The US market has outperformed the European and Asian markets

Marc Faber : if I look at the volatility we have in the market and the result is actually that the S&P and the NASDAQ are flat for the year where European and Asian markets are down between ten and twenty percent so this year the US market has actually outperformed many other markets and that this out performance may continue for a while because in the US you have guaranteed extremely expansionary monetary policies with zero interest rates staying there essentially for ever because the new thinking at the FED is it will keep interest rates at zero until the unemployment rate drops below 7.5 percent , now this may never happen because as in the middle age when we village idiots we have today a lot of unemployable people so the national unemployment rate may be in modern society around ten percent - in Bloomberg

Market Sell off in 2012

Marc Faber : ...well I think that usually the second half of the year and the first few months of the new year are period of seasonal strength so it won't surprise me seeing the market rallying until February to April and then starting to sell off again in 2012 - in Bloomberg

FEDs interest rates are Negative in Real Terms

Marc Faber : I have a view , my view is nobody knows , because markets now are very volatile partly because interest rates are now at zero percent and in real terms negative which essentially stimulate speculation and in addition we have high frequency trading that leads to very wide swings in the market because the high frequency traders are basically based on models that are momentum like models in other words the market goes up everybody goes long the market goes down everybody goes short and what we had is a peak as I mentioned on May 2nd at 1370 on the S&P and then we went down sharply in late July August and bottomed out on October the 4th at 1074 on the S&P when everybody turned negative and after we had this very sharp rally almost 20 percent and I think this rally may carry on somewhat and that the super bear that think the S&P drops to 400 for the time being it will have to go to hibernation - in Bloomberg

The Equity Market may Rally Another 5 percent or so

Marc Faber : well I think it is going to be very difficult for the market to make a new high above in the case of the S&P May 2 the S&P at 1370 I think there is a lot of supply between this level here between 1260 to around 1350 , so I doubt we will see new highs but it does not mean that the market cannot rally another 5 percent or so

Marc Faber latest Bloomberg Interview - 14 No 2011

Marc Faber : I think (in Europe ) the market was oversold and we are rallying now but basically there is not much cvhange , but I like to say this I think that sooner or later the Europeans specifically the ECB will also have to monetize and therefore the problems can be postponed for a while

Marc Faber : Japan and the US can Default

Marc Faber : I think based on historical precedent it's very likely they will , not tomorrow , and before they do they'll print money like crazy in other words monetize the debt , but eventually I think it is quite clear that the US will default or they can't keep their obligation , say that medicare has to cut down , medicaid cut down social security recipients will get less money or people will have to pay more taxes in either way something will happen - in yahoo Tech Ticker

Marc Faber : the Euro could fall apart

Marc Faber : ...I am not optimistic about the US Dollar but when I look at other currencies they are not much better , I spend a lot of time traveling , I think at the present time actually the price level in the US is reasonable compared to say the Eurozone , and so if there are problems in the Eurozone Greece Spain Portugal and so forth what we could see is weakness in the Euro or may be even the Euro falling apart - in Yahoo Teck Ticker Click Here to watch the Full Interview >>>>

Sovereign debt default is very common throughout history

Marc Faber : Sovereign debt default throughout history has been very common for centuries , sovereign states have defaulted on their obligations , usually it happens because they borrowed too much and then just they can't pay and they inflate and things do not turn out well and then they default like Latin America in the 80s and 90s many countries defaulted , now I believe that the next country that is very vulnerable would be say Japan or the United States and also in Europe within the EU we have the so called PIIGS in other words Portugal Italy Ireland Greece and Spain these are countries that are quite vulnerable ...

In America roughly 50% of the population gets a handout one way or the other from the government

Marc Faber : "The problem with government is that the original intention of, especially a democracy, is very good,"

"Everybody has a say in how societies should be structured, but over time, it becomes very polarized and it moves into the hands of powerful business interests, and also interest groups like the military complex, or say the welfare recipients and so forth,"

"So you end up with kind of on the one hand a tyranny of the masses where you distribute all kinds of goodies to people. Like in America roughly 50% of the population gets a handout one way or the other from the government. So by continuing to support these people, you get their votes. "And at the other side of the spectrum, you have the people that pay the tax, the big corporations, and the well-to-do people, and they also want to maintain their interests, which is natural." And so you have a completely dysfunctional political system

The net investments in the US is now negative

Marc Faber : "If you look at net investments in the US, it has gone down for the last 20 years, and it's now negative. In other words, basically the capital stock of America is not being replenished...although it's being replenished somewhere else in the world. At the same time, the policies of the Keynesians have always encouraged spending," - in CNBC

The lack of saving is the problem of the United States

Marc Faber : "If you look at net investments in the US, it has gone down for the last 20 years, and it's now negative. In other words, basically the capital stock of America is not being replenished...although it's being replenished somewhere else in the world. At the same time, the policies of the Keynesians have always encouraged spending,"

"We're not going to get out of a recession by saying spend, spend, spend. That is wrong!"

"The lack of saving is the problem of the United States."

- in Bloomberg

Marc Faber : Wir haben eine Blase

Dr. Marc Faber beim DAF 07.11.2011 :Marc Faber zur aktuellen Marktlage und Zukunftsaussichten . Im letzten DAF-Interview hat Börsenguru Marc Faber den Crash an den Aktienmärkten richtig vorhergesehen ,Börsenguru Marc Faber warnt vor Aktieninvestments in China ,"Eine ziemlich gefährliche Situation" ,"Die Wirtschaft in China verlangsamt sich, das ist ganz klar"

Marc Faber : The parasites make a lot of money out of war time

Marc Faber : ...I would imagine that the resolution would be more money printing because that's the easiest thing to do , and over time money printing leads to huge increase in wealth and income inequality whereby the smart operators the rich people the well connected people can make a lot of money , it's like in war time you have the parasites that can make a hell lot of money in war times but it impoverishes eventually the population and the same happens when print money ...you are moving to an environment where there is very high distrust between the population and the government , there is a state within the state and that's the government and people are unhappy and when everything fail through money printing usually the government has to look for someone to blame for the unpleasant economic reality and frequently they easily blame the minority like in Africa the Indians or in Indonesia the Chinese and so forth and when everything fails these countries tend to go to war , and the US is already at war because in war time it is not important to win the war , whether you win or you lose a lot of people make a lot of money out of war time - in an interview with Chris Martenson

WallStreet didnt create the system. The system was created by the lobbyists and by Washington

Marc Faber : "Wall Street is a minority, anyone else would have done the same, they use the system but they didn't create the system. The system was created by the lobbyists and by Washington. So they (the protesters) should actually go to Washington and also occupy the Federal Reserve on the way,"

Marc Faber : The FED Interventions create miss-allocation of capital and bubbles l

Marc Faber : "If there's one institution in the US that consistently and repeatedly messes up everything, the Federal Reserve is that institution." Marc Faber told Chris Martenson , FED Interventions create miss-allocation of capital Dr Faber explains , they (The FED ) also let the bubbles happen , but he added that not everything is the consequences of the FED policies because even under a gold standard there are bubbles inflating , and to be honest this bubble blowing is not just the intention of the Federal Reserve Faber explains , but also Wall street was also encouraging bubbles , the FED is not the only one guilty of easy monetary policies , everybody enjoyed it because everybody was making money during the bull market in equities and in bonds

Marc Faber : I am a great optimist in life

Marc Faber : "I am a great optimist in life; otherwise I would commit suicide in view of the kind of governments we have nowadays." Marc faber told CNBC last week

Marc Faber Investment Strategy The Rule of 25

Marc Faber : The best thing an individual investor can do right now is to hold 25% of his assets in equities, 25% in real estate, 25% in gold, and 25% in cash ,
If equities, real estate, or Gold drop another 10% to 20%, put more cash in.

We had ten miserable years on the S&P

Marc Faber : Well, I think that if you look at say stocks on a ten year space, we are on the S&P say around 1,200 today. And we were at 1,550 in the year 2000, at 1,576 on October 12, 2007. So we had ten miserable years. In Europe, it is even worse. And I think that if you take a long term perspective to buy equities will make you money, but maybe not as much as you expect I think, that the returns for the next five to ten years - okay, one year stocks will be up 30 percent. They are up 100 percent from the lows on March 6, 2009. But, in general, I believe we will have a trading range and, at worse, we could be in a situation like Japan, where the market essentially is still down 70 percent from the highs in 1989.

U.S. monetary policy focuses too much on boosting consumption.

Marc Faber : U.S. monetary policy focuses too much on boosting consumption. This is a short-term fix, but benefits often accrue elsewhere, namely in China, which provides the goods to feed American consumerism. The negative real interest rates and boost to Chinese incomes and investment also push up commodities prices, which then counteracts the stimulative effect for U.S. consumers by acting as a tax on income.

the world’s bill for oil went from $250 billion in 1998 to $2 trillion in 2006 before doubling again by 2008 as the Fed started cutting rates towards zero. - at World Commodities Week in London

the U.S. government debt will double in the next five to 10 years.

Marc Faber : It took the U.S. 200 years to get to a federal debt of $1 trillion in 1980, another six years to get to $2 trillion, and now it’s north of $15 trillion.

adding in the unfunded liabilities of Medicare et al. would mean extending the chart up to “the fifth floor of this building”.

. The gap between federal spending (more than 70% of it mandatory) and taxation means the U.S. government’s debt will double in the next five to 10 years. - at World Commodities Week in London

Stocks Beat Bonds Over Next 10 Years

Marc Faber : "When you print money everything goes up at different times, different asset classes,"

"I think that stocks may still continue to go up, and I would rather own equities than government bonds for the next 10 years." - in CNBC

The U.S. monetary policy focuses too much on boosting consumption

Marc Faber : U.S. monetary policy focuses too much on boosting consumption. This is a short-term fix, but benefits often accrue elsewhere, namely in China, which provides the goods to feed American consumerism. The negative real interest rates and boost to Chinese incomes and investment also push up commodities prices, which then counteracts the stimulative effect for U.S. consumers by acting as a tax on income. Mr. Faber calculates the world’s bill for oil went from $250 billion in 1998 to $2 trillion in 2006 before doubling again by 2008 as the Fed started cutting rates towards zero. - Marc Faber said at World Commodities Week in London on Tuesday morning - via The Wall Street journal Blog

Diversify your asset holdings & where you hold those assets

You should not only diversify your asset holdings, but also diversify where you hold those assets, in case they’re seized by politicians as the welfare state enters its death throes. said Marc Faber who ends with an alarming prediction : “The governments, they’re going to f— you all, that’s for sure.” Marc Faber said at the World Commodities Week in London on Tuesday - via the Wall Street journal

When the Chinese bubble burst it will have devastating consequences for the global economy

Marc Faber : well, I think that the super bulls and super bears will be disappointed that we're in a trading range between 900 on the S&P and say1350, something like this. I don't think we will make a new high above the may 2nd high on the S&P which was 1370 , but I'd like to make the following observation , if you print money in the US it does not mean that it creates bubbles in the US , it can create bubble in your neighboring region , say, Latin America or Asia or it can create bubbles in precious metals or in commodities or in home prices somewhere else in the world or say, for instance, in China. and if the Chinese bubble burst one day which inevitably will happen, maybe not tomorrow but may be in three months,may be in three years, when it happens, it will have devastating consequences for the global economy. - in CNBC -  Click Here to watch the Interview >>>>

I rather own Equities than government Bonds for the next ten years

Marc Faber : well, I think that I am very constructive and a great optimist in life otherwise I would commit suicide in view of the kind of governments we have nowadays because for sure they will take wealth away from the well to do people one way or the other. and from the middle class they will take it away through inflating the economy and lowering the standards of living , the typical household in western Europe in the U.S,. has lower standards of living today than, say, 20, 30 years ago. there's no question about this. and so I think that we are in a very difficult situation and that deleveraging must occur the governments don't want to recognize that. and so the fiscal deficits are out of hand. but it doesn't mean that stocks will go down when you print money. everything goes up at different times, different asset classes. and I think that stocks may still continue to go up and I rather own equities than government bonds for the next ten years. - in CNBC -  Click Here to watch the Interview >>>>

I think Obama has good chance to be re-elected by simply distributing money

Marc Faber : ....Exactly what I mean, I think the governments today are no more representing the interest of the communities but they are defending their personal interests and essentially you can buy votes by voting for people who hand out money such as Mr Obama , I think he has good chance to be re-elected by simply distributing money, 48% of Americans today, they get some kind of government subsidy and the problem is, in Italy, in Greece, in Spain, everywhere, entitlements should be cut now and not in 2026. that will be far too late. but nobody wants to accept the reality. - in CNBC -  Click Here to watch the Interview >>>>

Eventually the hour of truth will happen

Marc Faber : Well before they'll go bankrupt they'll print money and they can print endless money and as long as we have Ben Bernanke and Janet Yellen at the FED they will also print money ,and so they can postpone the end game endlessly, endlessly not, but say for another five to ten years. but each money printing exercise brings about unintended consequences and these unintended consequences are partly higher inflation rates than would have been had no money been printed , I just read today that education cost this year will rise by 8 percent and that you know the typical household cannot afford anymore good education so the students have to get student loans now the student loans almost exceed consumer credit outstanding. so you essentially create more borrowings on top of an over leveraged society and eventually the hour of truth will happen - in CNBC -  Click Here to watch the Interview >>>>

The ECB will print money one way or the other

An outlook on the economy, with Marc Faber, Gloom, Boom and Doom Report editor/publisher.

Marc Faber : well, I don't know what other people think but what I think will happen eventually and there are so many contradictory statements coming out that nobody really knows ,But eventually the same will happen as i the United States the ECB will print money one way or the other and the debts that essentially should be written down to a realistic value will continue to be carried on the books of banks at unrealistic values so the end crisis will be postponed until the sovereigns go bankrupt.

Marc Faber latest video Interview - CNBC 26 October 2011

Dr Marc Faber The author publisher and editor of the Gloom, Boom & Doom newsletter, in a CNBC interview, gives his outlook on the global economy, Marc Faber says that "When you print money everything goes up at different times, different asset classes,"

. "I think that stocks may still continue to go up, and I would rather own equities than government bonds for the next 10 years."

Marc Faber: Greece is bankrupt & bond investors should have to take losses of 90 percent on their holdings

Greece is bankrupt, whether they want to admit it publicly or not,

it will need a 90 percent writedown, but that’s not going to happen. What will probably happen is a 50 percent write-down. - Marc Faber said in an interview with Bloomberg today in Zurich today. “I

The gap between federal spending and taxation means the U.S. government debt will double in the next five to 10 years.

Marc Faber : It took the U.S. 200 years to get to a federal debt of $1 trillion in 1980, another six years to get to $2 trillion, and now it’s north of $15 trillion. Referring to a chart showing the ballooning debt-to-GDP ratio, Faber says adding in the unfunded liabilities of Medicare et al. would mean extending the chart up to “the fifth floor of this building”. The conference is being held in the basement. The gap between federal spending (more than 70% of it mandatory) and taxation means the U.S. government’s debt will double in the next five to 10 years.- in The WSJ

China rise has been fueled by a Credit bubble that will go bust

Marc Faber : China’s rise has been fueled since 2007 by a bubble in credit there.

it would burst — now or in three years? — but it’s unsustainable. What’s more, foreigners should beware investing in China’s ongoing construction boom. Faber pointed to virtually all U.S. canal and railroad companies going bust in the 19th century, ruining many a foreign investor but leaving North America with an enviable set of infrastructure. He said the Chinese don’t issue shares in companies to “enrich foreigners” but to “impoverish foreigners.” If a foreigner wants to make money in China, Faber said, they should go work there. - In the WSJ

The West wont simply accept China’s rise

Marc Faber : One way Western powers will seek leverage over China will be to gain greater control over the Middle East, which supplies the bulk of China’s oil imports. Marc Faber sees conflicts like NATO’s Libya intervention as part of a broader strategy to do this. Meanwhile, with western governments due to go bust at some point, World War III beckons along with “the complete breakdown of society.” Makes you wonder whether attending a conference on commodities or indeed anything is worthwhile if that’s our future. - in The Wall street Journal

Rising living standards in the Emerging Economies will support demand for Commodities

Marc Faber : Rising living standards in the emerging world will support demand for commodities — and keep us paying through the nose.

if you double someone’s income from $1 million to $2 million, their spending on raw materials “except maybe cocaine” doesn’t rise. Not so for someone on a few thousand dollars a year. They buy cars and the other trappings of middle-class living. - Marc Faber said at World Commodities Week in London on Tuesday morning - via the Wall street journal

You are cheated out if you have savings in a bank.

Marc Faber : Look, I think that consumer confidence indices are low for a very specific reason. Just before I came on, there was a report that the sales of small businesses in America has been increasing. Yes, I believe that because a lot of the sales increase has to do with price increases. In other words, the cost of living of the average American is going up by much more than what Mr. Bernanke looks at, namely core CPI, which is essentially a consumer price index that excludes energy and food. Everybody I talk to has cost of living increases in America of more than five percent per annum. But the Federal Reserve and other agencies and governments, they do not believe that inflation is five percent. They think - they assume that inflation is say two or three percent, interest rates on deposits are zero, so you are cheated out if you have actually savings in a bank.

Equities will make you money on a long term perspective

Marc Faber : Well, I think that if you look at say stocks on a ten year space, we are on the S&P say around 1,200 today. And we were at 1,550 in the year 2000, at 1,576 on October 12, 2007. So we had ten miserable years. In Europe, it is even worse. And I think that if you take a long term perspective to buy equities will make you money, but maybe not as much as you expect I think, that the returns for the next five to ten years - okay, one year stocks will be up 30 percent. They are up 100 percent from the lows on March 6, 2009. But, in general, I believe we will have a trading range and, at worse, we could be in a situation like Japan, where the market essentially is still down 70 percent from the highs in 1989.- in Bloomberg

The problem with government is that over time, it becomes very polarized and it moves into the hands of powerful business interests

Marc Faber : Well, basically, the problem with government is that the original intention of especially a democracy is very good. Everybody has a say in how societies should be structured, but over time, it becomes very polarized and it moves into the hands of powerful business interests, and also interest groups like the military complex, or say the welfare recipients and so forth. So you end up with kind of on the one hand a tyranny of the masses where you distribute all kinds of goodies to people. Like in America roughly 50 percent of the population gets a handout one way or the other from the government. So by continuing to support these people, you get their votes. And at the other side of the spectrum, you have the people that pay the tax, the big corporations, and the well-to-do people, and they also want to maintain their interests, which is natural. And so you have a completely dysfunctional political system.

I would rather play Agriculture by owning farms than by speculating in wheat futures and corn futures

Marc Faber : Well, I think we have to distinguish between different commodities. We have agricultural commodities, and I think the long term outlook for agriculture in the world is probably rather favorable. I would rather play it by owning farms than by speculating in wheat futures and corn futures because the average investor will find it very difficult to trade these markets. And then we have industrial commodities, and this is an important signal for the market. They collapsed. They did not collapse because of Greece. They are down 30 percent because it is very likely that the Chinese economy is now decelerating very rapidly. And that on the world would have a far greater impact than say Greece. And so I think investors who all focus on the banking crisis in Europe, they overlook the next shoe to drop, which could be China.

Consumer Confidence indices are low for a very specific reason

Marc Faber : Look, I think that consumer confidence indices are low for a very specific reason. Just before I came on, there was a report that the sales of small businesses in America has been increasing. Yes, I believe that because a lot of the sales increase has to do with price increases. In other words, the cost of living of the average American is going up by much more than what Mr. Bernanke looks at, namely core CPI, which is essentially a consumer price index that excludes energy and food. Everybody I talk to has cost of living increases in America of more than five percent per annum. But the Federal Reserve and other agencies and governments, they do not believe that inflation is five percent. They think - they assume that inflation is say two or three percent, interest rates on deposits are zero, so you are cheated out if you have actually savings in a bank. - in Bloomberg Surveillance

A Recession in China would affect the resource producing regions of the world

Marc Faber : Well, I think if China had much slower growth or even a recession, which very few people talk about, but it is conceivable if you look at the U.S. 1800 to 2000, we had many recessions and we kept from growing. But basically, if that happens, then the demand for raw materials would go down. So it would affect all the resource producing regions of the world, including Latin America, Africa, the Middle East, central Asia, Russia, Australasia, and it would affect their currencies. And then these countries would have less money to buy goods that come from China, and we could have a downward spiral in the world which would be very vicious. - in Bloomberg Surveillance

There is a lot of uncertainty and the markets move according

Marc Faber : Well, I think we have a lot of volatility in markets and they are, as far as I am concerned, fairly unpredictable because we have a lot of government intervention. We do not know whether QE3 will come about in America, some form is likely. We do not know about the bailout of banks in Europe, some bailout is likely. So there is a lot of uncertainty and the markets move according to momentum. For instance, is it possible for me that the euro just strengthened in the last couple of days as much as it has because the outlook for Europe is probably worse than for the U.S. So we have a lot of uncertainty and all I can say is the best for investors is to stay diversified. - in Bloomberg Surveillance

We cannot blame Wall Street and well-to-do people for the mishap

Marc Faber : I think normal is very difficult to define, but very clearly it is not normal where we are now. But we cannot blame Wall Street and well-to-do people for the mishap, for this ratio to have exploded on the upside. We have to blame essentially expansionary monetary policies that favor assets. So you have low consumer price inflation, you have no wage inflation. In fact, the problem in America is that real wages, real compensation has been down since the 1970s. But at the same time, asset prices, equities, real estate and so forth have gone up dramatically, and that favors people who have these assets. And so the ratio expanded and you have now a record wealth, inequality, and income inequality. - In Bloomberg Surveillance

The American banks are actually a very good investment opportunity at the present depressed level

Marc Faber : Well, it is very difficult to really assess the quality of earnings of banks. But I am told by experts here in the U.S. that the auditors have become very, very tough and that banks basically are at their lows recently. JPMorgan was at less than $27. That $27 now is $32. And at their lows, basically the banks were selling below book value. So some people say that American banks are actually a very good investment opportunity at the present depressed level. - in Bloomberg Surveillance

The Banks stress tests in Europe were not properly conducted

Marc Faber : Well, basically, we had the stress test in Europe and out of 90 banks, only six or seven were deemed to be unsafe. The safe banks, including Dexia, are not safe because the stress test was not properly conducted. - in Bloomberg Surveillance

The next shoe to drop, which could be China

MARK FABER : Well, I think we have to distinguish between different commodities. We have agricultural commodities, and I think the long term outlook for agriculture in the world is probably rather favorable. I would rather play it by owning farms than by speculating in wheat futures and corn futures because the average investor will find it very difficult to trade these markets. And then we have industrial commodities, and this is an important signal for the market. They collapsed. They did not collapse because of Greece. They are down 30 percent because it is very likely that the Chinese economy is now decelerating very rapidly. And that on the world would have a far greater impact than say Greece. And so I think investors who all focus on the banking crisis in Europe, they overlook the next shoe to drop, which could be China.  in Bloomberg Surveillance

We have a lot of volatility in markets

Marc Faber : : Well, I think we have a lot of volatility in markets and they are, as far as I am concerned, fairly unpredictable because we have a lot of government intervention. We do not know whether QE3 will come about in America, some form is likely. We do not know about the bailout of banks in Europe, some bailout is likely. So there is a lot of uncertainty and the markets move according to momentum. For instance, is it possible for me that the euro just strengthened in the last couple of days as much as it has because the outlook for Europe is probably worse than for the U.S. So we have a lot of uncertainty and all I can say is the best for investors is to stay diversified. - in Bloomberg Surveillance

Banks should not act like hedge funds

Marc Faber : I think it is a very good move that banks become far more conservative because banks, when you think of it, your salary is probably paid into a bank account and you expect that money to be available to you at any time. So the bank has a fiduciary function, and it has a certain social function. And with your deposit, the banks should not go and speculate. So my proposal is basically to ring fence the depositors, and the domestic operation that is the traditional bank, and then farm out into separate entity what the bank does with money in terms of hedge fund activity. There are a lot of banks they are just like hedge funds. They take huge positions here and there, and then we have losses - as occurred for UBS in London, that basically should not be your concern as a depositor. - in Bloomberg Surveillance