because last April in April 2010 we had the end of QE1 and after that the bonds market actually rallied until August so the FED may not immediately announce QE3 but I think eventually it will happen , and concerning rates they will make sure that the FED fund rate stay below the rate of inflation and as you know the rate of inflation in the US is much higher than what the government is publishing "
Joseph Stiglitz : 1 Percent of the US takes the Income of 25 Percent " the point is that there has been this growing inequality not only in income but actually inequality of wealth is even much greater , there is a shrinking of opportunity it's not just that the people on the top are getting richer , if they were getting richer because they were contributing more to our society and everybody else was doing well that will be one thing but actually they are gaining and everybody else is decreasing in fact right now it is not just the bottom but even the middle , the median income half above half below are poorer today than they were half a decade ago , so all the growth that has occurred in our country in the last decade or more has gone to the upper 1 , 2 percent at the same time there is really shrinking opportunity ...."
Economist Paul Krugman explaining QE2 Quantitative Easing 2 at Haverford College speaking event.
"...I was asked what's the FED is doing when it goes out and buys long term bonds , so what it is really doing is buying long term bonds and selling short term bonds , it is using bank reserves which are in effect short term claims on the US Government , or in some cases it is actually selling off it's holding on short term treasuries to buy long term bonds , meanwhile there is the treasury setting out there that is having a bunch of debt some of it long term debt , in effect the federal reserve is building up that short term debt and paying down some of the long term debt , so what's happening is QE2 is basically a reduction of the maturity of federal government debt and I think it works out as something like ten months of the maturity the average maturity of the federal government debt ...."
Well known economic bear David Rosenberg, chief economist at Gluskin Sheff & Associates, David believe that the real unemployment rate is actually closer to 12 percent than 9 per cent , the rising consumer spending is mostly due to the rising inflation in food and fuel , David believes that there are great chances that the FED will announce a QE3 may be this sumer or in a year from now....
“When it comes to the stock market as an asset class, in the past two years, there has been an eighty eight percent correlation between the movements in the Feds balance sheet and the direction of the S&P 500.” So, will the Fed inflate the money supply in perpetuity? This could be ugly. I know that I am not going to get on the wrong side of this bubble!
Nobel Laureate Joseph Stiglitz is for a full employment as an "entitlement" and a government responsibility for the workers , :" ...we need social protection ,... workers eventually can't control the economic environment , you know in the old economy , agricultural economy you could work your field you're still buffeted by vagaries and the weather international prices but you can always get a job because you could always work your own field , but in a modern economy if firms are firing you have no choice there are very limited opportunities that the individual has , so it is the responsibility of the state the government to maintain the economy and ful employment and we recognize that ion the Full employment act of 1946 unfortunately we are not living up to the commitment we made in 1946 to maintain the economy and the full employment , we have one out of six workers that are unemployed and increasingly large number are unemployed right now for over six months ..."
Rick Santelli reacts to The Fed Chairman Ben Bernanke speech last night in Stone Mountain, Georgia. where Ben Bernanke downplays the inflation fears , Bernanke said he believes the :..."...the inflation increase will be transitory then it will pass and go back to a point of inflation that is consistent with our price stability mandate. and that being said, we have to monitor inflation. inflation expectations extremely closely because if my assumptions prove not to be correct, we would certainly have to respond to that and ensure that we maintain price stability in the united states." Ben Bernanke said , Rick Santelli does not agree and says the debate will continue....Rick Santelli. He is the brave one standing, saying "the emperor has no clothes"
Mark Mobius, executive chairman, Templeton Emerging Markets Group, discusses with CNBC his investment strategy : Mark Mobiussaid that a good investment strategy is not to look at what happens today but at what is likely to happen in five years. Stocks are a relatively safe place to be as inflation fears mount : "As you know, equities are one of the few investments that you can make that are going to adjust to inflation," he said "There's always inflation. No currency will hold its value. Not even the Swiss franc " he added.
Marc Faber says that Real estate is a bargain now in the US it may not go up in value but it will at least preserve its value, but not in China and Hong Kong where a possible real estate bubble is developing
"…if you can find a house you like, it may not be a bad time to buy a house in the U.S. It may not go up in value, but it may preserve its value...." Marc Faber said recently
Marc Faber : "....I would just like to say about the insider selling, this is also something that I follow and that concerns me. But having said that, and being on the boards of different companies, let me explain to you what happens. Let’s say I am on the board of a company and I get stock options, and I exercise the stock options and then to diversify, I may sell some of the shares I own in that company through my stock option plan, and then I may go and buy other stocks in the market, or make other investments.Because of the proliferation of option plans in the last twenty years or so, there is a natural tendency that when a CEO sells shares, it is reported, but when he invests with hedge fund management, or buys shares in other companies, it is not reported. I think there has been a change in the validity of this statistic. But I agree with you, at the present, the ratio is so huge between selling and buying, that it is a rather negative indicator. Then, when you combine that with other indicators that are also negative, a hugely over-bought market, for instance, I think some caution is in order..." in a radio interview with MacAlavany
Marc Faber, publisher of the Gloom, Boom & Doom talks to Bloomberg March 30 Marc Faber, publisher of the Gloom, Boom & Doom report is in Mexico City to speak at an event entitled "When everything else fails policy makers can always be assured of immortality by making spectacular errors " Marc Faber says to expect QE3 from the FED but not right away , regarding the spectacular errors of policy makers Dr. Marc Faber had this to say : " ...well I think the big error is obviously to print money , I think it does not help in the long run , it can give a temporary boost to economic activity but it does not lead to sustained economic growth in fact it creates a miss-prizing of assets and of goods and services and has negative implications on the prize mechanism in other words say you print money that can be done but the central bank or in the case of the US the Federal reserve what it can't know is where the money will flow to , so it flowed to NASDAQ stocks before march 2000 and into the housing market and created a bubble and in 2008 as the economy went into recession we had a commodities bubble , oil went from the day they cut interest rates in September 2007 to July 2009 all the way from $78 to $147 which was like an additional tax on the US consumer to the tune of 5 billion dollars and lately the money printing in the US hasn't really helped much the assets that the FED would like to boost namely housing but it created other bubbles overseas in currencies and again in commodities to some extent " ...regarding QE3 Marc Faber says :" for sure there will be QE3 but not right away , I think the FED believes that the economy is recovering and some sectors of the economy are actually doing quite well overseas we have strong growth in particular in emerging economies like here in Mexico the economy is doing very well at present time , so I think they will do QE3 , and my view is they will do QE3 , QE4 QE5 until QE26 until the whole system breaks down , and obviously the question is how fast they will do and to what extent the stock market has already expected this QE3 or the end of QE2 , as is QE2 is now fully discounted I do not think that the market will go up significantly , in fact I think that the FED would like to see stocks correcting somewhat ahd then have an excuse if stocks are down 20 percent that we need QE3 ..."
Marc Faber, publisher of the Gloom, Boom & Doom report is in Mexico City to speak at an event entitled "When everything else fails policy makers can always be assured of immortality by making spectacular errors " Marc Faber says to expect QE3 from the FED but not right away , regarding the spectacular errors of policy makers Dr. Marc Faber had this to say : " ...well I think the big error is obviously to print money , I think it does not help in the long run , it can give a temporary boost to economic activity but it does not lead to sustained economic growth in fact it creates a miss-prizing of assets and of goods and services and has negative implications on the prize mechanism in other words say you print money that can be done but the central bank or in the case of the US the Federal reserve what it can't know is where the money will flow to , so it flowed to NASDAQ stocks before march 2000 and into the housing market and created a bubble and in 2008 as the economy went into recession we had a commodities bubble , oil went from the day they cut interest rates in September 2007 to July 2009 all the way from $78 to $147 which was like an additional tax on the US consumer to the tune of 5 billion dollars and lately the money printing in the US hasn't really helped much the assets that the FED would like to boost namely housing but it created other bubbles overseas in currencies and again in commodities to some extent " ...regarding QE3 Marc Faber says :" for sure there will be QE3 but not right away , I think the FED believes that the economy is recovering and some sectors of the economy are actually doing quite well overseas we have strong growth in particular in emerging economies like here in Mexico the economy is doing very well at present time , so I think they will do QE3 , and my view is they will do QE3 , QE4 QE5 until QE26 until the whole system breaks down , and obviously the question is how fast they will do and to what extent the stock market has already expected this QE3 or the end of QE2 , as is QE2 is now fully discounted I do not think that the market will go up significantly , in fact I think that the FED would like to see stocks correcting somewhat ahd then have an excuse if stocks are down 20 percent that we need QE3 ..." The above partial script was done manually by the owner of this blog , so it is far from being perfect , use at your own risk...
Marc Faber : " First of all, I think that gold and silver will move in the same direction, but as I tried to explain earlier on, when you print money, essentially, everything goes up, but at different times, and with different intensities. In a bull market, usually, toward the tail end of the bull market, silver tends to grossly outperform gold. So, yes, maybe it will outperform gold, but I stick to gold because my safe deposit box is not large enough to put enough silver in it, whereas, it is large enough to put enough gold in it.Different people have different takes on this, and my friend Eric Sprott, who knows the silver and gold markets extremely well, thinks that silver will go ballistic. Yes, maybe that is true, but I do not think that silver will go up alone, without gold also moving. The direction will be same. Concerning China, yes, I suppose that silver would have a larger industrial component than gold, but as I pointed out, if China collapses and there is a huge deflationary scare, I suppose that it is the real industrial commodities, like copper and nickel and so forth, would be more vulnerable than gold and silver " Dr.Marc Faber in a recent interview with radio host MacAlavany
Marc Faber : “I think asset markets have begun a correction. We peaked out on the S&P on February 18th at 1344 and usually in April we have seasonal strength but I think it’s likely that the S&P will not be able to make a new high and then we will have a more significant setback in May, June. I think the Euro, contrary to expectations has rallied. I think what we could see in the next few months a rebound of the U.S. Dollar, weakness in asset markets, correction in commodities, and maybe a rebound in U.S. bonds. We live in very volatile times; a correction could be 10%, 20%. I would on any weakness accumulate gold.” in Fox Business News
"...what is happening i the middle east is of course friendly for Gold and friendly for Oil and other commodities , I mean the mess in the middle east will only increase over time nothing has been solved , in Libya we have basically a civil war not necessarily about democracy , there is one group of people that wants to oust Ghaddafi , may be rightly so , but all these things are basically indicating including the earthquake in Japan that central banks will continue to pursue expansionary monetary policies , they keep interest rates artificially low and that boots obviously equities and also commodities " Dr. Marc Faber told Fox Business News recently
Marc Faber : ...basically what is happening i the middle east is of course friendly for Gold and friendly for Oil and other commodities , I mean the mess in the middle east will only increase over time nothing has been solved , in Libya we have basically a civil war not necessarily about democracy , there is one group of people that wants to oust Ghaddafi , may be rightly so , but all these things are basically indicating including the earthquake in Japan that central banks will continue to pursue expansionary monetary policies , they keep interest rates artificially low and that boots obviously equities and also commodities " and when asked how comes he turned bullish on Japan , Dr Marc Faber answes
"...well I think after this kind of twenty years bear market in Japan the valuation is low and he key to the performance of Japanese shares is that the Japanese bond market becomes unattractive and that the Yen over time weaken I think that as a result of the reconstruction work that may cost up to $300 billion U.S. dollars that obviously the government will have to monetize, will push money into equities. I think Japanese shares are worthwhile to accumulate , having said that I think that asset markets are beginning or have have begun a correction. We peaked out on the S&P on February 18th at 1344 and usually in April we have seasonal strength but I think it’s likely that the S&P will not be able to make a new high and then we will have a more significant setback in May, June." " well I think it will be difficult for the S&P to make a new high above the previous high of 1344 wich was reached on February 18th and thereafter I think the correction will continue , I mean a lot of stocks are already down 20% important stocks and also precious metals too , in my opinion they are moving up but they're not acting all that well " regarding what's happening in Europe Dr. Marc Faber answers " Well I think the Euro, contrary to expectations has rallied. I think what we could see in the next few months a rebound of the U.S. Dollar, weakness in asset markets,in equities and also a correction in commodities, and maybe a rebound in U.S. treasury bonds. We live in very volatile times; a correction could be 10%, 20%. I would on any weakness accumulate gold because as long as you have the central banks that print money the longer term outlook for gold is favorable"
The above transcript was done manually by the owner of this blog hence it is far from from being perfect , use at your own risk...
Marc Faber still Bullish on Wheat orange juice and sugar ;in fact this is what he told ET Now in a recent interview when he was asked about these three commodities ; Marc Faber :"Yes, I still like these commodities, but because they moved up so strongly, I would be a little bit careful about mortgaging my house and buying all these commodities. They will continue to move higher, but corrections can occur. What disturbs me is this kind of universal belief that you have to be in commodities, you have to be in precious metals, you have to be in equities and not in cash because governments - in others words central banks - will keep on printing money and the value of paper money will go down. I agree with that but as I pointed out, we can still get meaningful corrections as occurred in 2008." in ET Now
Marc Faber on FOX Business News 03-24-11
Dr Marc Faber spoke with Fox Business Network about the war in Libya the situation in the middle east and the aftermath of the Japanese earthquake , the implications on the commodities markets and the overall global economic situation
Marc Faber : ...basically what is happening i the middle east is of course friendly for Gold and friendly for Oil and other commodities , I mean the mess in the middle east will only increase over time nothing has been solved , in Libya we have basically a civil war not necessarily about democracy , there is one group of people that wants to oust Ghaddafi , may be rightly so , but all these things are basically indicating including the earthquake in Japan that central banks will continue to pursue expansionary monetary policies , they keep interest rates artificially low and that boots obviously equities and also commodities " and when asked how comes he turned bullish on Japan , Dr Marc Faber answes
"...well I think after this kind of twenty years bear market in Japan the valuation is low and he key to the performance of Japanese shares is that the Japanese bond market becomes unattractive and that the Yen over time weaken I think that as a result of the reconstruction work that may cost up to $300 billion U.S. dollars that obviously the government will have to monetize, will push money into equities. I think Japanese shares are worthwhile to accumulate , having said that I think that asset markets are beginning or have have begun a correction. We peaked out on the S&P on February 18th at 1344 and usually in April we have seasonal strength but I think it’s likely that the S&P will not be able to make a new high and then we will have a more significant setback in May, June." " well I think it will be difficult for the S&P to make a new high above the previous high of 1344 wich was reached on February 18th and thereafter I think the correction will continue , I mean a lot of stocks are already down 20% important stocks and also precious metals too , in my opinion they are moving up but they're not acting all that well " regarding what's happening in Europe Dr. Marc Faber answers " Well I think the Euro, contrary to expectations has rallied. I think what we could see in the next few months a rebound of the U.S. Dollar, weakness in asset markets,in equities and also a correction in commodities, and maybe a rebound in U.S. treasury bonds. We live in very volatile times; a correction could be 10%, 20%. I would on any weakness accumulate gold because as long as you have the central banks that print money the longer term outlook for gold is favorable"
The above transcript was done manually by the owner of this blog hence it is far from from being perfect , use at your own risk...
Marc Faber : Correct. But you understand, you are not really helping the economy, you are impoverishing, let’s say, the honest people who are decent, who have deposits, who save money and keep it in the banking system, who simply do not want to speculate. So, it is a tax on people’s savings, and it is a very vicious tax, because it is not so obvious to them, but it will become obvious one day, when with their money they can buy less and less. In other words, the purchasing power of money goes down. That is why I am telling everyone, if you already own cash, consider gold and silver to be a component of your cash portfolio, and own some of it, because the government can appropriate it, but otherwise they cannot fiddle around with it in terms of increasing the supply. in a radio interview with MacAlavany
Marc Faber : “The annual cost of living increases are more than 5% today and the Bureau of Labor Statistics is continuously lying about the inflation rate, including Mr. Bernanke. He’s a liar. Inflation is much higher than what they publish.I think that inflation is between 5% and 8% per annum in the US, and in Western Europe, a little bit lower, also 4-5% per annum.”..Marc Faber estimates that inflation in the US was currently Is Running Up To 8 per cent , and between 4 and 5 per cent in Europe. Marc Faber believes that Pakistan may be the next to fall into chaos after Tunisia and Egypt :
"You may not have a problem in Saudi Arabia and in the Emirates, in Kuwait and Qatar, because there the governments can heavily subsidize food if they want to. But I am worried that what has happened in Egypt will happen in Pakistan... I think Egypt is a reminder to people that politics, and social events, and geopolitics have a meaningful effect on asset markets. The developed markets have way outperformed, and now I think that it may be a wake up call that the US outperforms emerging economies for a while." in CNBC
Legendary investor Marc Faber author editor and publisher the Gloom, Boom & Doom Report interviewed by Yahoo Finance TechTicker on Mar 16, 2011 , Marc Faber called the sell-off in global markets a "lifetime buying opportunity" in Japan. , Marc Faber is ultra bullish on Japan despite the quake the Tsunami and the recent nuclear incident ...
Marc Faber : If people can't live with 20% , 30% correction then they should stay in bad and don't even get up in the morning , I think probably in Japan we are at a life time buying opportunity , what a life time time buying opportunity means that the market then go up say a 100 or 200 percent over a number of years and before it happens the market can also go down for another 10 , 15 percent , it's like natural gas , natural gas is very cheap before it goes up it can drop I do not know another 20 percent ..."
Marc Faber : I think they (The FED) do not necessarily want to support the bond market, because the debt issuance is so huge, they almost have to monetize part of the debt. I have read Treasury reports in 2010 by Tim Geithner saying the U.S. government debt increased by more than2 trillion dollars during that period of time. The deficit, in my opinion, mathematically,cannot come down, because 80% of the budget is mandatory expenditures, in other words, you cannot cut them. Legally, they have to be met.Of the remaining 20%, you can cut a little bit, but not that much, because then services collapse. In my view, the fiscal deficit of the U.S. will stay around 1½ trillion dollars for as far as the eye can see, and maybe even go to 2, or 2½ trillion dollars, and then the interest expenditures on the debt go up. So actually, over time, in my view, unless taxes are increased significantly, and spending is cut significantly, not by a little bit here, a little bit there, the budget will never again be balanced, and that will then necessitate, in time, QE-III, QE-IV, and QE-V. Taxes cannot be increased dramatically, because if you increase them very substantially, we will go straight back into a recession..." in a recent interview with radio host MacAlavany
Marc Faber :"Each commodity is differently placed. In general, the price of natural gas is cheap while cotton price is on the high side. Grains will move according to supply issues. If the floods or droughts continue, then we will face disruption and prices could go higher. The asset markets are quite extended and the period of consolidation or serious correction could unfold." in moneycontrol.com
Marc Faber : We have to distinguish, in a country like India and Vietnam where GDP per capita is, say, a US$1000 a year, food and energy are much more important components of personal disposable income than in countries like the US and Europe where it is just a relatively small portion. So, in an inflationary environment, especially for food, energy and commodities, emerging economies suffer for more than the developed economies. "
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. " in a recent Interview with the Indian TV ET Now
Marc Faber : Ben Bernanke knows only how to print Money
Marc Faber : "....In a money-printing environment, it is very difficult to know what is actually cheap and what is expensive. Is the price of wheat high, or is it low? Inflation-adjusted,it is extremely low. In nominal terms, it is relatively high. I believe that, in March 2009when the S&P was at 666, the market was actually much cheaper than is generally perceived, because of the money-printing, and I do not anticipate that we will see 666 on the S&P again, in nominal terms.In other words, they are going to print so much money that the S&P could be at, perhaps,2000, but in real terms, it could be down below the lows of March 6, 2009. Maybe in gold terms, we could one day reach a ratio of Dow Jones to gold of 1-to-1, as we were in1980. In other words, the Dow could be perhaps at 10,000 or 12,000, and gold could beat the same level.That is why I am advising people to accumulate gold. Can gold have a correction? Yes,there has been a little bit too much euphoria about gold, and we may have a correction,but I do not think we are in a bubble in the price of gold. In fact, I could make a case that gold, at this level of $1400 an ounce, is cheaper than in 1999, when I look at the unfunded liability growth of the U.S., at the credit growth of the U.S., and at the
household growth, and at the money printing, and at all the wealth creation that happens in China and Russia.Just consider, when I started to work in the 1970s, it was said there were two billionaires in the world. One was Rockefeller, and the other one was Mr. Ludwig. Then in 1980there were, I think, six or eight billionaires. Now you have thousands of billionaires.The paper money has become of lower value, and in that environment, it is conceivable that actually stocks do not go down a lot, in nominal terms, but they go down inflation-adjusted, and not inflation-adjusted by what the government is publishing, but in inflation-adjusted terms, as John Williams points out. He says inflation is running at 8% per annum. I have it slightly lower, depending also on the household, whether you have children, or no children, and where you live, but I would say between 5-10% in America is probably a realistic figure, and between 8-12% in countries like India, China, VietNam..."
Marc Faber : I think that there will be some decoupling, and whenever you look at the markets,different sectors perform differently, but generally speaking, in the same direction. So if someone were to take a very bearish view about emerging stock markets, I do not think he should go into European stocks or U.S. stocks. I take a more balanced view. I think we are in a money-printing environment. If something happens in China, they will print even more than the U.S. prints. If something in happens in Europe, they will also print money. They are going to print money everywhere, and with interest rates, essentially on short-term deposits, being zero, or below zero, inflation-adjusted, in other words, if inflation rates everywhere in the world are higher than the interest rates on short-term deposits, I
think, for the investor, the question is really, “How do I invest my money for the long-term?” I think that you cannot make a very bullish case for stocks, but I think you can make a more bullish, or more positive, case for stocks than say, for U.S. government bonds,because the specifics in the U.S. will stay very high, and the quality of the banks will diminish and the interest payments as a percent of tax revenues will go up, and so forth.So whether you believe in, let’s say, an economic recovery and world growth, or if you believe in disaster, in either case you are probably better off in equities than in bonds.In terms of returns, I agree with you, I do not think that the returns will be fantastic, but if you print money it is very difficult to say what the returns will be, because it is not stocks that adjust on the downside, but it is the currency that adjusts on the downside. So in theory, it is possible that the Dow could double if you print money, or it could even go up10 times, depending on how much money you print, and with Mr. Bernanke at the Fed, I think it is quite likely that a lot of money will be printed "
Marc Faber in a recent interview with Radio Host MacAlavany
"I think Mr. Bernanke doesn't know much about the global economy but he probably watches the S&P every day," "Until very recently the Feds have had very few critiques, very few people criticized the Fed's policies under Mr. Greenspan and Mr. Bernanke," Marc Faber told CNBC yesterday "Over the last few months, a lot of critical comments have come up about the Fed and its money-printing habit. The S&P drops 20 percent (and) all the critics will be silent and they will all applaud new money-printing." Marc Faber said when he was interviewed on the phone by CNBC on the 15 March 2011 he spoke about the Japanes Quake its implication on the Yen the JGBs and the Japanese Equities and commodities he also said that the S&P Standard & Poor's 500 is likely to to drop as much as 15 percent and that Fed Chairman Ben Bernanke will likely to bring QE 2 , QE 4, QE 5, QE 6, QE 7 and up to QE 18
Marc Faber was interviewed on the phone by CNBC today 15 March 2011 he spoke about the Japanes Quake its implication on the Yen the JGBs and the Japanese Equities and commodities he also said that the S&P Standard & Poor's 500 is likely to to drop as much as 15 percent and that Fed Chairman Ben Bernanke will likely to bring QE 2 , QE 4, QE 5, QE 6, QE 7 and up to QE 18
Marc Faber :..."... first of all I think that all stock markets and commodity markets were due for a meaningful correction because we have doubled or more than doubled since March 2009 , so any kind of event was likely to trigger a more meaningful correction and I think that this is an event that is most unfortunate but obviously it is a catalyst of a global correction in asset market in particular obviously in Japan , now as an investor of course it's a human tragedy and as an economist you have to say OK we have essentially destruction in Japan we should necessitate very heavy spending reconstruction expenditure that will be somewhat inflationary for the Japanese economy , and somewhat positive for equities and and certainly negative for JGBs , and in my opinion in the long run very negative for the yen , can the yen as a reaction , because everybody says Oh the Japanese were patriots and the yen will strengthen so may be the yen will go up first a little , but I think this is a kind of a turning point for the Yen and that the Yen will weaken that the JGBs will weaken and that equities will go up ...and purely as an economist investor I would say This huge selloff is an investment opportunity in Japanese equities, but if a meltdown occurs then all bets are off,that is the big question "" If a real nuclear meltdown occur then the devastation could be just mind bugling " the above partial transcript was done manually by the owner of this blog and hence it is far from being perfect or accurate use at your own risk...
Dr. Doom Marc Faber told CNBC this morning that he expects weakness to persist and the Standard & Poor's 500 to drop as much as 15 percent and then the FED's chairman will do what he does best printing money and purchasing US treasuries , we will have up to QE 18 Marc Faber says ironically : "We may drop 10 to 15 percent. Then QE 2 will come, (then) QE 4, QE 5, QE 6, QE 7—whatever you want. The money printer will continue to print, that I'm sure," said the author of the Gloom, Boom and Doom Report. Later in the interview, he added, "Actually I made a mistake. I meant to say QE 18."
Marc Faber spoke today to CNBC about the Impact of the Japan Tsunami on the Global Economy among other subjects : "This huge selloff is an investment opportunity in Japanese equities, but if a meltdown occurs then all bets are off," Dr. Marc Faber told CNBC today
Marc Faber in a recent interview with Radio Host MacAlavany said :We didn’t have a decent run, we had a fantastic run. The S&P has doubled, and in emerging markets we have price increases that are far better than a doubling of the indices. In general, emerging economy stock markets since 2003 have way outperformed the S&P. So we had unbelievable moves in markets. In the U.S. we only had on two previous occasions a move such as we had in the last 27 months from 666 on the S&P to over 1300, and that was in 1934, coming off a major low when the market had declined by 90% between 1929 and 1932, and then another move into between 1934 and 1937,and that was then followed by renewed extreme weakness in the markets.So stocks have done fantastically well, and I was fortunate to be relatively positive about equities between October 2008 and March 2009.But if someone had asked me, “Do you think the S&P will double?” I would not have expected a doubling.
I would have thought the market would rebound, maybe by 40-50%, but not a doubling.The markets in the world, between March 2009 and today, have done actually much better than anybody had expected. Starting in November 2010, the American market started to weaken, and I think that we have just begun a more significant correction in theU.S., whereby I expect the fact that international investors over-weighted the American economic stock market until recently, and under-weighted the U.S., and now money is flowing back into the U.S. I think emerging stock markets will go down further, but I would probably just stay out of the U.S...."
Marc Faber : I think that there will be some decoupling, and whenever you look at the markets,different sectors perform differently, but generally speaking, in the same direction. So if someone were to take a very bearish view about emerging stock markets, I do not think he should go into European stocks or U.S. stocks. I take a more balanced view. I think we are in a money-printing environment. If something happens in China, they will print even more than the U.S. prints. If something in happens in Europe, they will also print money. They are going to print money everywhere, and with interest rates, essentially on short-term deposits, being zero, or below zero, inflation-adjusted, in other words, if inflation rates everywhere in the world are higher than the interest rates on short-term deposits, I think, for the investor, the question is really, “How do I invest my money for the long - term?” I think that you cannot make a very bullish case for stocks, but I think you can make a more bullish, or more positive, case for stocks than say, for U.S. government bonds,because the specifics in the U.S. will stay very high, and the quality of the banks will diminish and the interest payments as a percent of tax revenues will go up, and so forth. So whether you believe in, let’s say, an economic recovery and world growth, or if you believe in disaster, in either case you are probably better off in equities than in bonds.In terms of returns, I agree with you, I do not think that the returns will be fantastic, but if you print money it is very difficult to say what the returns will be, because it is not stocks that adjust on the downside, but it is the currency that adjusts on the downside. So in theory, it is possible that the Dow could double if you print money, or it could even go up10 times, depending on how much money you print, and with Mr. Bernanke at the Fed, I think it is quite likely that a lot of money will be printed...." in a recent interview with McAlvany
Bill Gross, who runs the world's biggest bond fund at Pacific Investment Management Co., discusses the outlook for the U.S.'s AAA credit rating. Gross, speaking from Newport Beach, California, with Margaret Brennan on Bloomberg Television's "InBusiness," also talks about the 8.9-magnitude earthquake that struck Japan and the Federal Reserve's quantitative easing.
March 11 2011 Bloomberg
Pimco's Bill Gross appeared on Bloomberg Television's "InBusiness with Margaret Brennan" this morning to discuss the earthquake in Japan and its effect on his global outlook as well as U.S. Treasuries and the Fed's overall progress
Marc Faber : .."... I would say, let’s take a very bearish scenario, assuming there is a collapse in the Chinese economy, which is not necessarily my prediction, but some people say there is a horrendous bubble. I agree, if we define a bubble as artificially low interest rates, and excessive credit growth, then we have a colossal bubble in China. But it may go on for another 2-3 years. But let’s say it breaks one day.Then it will have a very negative impact on the demand for industrial commodities. And we may get, at some stage, in some sectors of the economy, the risk of deflation. In other words, the demand for industrial commodities could, for a year or two, decline, and so, obviously, the price of copper, and of nickel, and also, to some extent, oil– although this would depend very much on political developments– would go down.In that environment, there will be more money-printing. If the S&P drops 20%, all the people that are now criticizing Mr. Bernanke for QE-II will go back to their old pattern, as they have done between 1980 and 2007, to encourage the Fed to print money, because they all benefited from rising asset prices. But as soon as the S&P drops 20%, the American policy-makers will all again be for further monetary policy measures and further fiscal measures.At that time, obviously, you could end up with a global economy that is very weak, but where prices go up for certain commodities, such as gold and silver.They don’t go down because of an oversupply situation, but they move because they are a safe currency.They become the proper unit of account. In all hyper-inflation economies, eventually people give up their own currencies as a unit of account.If you had gone to Zimbabwe during their hyper-inflation, or if you had gone to Germany during their hyper-inflation, or Mexico during their hyper-inflation, nobody in those countries calculated prices anymore in their domestic currency, it was all then becoming a dollar standard, or gold standard. That is why I think that people should have some of their money in gold and silver...." in a recent interview with McAlvany
March 10 (Bloomberg) -- Charles Nenner, founder of the Charles Nenner Research Center, talks about the outlook for the euro and oil prices. Nenner spoke March 8 with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg)
Massive conflict will prompt stock market collapse, predicts cycle strategist Charles Nenner
cycle forecaster Charles Nenner told Fox Business network yesterday that the Dow Jones was set to collapse to the 5,000 level on the back of a "major war" that will shake the globe at the end of 2012 ,Nenner, a former technical analyst for Goldman Sachs, is head of the Charles Nenner Research Center ,"I told my clients and pension funds and big firms and hedge funds to almost go out of the market, almost totally out of the market," Nenner said
Charles Nenner : Crude and Other Commodities Nearing a Cycle Top , Charles Nenner is cautious on commodities ...Charles Nenner just as Marc Faber also predicts a major war to come in 2012 or 2013. Whether the recent uprisings in the Middle East will spark this greater conflict, is unclear.Charles Nenner cycle work shows commodity prices peaking in the next few months. For those invested in gold and copper, he recommends taking profits.
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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