Gold not in a Bubble

Marc Faber : "I don't think that gold is in a bubble," "When you buy gold, it's an insurance against systematic failure and problems in the financial markets." When you buy gold, it's an insurance against systematic failure and problems in the financial markets" "I'd buy every month a little bit of gold,"  Faber added - in Bloomberg

Marc Faber : Ron Paul is Honest

Marc Faber : ...But obviously what happened is the removal of Glass Steagall and also the bailout of LTCM in 1998 essentially gave a green light to financial institutions that they could leverage up there would be a Greenspan put and later a Barnanke put and and basically they became huge and badly run hedge funds leveraging up their balance sheet like now the FED is also hugely leveraged and I think we have had as we started out this mixture and combination between politics and business and is as M Ryan said that basically when you see that men get richer by grasp and by pull rather than by work and your laws do not protect you against them but protect them against you and when you see corruption rewarded and honesty becoming a self sacrifice like Mr Ron Paul he is looked upon as someone an oddball because he is honest and I think that's where we have reached and this society in my opinion will eventually end up very badly , .....and this crisis of 2008 - 2009 has actually made the system much worse and much more corrupt- in Bloomberg Radio Interview 03 Sept 2011

Honest & Dishonest Money

Marc Faber : ...well I think everybody knows money has different functions one of them is obviously to facilitate the exchange of goods and services the other one is to be a store of value and the third one is a unit of account , and I think that with zero interest rates and cost on living increasing in the order of 5 to 10 percent for most families in the United States , Money as a store of value is no longer existent and that's what I mean with Honest and Dishonest Money , and if look at the monetary base how it's grown since the mid 1980s and especially if you look at M1 that recently has reached the growth rate that is the highest in 35 years then you will ask yourself what will ultimately the value of paper money be - in Bloomberg Radio Interview - 03 Sept 2011

The Prospect for growth in Europe and the US not good

Marc Faber : "If I look at the politicians both in Europe and the US, I don't think that prospect (for growth) is very good," . "If I also look at the entitlement system and the government expenditures and the fiscal deficits and the debt overhang, I think for the next 10 years we'll have very muted growth in the Western world and standards of living for the average household will continue to decline." - in CNBC

Marc Faber : The US dollar is better than the Euro for the time being

Marc Faber : I think that the Chinese bought Euros at central banks frequently , they buy the currency which has been strong instead of the currency that will be strong and relatively to the Euro I think that the US dollar is probably the better currency for the time being , but may be the Chinese buy the Euro in the hope that the Euro will survive as a currency of Germany and that the weak countries will exit the Eurozone or kicked out ....- in Bloomberg Radio Interview 03 Sept 2011

Marc Faber - Bloomberg Radio Interview - 31 Aug 2011

Dr. Marc Faber interviewed by phone from Vancouver Canada by Bloomberg Radio , Marc Faber Says EU Should Have Let Greece Fail he further discusses the Greece debt crisis , the European Union and global financial the future of the dollar and the Euro his investment strategy in this market and why be believes Gold will correct in the coming 6 months to around $1600

One cannot be overly optimistic about Equities

Marc Faber : well, I don't know. I think that in general one of the reasons one cannot be overly optimistic about equities is if you go back to the period 1982 when the market bottomed out in august '82 up to year 2000, investors kind of worldwide trusted the regulators, they trusted the system and they were enthusiastic about owning equities. over the last ten years, the mood has changed a lot. investors and individuals in particular don't trust management anymore they are upset about executive compensation and they have low view of that. they are upset about the regulators. they think the markets are rigged. they are upset about rating agencies. there is a mistrust in paper. i think a lot of individuals will not come back to the share market and on rebounds they will reduce their positions. - in CNBC

I am not interested in financial stocks

Marc Faber : I personally I am not interested in financial stocks because I am in the financial sector. the only exception to that is banks in asia are reasonably sound because they never went and dabbled in all kinds of Greek bonds and Portuguese bonds and so forth and so on and we had a horrendous crisis in  97- 98 and following that crisis we had a period of ten years during which there was deleveraging. the banks in asia are reasonably sound. I wouldn't necessarily buy them today. they move lower along with the markets but in general if I look at financial stocks and I would look at banks in emerging economies, in India, in Thailand and possibly at some point in China but not yet. - in CNBC 23 Aug 2011

Industrial commodities would get hit very badly if China went into a recession

Marc Faber : I actually live on airplanes but if I'm not traveling i'm in the north of Thailand but i used to live 30 years in Hong Kong and I have an office in Hong Kong . .... yes. some people will tell you that china will crash. it's possible. other people are very positive about china or complacent. nobody knows precisely. we have a number of problems in china. we also have a misallocation of resources. I'm in Brazil today. all i can tell you is that in emerging economies, whether it is Brazil Russia, middle east, India or china or Thailand or Indonesia, the individual household is not highly leveraged. mortgage debt as a percent of the economy is very low. you don't have the debt overhang we have in the western world. china can have a slowdown and that's why I would rather not own industrial commodities that would get hit very badly if China went into a recession. equally we can have a recession in china for two years and thereafter we'll recover - in CNBC

Stocks measured by price earning ratios may not be quite that cheap as all the strategists claim

Marc Faber : The concept of valuation is very difficult when you have zero interest rates I can make a case that actually the price of Gold is still undervalued compared to say the mid 1980s when it was trading around 400 dollars , so it is very difficult to say what is valued in this environment , is a Picasso a good value or is it overvalued I do not know, but stocks measured by price earning ratios and considering that probably the economy will b weakening and that corporate profit may disappoint , may not be quite that cheap as all the strategists claim- in FOX Business News

Marc Faber Investment Strategy

Marc Faber : coming back to your question about the asset allocation , I would hold 25 to 30 percent in Equities , 20 to 30 percent in physical Gold , I would own some bonds and cash and I would own say 25 to 30 percent in real estate which people could own by owning say Asian real estate companies including REITs - in CNBC 23 Aug 2011

It leads to a huge cash flow drain if you have many girl friends

Marc Faber : I do not know your personal conditions whether you are married whether you have children how many girl friends you have and so forth and so on , we do not know I mean these are very important factors because it leads to a huge cash flow drain if you have many girl friends - in CNBC - 23 Aug 2011

We never really came out of the Recession in many different sectors of the economy

Marc Faber : I think We never really came out of the Recession in many different sectors of the economy in some sectors we came out , and if you look at the world , the emerging world has continued to grow throughout the period 2008 up to today , there is a slowdown now occurring in emerging economies but the western world western Europe and the US there is hardly any growth and if you look back say 1999 to today the US as an economy macro-economically speaking is of course much worse off than in 1999 courtesy of the federal reserve I may add - in CNBC

Marc Faber: Do not store your gold in the United States

Marc Faber : “I prefer if investors hold physical gold in a safe deposit box, ideally outside the US, in various locations… Switzerland, Singapore, Hong Kong, Australia, Canada… I think it’s important in today’s very uncertain world to diversify, not only the various asset classes… but also the custody of your assets should be in different jurisdictions.” - in CNBC

Everyone should hold some gold because it is a form of cash

Marc Faber : People should buy gold today because there is a huge run in precious metals recently and I think they need to consolidate and shake out the weak holders , everyone should hold some gold because it is a form of cash. Gold is the most honest form of Cash

My Favorite Investment remains Gold

Marc Faber : “So, you are probably better off in equities than in bonds. My favorite investment remains gold. As it happens, the gold price is coming down, and I hope it will drop $100 or $200. Not necessarily a prediction. I think we will go down in a correction because there has been too much enthusiasm recently.” - in Bloomberg

Marc Faber : I am the greatest bear on earth

Marc Faber : “I agree with you. I am the greatest bear on earth, but if you compare Treasury bond yields and equities, equities look reasonably attractive. I think we will have zero and below zero interest rates for the next 10 years. In other words, inflation adjusted to keep money in cash. Finally, the mood is so negative right now as a contrarian, you do not take a huge short position when people are as bearish as they are right now and when insider buying has picked up as much. I am as bearish as the greatest bear is. It is just that I do not believe stocks will implode.” - in Bloomberg

Uncertainty on a global level is affecting the markets

Marc Faber : “What I see extremely well is the stock market has traced out a major high between November of last year and June of this year and then fell sharply with very strong momentum and conviction very rapidly by close to 20%. I think that is a very important signal that we should not overlook. I think new highs are practically out of the question for the next six months to one year. We will likely move lower, but as I said, I do not think we will have a complete collapse.” - in Bloomberg

The S&P wont Surpass 2011 High of 1,370

Marc Faber : “We had rally from the low on the ninth of August at 1,101 on the S&P to almost 1,200. Then we came right down again. Basically we did not make new lows. And now I think we can rally again for a while.” “I think a lot of people will say the markets formed a double low and we have some technical indicators that are going to turn positive, so we could rally around 1,250, but as I said before, for me, we reached a high on May 2, 2011. 1,370 on the S&P–that we will not go through. My view is you have a lot of people with strategies that are very bullish. They have a yearend target of around 1,400-1,450 on the S&P. Then you have the super bear. I think both camps will be disappointed.” - in Bloomberg

Marc Faber : David Rosenberg was right and I was wrong

Marc Faber : I would like to remind you that the 10-year has made a new low. David Rosenberg was right and I was wrong. The 30-Year has not made a new low. The low in December 2008 was 2.53%. Now we’re around 3.4%. Basically we have an artificial market. The Fed has said we guarantee next to zero interest rates for the next two years. Banks and financial institutions are pouring into the 10-year because of the low rates at the present time - in Bloomberg

Marc Faber on Gary Schilling bet against Copper

Marc Faber : I have known Gary Schilling since 1970 when we worked together. He has been a frequent bear about commodities and about copper. I happen to think copper is likely to come down, but I would not bet too heavily on it, because it takes a long time to bring on additional copper mines. Unless the Chinese economy collapses, the demand for copper will stay relatively high. If the Chinese economy collapses and Jim Chanos is right, then you want to be short not only copper, but short everything - in Bloomberg

Marc Faber on The insider trading

Marc Faber : The insider buying has picked up, but there is still a lot of insider selling. Compared to all the selling in the last six months the buying is relatively muted. The insiders in general are a group of people against whom I would not bet against necessarily. All I am saying is I am very bearish. I think we will have inflation. I think the Treasury market is a disaster waiting to happen. I think the economy will slow down. They’re going to print money and we will go to war at some stage somewhere. So, you are probably better off in equities than in bonds. My favorite investment remains gold. As it happens the gold price is coming down, and I hope it will drop $100 or $200. Not necessarily a prediction. I think we will go down in a correction because there has been too much enthusiasm recently - in Bloomberg

Marc Faber - You Should Have 20 - 30% in Physical Gold

Marc Faber on CNBC Tue 23 Aug : Marc Faber, Gloom, Boom, and Doom Report, who adds that everyone should hold some gold because it is a form of cash. : " I would expect a correction in Gold to occur Marc Faber :"I'm not certain that people should buy gold today because we have a huge run in precious metals recently and they need to consolidate or shake out the weak holder. I would expect the correction in gold to occur. I think that everybody should have some gold if they want to own some cash because gold is the most honest form of cash people can own" "well, it's (ETFs) a claim on physical gold. i prefer if investors hold physical gold in a safe deposit box ideally outside of the u.s. in various locations, Switzerland, Singapore, Hong Kong, Australia, Canada. " "I think it's important in today's very uncertain world to diversify not only the various asset classes, in other words equities, bonds, gold, real estate and also the custody of your assets should be in different jurisdiction , I don't trust anyone"

Equities look reasonably attractive compared to treasuries

Marc Faber : if you compare treasury bond yields and equities , Equities look reasonably attractive compared to treasuries , I think we will have zero and below zero interest rates for the next ten years in the real terms in other words inflation adjusted , to keep money in cash is a disaster for the next ten years , and finally the mood is so negative right now , as a contrarian you do not take a huge short position when people are as bearish as they are now , and when insider buying has peaked up as much , but believe me I am as bearish as the greatest bear is , it just that I do not believe that stocks will implode - in Bloomberg

If the Chinese economy collapses then you want to be short everything

Marc Faber : copper is likely to come down but I would not bet too heavily on it because it takes a long time to bring on additional copper mines , and unless the Chinese economy collapses the demand for copper will stay relatively high , but if the Chinese economy collapses and Jim Chanos is right then you want to be short not only copper you want to be short everything ! - in Bloomberg

Marc Faber - S&P Wont Surpass 2011 High of about 1,370

Marc Faber : we had a rally from the low of the 9th of August at 1101 on the S&P to almost 1200 and then we came right down again and basically we did not make new lows and now I think that we can rally again for a while , ...what I mean is I think a lot of people will say the market formed a double low and we have some technical indicators that are going to turn positive and so we could rally around 1250 but as I said before for me we reached a high on the second of May 2011 1370 on the S&P that we will not go through , well no doubt nobody knows for sure , my view is you have a lot of people that are strategists that are very bullish they have a year end target of around 1400 , 1450 on the S&P then you have the super bear , that is may be both camps will be disappointed ....

Economist John Williams of Shadow Stats on Goldseek Radio - Aug. 24, 2011

John Williams of Shadow stats talks about the road to hyperinflation 2014 and the fake government numbers , the real figures on unemployment the GDP the Inflation the consumer price index and the overall US economy , John Williams who is an independent economist not funded by any government agency , his figures are different from the official figures that the US government shows publicly.....Economist of Shadow Government Statistics and shadowstats.com founder John Williams claims government employment and inflation numbers are inaccurate, and economy is shakier than indicated.There is no way we could possibly pay our debt either we raise the taxes or we do not either we cut social security or we do not , we are headed towards a Wiemar Republic type of hyperinflation and a banana republic kind of government ..John Williams of 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...the whole system is collapsing

Marc Faber on CNBC 23 Aug - I would expect a correction in Gold to occur

Marc Faber on CNBC Tue 23 Aug I would expect a correction in Gold to occur Marc Faber :"I'm not certain that people should buy gold today because we have a huge run in precious metals recently and they need to consolidate or shake out the weak holder. I would expect the correction in gold to occur. I think that everybody should have some gold if they want to own some cash because gold is the most honest form of cash people can own" "well, it's (ETFs) a claim on physical gold. i prefer if investors hold physical gold in a safe deposit box ideally outside of the u.s. in various locations, Switzerland, Singapore, Hong Kong, Australia, Canada. " "I think it's important in today's very uncertain world to diversify not only the various asset classes, in other words equities, bonds, gold, real estate and also the custody of your assets should be in different jurisdiction , I don't trust anyone"

To some extent we are in QE3 already

Marc Faber : I think what he (Ben Bernanke) will say is that they are monitoring the situation and that they will take "appropriate measures" when they are required and I just like to mention to some extent we are in midst o fQE3 already because by announcing that the FED will keep Zero interest rates until the middle of 2013 they basically encouraged financial institutions to borrow short term and to buy ten years treasuries - in Bloomberg 23 Aug 2011

 

Marc Faber on The Market Outlook - Bloomberg 23 Aug 2011

Marc Faber, publisher of the Gloom, Boom & Doom report, talks about global financial markets, commodities and investment strategy.

Marc Faber : " we had a rally from the low of the 9th of August at 1101 on the S&P , to almost 1200 and then we came right down again and basically we did not make new lows and now I think that we can rally again for a while " Marc Faber says " ...what I mean is I think a lot of people will think the market formed the double low and we have some technical indicators that are going to turn positive and so we could rally to around 1250 but as I said before for me we reach the high on the 2nd of May 2011, 1370 on the S&P that we will not go through "

Matt Taibbi : The SEC covering up Wall Street Crimes ?

Rolling Stone contributing editor Matt Taibbi has a new piece in Rolling Stone about the SEC the Securities and Exchange Commission covering up crimes on Wall Street and destroying the records of promising cases in the years leading up to the financial meltdown.The SEC has been shredding case documents all along so its no surprise there has been zero justice for the big time wall street criminals. isn't it strange that nothing happens to the Wall Street Crooks until they down grade the US Credit Ratings then all of a sudden the justice department goes after them. All there going to do is harass them. There is no way anyone will do jail time.the SEC is bought by the banks so of course they are going to get rid of all the evidence.,corrupt corporations infiltrate government agencies that are supposed to oversee them so they can hijack these agencies for their own corporate interest .Direct government involvement should always be minimal, or corrupt agencies like the SEC are the inevitable result, time and time again.America builds more prisons than schools but somehow we can’t open a branch on Wall Street.

Marc Faber on 21st Century China

Marc Faber : "I think this is a huge risk and it is a much larger risk for the global economy than it is for the US , because the US is no more a large commodity buyer China is , and If Chinese growth really slows down or if they have a crash as some analyst say they may have , then it obviously will impact the economies of countries like Australia the middle east Brazil Canada and so forth and of course also the property market of Vancouver Hong Kong Singapore Sydney and then it will back fire in the sense that these economies that produce commodities are falling commodity prices they'll buy less goods from China , so it could trigger a vicious circle on the downside and I would say there is a fairly good chance that this could happen,This would really be something that the world central bankers wouldn't be able to help with printing money , they may be able to print money but it wouldn't really help the real economy it may help the financial economy to support equity prices " "I do not think it will be a trade war , I believe and that's why I am ultra bearish about everything , that being ultra bearish about everything I think you better off in equities than in bond or in cash probably the best will be in precious metals , but basically I see that ten years ago a huge shift in the balance of the economic power begun from the western world notable from the US and western Europe to Asia and emerging economies , we have today in the goods market I am not talking about services because services are very difficult to measure but in the goods market the emerging economies are much much larger than western Europe and the US even combined , so this shift in the balance of economic power to emerging economies is accompanied by a shift in political and military power and that the west will not just set there and do nothing , I mean the Libyan expedition is the first shot , I think the western world want to control China by controlling the oil supplies from the middle east and then it will come to war and in war times the one thing you do not want to is in the US government debt bonds equities will do OK and precious metals and some commodities will do very well but I would prepare for the worst but when you think it is true in the worse scenario you do not want to be in Cash US Dollars and in the US Government bonds

Financial conditions are today worse than they were prior to the crisis in 2008

Marc Faber : Financial conditions are today worse than they were prior to the crisis in 2008, The fiscal deficits have exploded and the political system [in both the U.S. and Europe] has become completely dysfunctional. - in MarketWatch

Gold is destined to move higher

Marc Faber : Gold is likely to correct, possibly by $100 or $150, but I continue to recommend gradual accumulation. As long as the trio of Obama, [U.S. Treasury Secretary Timothy Geithner] and Bernanke are in power, gold is destined to move higher. Long-term U.S. Treasuries are of no value. They will default by paying interest in a worthless currency. - in Baron's Blog

I am not buying anything right now

Marc Faber : I'm not buying anything right now. But if stocks dropped another 10% to 20%, I might add to the positions I mentioned in the Midyear Roundtable. - in Baron's Blog

I am not that negative about Equities

Marc Faber : “I’m not that negative about equities,” “If you’re bearish about the world, you’ll probably be better off in equities than in government bonds and cash.” - in ibtimes.com

I dont believe a single word of what the Bureau of Labor Statistics is printing about inflation figures

Marc Faber : “Weak economies usually have higher inflation rates than stronger economies,” . “In weak economies you have loose fiscal policies and money printing. And the U.S. is the world champion in loose monetary policies. I don’t believe a single word of what the Bureau of Labor Statistics is printing about inflation figures. “Paper money has lost its value,” “Hyperinflation is the pattern to come.” - in ibtimes.com

U.S. government bonds are junk bonds

Marc Faber : “It’s a suicidal investment to own 10-year or 30-year U.S. Treasurys,” “U.S. government bonds are junk bonds,” “As long as they can print, they can pay the interest. But another way to default is to pay the interest and principal in depreciating currency. “For that reason I would advocate a wide basket of diversification out of dollar-based assets,” “The dollar may rally somewhat, but clearly in the long run the dollar and other paper currencies — the euro is not much better — will have a depreciating tendency vis-a-vis honest money: gold and silver.” - in MarketWatch

Physical Gold in a safe deposit box is the safest

Marc Faber : “The function of paper money is to facilitate the exchange of goods and services, to be a store of value and a unit of account — the U.S. dollar fails on all three,” “Intelligent people, instead of holding cash in U.S. dollars with zero interest rates, why not hold money in gold and silver?” And as a currency, gold should be held in its physical form and not in shares of gold miners or even exchange-traded funds. That would rule out popular vehicles such as SPDR Gold Trust or iShares Gold Trust Be sure to store your gold in banks in Switzerland, London, Singapore, Hong Kong, Australia — just not in the U.S., Faber said. “Physical gold in a safe deposit box is the safest,” . “Forget about huge capital gains. I would look at capital preservation. I want to preserve my capital. Faber added - in MarketWatch

The Swiss Franc is not as good as Gold

Marc Faber : I do not think that the Swiss Franc is as good as Gold because it is also essentially managed by a central Bank and nothing that is managed by a central bank is a hundred percent reliable , but the Swiss franc will remain a better currency than the US Dollar , having said that we also went down on the Swiss franc against the US Dollar by ten percent whithin just a few days ... - in Bloomberg 19 Aug 2011

Marc Faber latest Bloomberg interview - 19 Aug 2011

Dr. Marc Faber interviewed by Bloomberg TV on 19th August 2011 - Marc Faber : " well actually it may not ( The treasurys bubble) burst for a while because obviously the FED will keep short term rates at close to zero for extended period of time and likely there will be some wither official or unofficial type of QE3 and QE4 , but in my view an investor who today buys a ten year treasury with this kind of yield it is today at 2.08 percent is not going to make any money in the next ten years either because yields will go much higher or because the dollar will go much lower "

Marc Faber Top 5 Suggestions For Investors

Dr. Marc Faber spoke to to Jonathan Burton, of MarketWatch.com and he gave him 5 top suggestions for a safe investment . Dr Marc Faber is not happy at all of what he sees in the world economy with the exception of Asia where he is looking at dividend producing stocks ,he does not like the way the government around the globe are printing money as if there is no tomorrow , but he is actually more optimistic about stocks in relation with treasuries cash and other paper assets ( Cash is trash ) and he is obviously quite bullish on Gold but not ETF just physical Gold , he sees gold as an alternative currency developing instead of the US dollar :
1.) Avoid Treasuries.
2.) Cash is trash. 
3.) Stocks offer some safety.
4.) Emerging markets will expand.
5.) Gold is worth its weight.
Read More @ Barron‘s Blog >>>>>

It is a suicidal investment to own 10-year or 30-year U.S. Treasurys

Marc Faber : “It’s a suicidal investment to own 10-year or 30-year U.S. Treasurys,” “U.S. government bonds are junk bonds.” - in Beacon Equity Research

The Federal Reserve is a very evil institution

Marc Faber : “The Federal Reserve is a very evil institution,” “in the sense that they punish decent people who have saved all their lives. These are people who don’t understand about stocks and investments, and suddenly they are forced to speculate.” - in MarketWatch

the political system in both the U.S. and Europe has become completely dysfunctional

Marc Faber : “Financial conditions are today worse than they were prior to the crisis in 2008,” “The fiscal deficits have exploded and the political system [in both the U.S. and Europe] has become completely dysfunctional.”  - in MarketWatch

Hold On To Gold

Marc Faber : “I am not sure how high the price of gold or silver will increase but when I consider the further inevitable growth of the US and other governments’ debts, the creation of paper money in the world and especially at the low gold ownership rate in the world, I am confident that the price trend of gold is up,” Faber wrote in the August edition of his newsletter the Gloom Boom & Doom Report. - in The Jakarta Globe

Marc Faber : Oil will do well if there is a war

Marc Faber :  The next time we will have a global economic crisis it will be much worse than 2008 before it happens there will be money printing and there 'll be war , and then the whole thing will collapse , and that's why I am advising people you have to think it through , in a total collapse you do not want to own government bonds and cash , equities they do not perform well but at least you have the ownership of companies and precious metals in that environment do relatively well and of course Oil will do well if there is a war- in CNBC

Marc Faber : money is moving out of paper into Gold

Marc Faber : If you think it through US debt downgrade should actually lead to weaker US Bond prices , yet yesterday and to day in Asia stocks are selling off and US government bonds rallied , but I always said , if you print money you are a serial bubble printer a bubble maker , you create one bubble after the other in different asset classes , and I think today to buy a thirty year US government bond is at a yield of 3.65 percent and a ten years bond at a yield of 2.31 percent , I would rather buy equities today but I think after a rebound we are going to go lower because the momentum is now very strong on the downside and I believe there is a loss of confidence in paper money and money is moving out of paper into Gold - in CNBC TV-18

Click Here to Watch the Full Interview >>>>>>>>>

Marc Faber : The Us Dollar is simply a doomed currency

Marc Faber - FOX Business News 08/12/11

Marc Faber : well basically we have a lot of volatility as you know the last 12 months the S&P rose from 1010 on July 1st of 2010 to the peak of May 2nd of this year 1370 and then we dropped four days ago to 1101 and now we are at 1178 so we have a lot of volatility as in the market may rebound somewhat more because we are very oversold and some technical indicators have turned positive including also insider buying , but in general I think it will be extremely difficult for stocks to make a new high and after this rebound I think we'll drift lower it is not to say that we will collapse because if the S&P dropped to around a thousand or so the FED will certainly pump again money into the system the concept of valuation is very difficult to make when you have zero interest rates , I can make a case that actually the price of Gold is still undervalued compared to say to mi 1990s when it was traded at 400 dollars , so it is very difficult to say what is valued in this environment is a Picasso a good value or is it over valued ? I don't know but stocks measured by prize earning ratios and considering that probably the economy will be weakening and that corporate profit may disappoint may not be quite as cheap as all the strategists claim I believe all the central banks in the whole world will print money and that eventually we will have symptoms of inflation they may not necessarily all be consumer based prices they can be manifesting themselves with insurance premiums going up with transportation going up energy price going up food prices going up educational costs going up these are inflation measures also and the weakening of the US Dollar that happened , now near term the US Dollar can rebound somewhat , possible but in the long run it is simply a doomed currency that's where the doom comes in

Jim Rickards : Europe can survive if they go back to the gold standard

Jim Rickards , Tangent Capital Partners, discusses the need to restructure Italy's debt and his outlook for gold. " I do not understand why the countries are being held hostage to the banks. they should turn it around and the banks should be held hostage by the countries. but you have to consider what's the alternative. i discussed a radical solution. the alternative is 10, 15 years of inflation. who loses? pensioners, savers, people who were prudent, people on fixed income with insurance policies. there will be losses. do they fall on bond holders or average people? my solution is quick, fast, get it over with. put it on the bond holders and give citizens a break. ...... if they go back to the gold standard. they have 10,000 tons of Gold. they have an alternative there. i think they have to repudiate the debt and back the currency with gold and go forward"

Marc Faber : after the rebound we will go lower

Dr. Marc Faber was interviewed by the Indian TV CNBC Tv18 on V about his outlook for the markets after the S&P downgraded the rating for the US debt . Marc Faber : no question about it this is a bear market it begun actually almost a year ago and then QE2 came in and kicked up stocks but the majority of stocks actually did not make a new high and we peaked out on the S&P at 1370 on May 2nd 2011 and since then the technical action of the market have been horrible horrible , and the market yesterday in New York did not go down because of the debt downgrade of the US government but it went down for other reasons , now the market is at discounting mechanisms I do not know what the other reasons are but I suspect that in the second half of the year instead of having like always and permanently bullish strategies in the US maintains higher corporate earning we could have lower corporate earnings we could have geopolitical problems we could have debt problems in Europe and many things that can happen that are far more important than the debt downgrading of the US , so I think that the market is telling you something , something is rotten , now the market right now is deeply oversold and I wouldn't sell today shares I think they can rebound but the new highs for the year in my opinion out of the question ...

Click Here to Watch the Full Interview >>>>>>>>>

Marc Faber : the Treasury market is another example of a gigantic bubble

Marc Faber : “I’ve been in this business for 40 years and on many occasions, nothing made sense to me….I think the Treasury market is another example of a gigantic bubble. The problem with the Federal Reserve policy of essentially zero interest rates is that they are essentially throwing money at the system, but they don’t control where the money will flow to. It can flow at some point into commodity-related stocks. It can flow into gold, oil, treasuries, but it doesn’t flow evenly into these assets. In my opinion, the Treasury, the long-dated Treasuries are essentially the short of the century thing here.”  - in Bloomberg Tv

Marc Faber : the Fed is underestimating the severity of the coming economic downturn

Marc Faber : “I think the Fed is underestimating the severity of the coming economic downturn. Essentially they spent their bullets. It is very difficult to follow through with QE3 right here, because you have gold prices going ballistic, and you have the dollar being very weak, and so there are unintended consequences with implementing QE3 right here.” - in Bloomberg TV

Marc Faber : America should save more and spend less

Marc Faber : “From 1981 to 2007, we have an economy that was living beyond its means. As a result of continued debt accumulation, GDP was higher than would otherwise have been the case. Now we have a period of sub-par growth that can last for quite some time now, and like in the case of Japan after 1989, people instead of being encouraged to spend, they should be encouraged to save more, and the U.S. should save more and spend less. And then capital spending will essentially pick up.” - in Bloomberg TV

Marc Faber : the fundamentals of emerging economies are far better than the fundamentals of European countries and the fundamentals of the United States

Marc Faber : “I think right now the technical picture is so horrible that I would use a rebound as a lightning up opportunity. I think [equities] will move lower. I mean, some say you should move back into emerging economies because the fundamentals of emerging economies are far better than the fundamentals of European countries and the fundamentals of the United States. This is something I will consider.” “The only thing I have to say, basically the market has sold off in such a rapid way and with so much momentum that I am smelling as if something really wrong happens in the next two or three months, because the market is a discounting mechanism. Like March 2009 the market started to go up and people were baffled why it started to go up. Now it starts to go down, and maybe after three months people will wake up and scratch their heads and say now, we know why it started to go down, because maybe there is geo political problems, maybe the Middle East blows up, maybe the economy is horrible.” - in Bloomberg

Marc Faber Bloomberg TV Interview - 09 Aug 2011

Marc Faber : I think they did the right thing that they did not announce QE3 , so they can watch the reaction of assets whether they go lower , I think the market is more likely to move still lower , we are very over sold we can have a rebound like we have today may be we will have a rebound next week or so , but in general I thing we will test the July lows of last year , the S&P at 1010 after that probably we will get kind of QE3 announcement .... I think the FED is underestimating the severity of the coming economic downturn , and also they've shot out essentially they've spent their bullets , it is very difficult to follow with QE2 right here because you have gold prices going ballistic and you have the dollar being very weak and so there are unintended consequences with implementing QE3 right here , ....actually the best thing they could (The FED ) do for the market would be to collectively resign , this is my view ...everybody in the world have become a Keynesian everybody thinks the government should do this the government should do that the FED should do this the Treasury should do that , I think sometimes the FED should do nothing and I welcome the decision today that they are not doing anything worse of what they have already done ... I want to ask you , what have QE1 and QE2 done to the labor market ? Nothing at all , it has done nothing for the housing market , it lifted stocks and it created wider wealth inequality in the sense that people that own assets have done very well and the people that are the lower income recipient groups they are hurt by rising energy prices and rising foo prices ....

Marc Faber : Markets extremely Oversold, Set to Rebound

Marc Faber : "I think that near-term stock markets around the world are very, very oversold and most oversold since February, March 2009 and 1987," " It doesn't mean that they can't go lower, but I think they will rebound."  - in CNBC

Marc Faber : the S&P basically downgraded a junk bond

Marc Faber, publisher of the Gloom, Boom & Doom interviewed by Bloomberg Television on August 08th 2011 about the US Downgrade by the S&P Faber speaks from Chiang Mai, Thailand, :

Marc Faber : ...S&P basically downgraded a junk bond because it is no longer a triple A , a government bond has a triple A rating when it is willing to pay the interests in a stable currency we are not dealing in this particular case the US Dollar with a stable currency The rating agencies are looking backward and not forward , The US fiscal position is a disaster if you include non funded liabilities and some kind of default will occur , now there are two ways a government can default , it can default by not paying the interests and restructuring its debt as happened in Argentina and in other countries repeatedly , or it can repay the interests and the debt in a depreciated currency , all currencies all paper money are losing value in terms of their purchasing power and of course the Us Dolar is losing more of its purchasing power than other currencies " "

Marc Faber : we have abysmal performance of equities in the last ten years

Marc Faber : Well, basically, I mean, I would say we look at different asset classes. So we cash, we have government bonds, we have corporate bonds, we have real estate, we have equities and we have commodities and precious metals. And so the question is, you know, where do you put your money if you and I go away to an island or to jail for ten years and we can’t make any transactions and we come back in ten years’ time? I think if the objective is the maintenance of purchasing power, in other words, you just don’t want to wake up in ten years’ time when you come out of jail and what you have is worthless, then I would say that probably gold is the best alternative. If the question is how do you maximize profit, probably there may be more profit in equities because, you know, we have abysmal performance of equities in the last ten years. And particularly in the US, as a result of the decline in the value of the US dollar, equities would seem to me to be not particularly expensive. I think what would be dangerous for you and me would be to put all our money in US dollar cash and in US government bonds for ten years and then come back and maybe find out that we can buy with a hundred thousand dollars just a cup of coffee -- or not even that.