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
Feb 10, 2012 : Is Greece Irrelevant to Global Markets? Marc Faber the author editor and publisher of the Gloom, Boom & Doom Report explains to Fox Business News why he thinks that Greece should have little impact on the markets and why he is bullish on emerging markets
GoldSeek Radio's Chris Waltzek talks to Louis Navellier Chief Investment Officer of Navellier Associates - Feb 9, 2012 : Louis Navellier, editor of Emerging Growth, gives his outlook for gold and silver , the inflation the Facebook IPO and he tells why the dollar could go straight down and what that could mean for the US economy and stock market and especially the precious metals
Marc Faber: Yes. Credit was growing rapidly and the hangover period could last for a while but these markets are good long-term investments. I travel extensively in these countries and you can see the growth of economic development. People go from bicycles to motorcycles, and from motorcycles to cars. First-time buyers of cars jump socially, as do first-time buyers of homes. Thailand has several consumer-credit companies. Buyers will do everything to pay off their loans. They aren't going to walk away. Plus, bankruptcy laws are tough.
Hedge funds performed badly last year, with few exceptions. Why is that? The bond market was strong, gold was up 11% and the U.S. market was flat, but sectors such as utilities did well. This year the economy could contract and stocks could go ballistic as central banks print money. If investors are diversified, they might do all right. - in The Barron's 2012 Roundtable
Marc Faber: The question is, to what extent has that been discounted already? They could fall another 20%, but a luxury-property developer like Wing Tai Holdings [WINGT.Singapore] already sells for half its book value. I am positive about Singapore in the long run because more Europeans are moving there, and to Hong Kong. Because of banking-secrecy laws it is probably safer to have a bank account in Singapore than Europe.
The Hong Kong market was hit hard, and stocks haven't bottomed yet. But you can buy Sun Hung Kai Properties [16.Hong Kong], with a P/E of five and a yield of 3.5%. Swire Pacific [19.Hong Kong] is a blue-chip, a well-managed conglomerate. It yields almost 5% and the P/E is 11. Hang Seng Bank [11.HK] yields 5.6% and trades for 11 times earnings. There isn't a huge risk in these stocks, but maybe I'm too bullish. - in Barron's 2012 Roundtable
John Williams - Financial sense Newshour - 20 Jan 2012
John Williams from Shadow Government Statistics. warns of a Hyper-inflationary Great Depression by 2014
John Williams (in another interview ): Sure. Before we had the financial crisis that broke in 2007 and 2008, the system was headed for hyperinflation by the end of the current decade, perhaps by 2020. That was just the way the government’s obligations were lined up. We were seeing deficits still averaging 5 trillion dollars a year on a gap accounting basis, completely unsustainable. By 2020 we would have been at a point where the government would have had to print the money to meet its obligations. There is no way it could sustain that with borrowing.
We had a circumstance develop in 2006-2007 where the economy started to turn down sharply, particularly in the housing area, which helped to trigger a financial crisis. The economy helped to trigger the financial crisis, the financial crisis exacerbated the downturn in the economy, and we saw almost a collapse in economic activity going through the year 2007, into 2008, even to 2009, and it has been pretty much bottom-bouncing since, irrespective of the official pronouncements out of Washington.
But in August/September of 2008, the people in Washington realized that they had so loused up the system that they were on the brink of a systemic failure, that the banking system was going to collapse if they didn’t do something. They weren’t kidding about that. We shouldn’t have gotten to that point, but having gotten to that point, they had to do what they had to do and put forth all sorts of emergency spending, lending, guarantees – they created whatever money they had to in order to keep the system from failing.
I will contend that they will continue to do that so long as the markets will let them get away with it. The problem is that the cures that they put forth did nothing to resolve the problem. It bought them a little time in terms of systemic stability, but the systemic solvency crisis continues. The banks are not healthy. The big banks are still in trouble.
We have another crisis that is brewing here. The U.S. economy did not recover. It, in fact, is still bottom-bouncing, and it is about to turn down again. All these factors will keep the Fed and the Treasury, the federal government, trying to pump money into the economy, doing some form of stimulus, providing liquidity to the banking system. The costs of all that are very inflationary, and that has accelerated the process whereby, if you look over the last year, the actions taken by the Fed, by the federal government, did a lot to kill global confidence in the U.S. dollar.
Looking back to the events in July/August of last year, they had the negotiation over the debt ceiling, and the inability to come up with a deficit reduction package or the willingness to actually take the political steps necessary to slash the social spending, which is effecting a looming national bankruptcy. As that fell apart, the rest of the world was watching the United States, and if you look at the market reaction, this was even before the downgrade of the U.S. Treasuries, there was panic selling of the dollar. The Swiss franc was soaring, gold was soaring, and that is one of the prerequisites to having hyperinflation – a loss of confidence – a loss of confidence in the dollar.
Then there were all sorts of market interventions. I would contend that the crisis in Europe was a real problem, but there was a lot of effort made to focus market attention on the crisis in Europe as a foil – efforts were made to curtail the rise in gold prices. The Swiss National Bank moved, at least for a short period of time, to tie the Swiss franc to the euro to effectively prop the euro, and to effectively prop the dollar.
It is an unstable, very volatile situation, that could break apart at any time, and as it does, there are a number of things that could push it over the edge, such as renewed Fed action, which is a virtual certainty, just a matter of when it hits. But you will start to see this circumstance move very rapidly to a higher inflation, and then as the confidence in the dollar continues to shrink, into a hyperinflation.
A lot of people say, “Oh, my goodness, how can you have inflation with a weak economy?” Indeed, we have a weak economy, and there are a lot of problems with what is being reported, but if you look at something as simple as payroll employment, despite all the problems with the reporting of the series, and I am happy to talk about the problems of the reporting issues, it is probably the best quality broad economic statistic that the government publishes. Just don’t pay too much attention to the month-to-month changes. It is much better than the GDP, and it is a coincident indicator of economic activity.
If you look at what has happened there, it plunged in late 2008 and 2009, and pretty much it has been bottom bouncing. It has moved a little bit higher, but it is far from having recovered the level that it was before the official recession started in 2007. I am talking about the level of payroll employment, the number of jobs that people are being paid for on company payrolls.
Marc Faber: There is a huge amount of underground lending throughout Asia. Mr. Bernanke can drop his dollar bills on the U.S., but the growth in dollars here can lead to strong economic growth and inflation in other countries. That has happened in the past few years. I am the most bearish person you can imagine on earth, which is why I recommend putting, say, 25% of your money in equities, 25% in precious metals, 25% in cash and bonds and 25% in real estate. These assets won't go up substantially this year, but they could preserve your wealth. People say large-capitalization stocks are inexpensive, and I agree. I would buy a basket of high-quality big-caps in Europe and the U.S. You can by Total [TOT], in France, which yields more than 5%, and Nestlé [NESN.Switzerland] and Novartis [NVS] and Pfizer [PFE]. These stocks don't have huge downside risk. Because emerging markets saw big declines last year, you could also buy SATS [SATS.Singapore], in Singapore, which provides catering services to the airline industry and ports. It yields 5% and trades for 13 times earnings. I also like K-REIT Asia Management [KREIT.Singapore], a real-estate investment trust that yields 7%. The stock has fallen by about 50% and the dividend might be cut. But even if it is cut to 4%, this is an OK investment. These stocks won't go up right away, but reinvesting dividends will yield an adequate return over time. StarHub [STH.Singapore], the mobile-phone company, yields 6.9% and the P/E is 14. - in The Barron's Roundtable
Marc Faber : My preference is asset diversification, as we don't know how much money governments will print, the size of fiscal deficits and so forth. The biggest uncertainty is what will happen to the Chinese economy. The Chinese probably can continue to muddle through, easing interest rates again to keep things up. But we're dealing with an economy driven by capital spending, which is driven by credit, which wasn't the case until 2008. - in The Barron's Roundtable
Marc Faber : It is not that the gold price will go up. It is that the value of paper money will go down. Diversification is important, and people should put 15% to 25% of their assets in gold. - in The Barron's Roundtable
Speaker: Dr Steve Keen - Associate Professor, University of Western Sydney, and well known economist.economist Steve Keen looks at the rising national debts in Australia and the United States, paying particular attention to their historical relationship with recessions, growth and unemployment. He suggests that the levels of debt in both countries have reached a point which virtually guarantees a very difficult economic road ahead in the long term .Another reason the powers that be missed the depression is that they were lying. They knew it, but were simply afraid to admit the problem, and instead tried to talk the market up.
Marc Faber: Order, order. I haven't finished. Fraser & Neave [FNN.Singapore], in Singapore, is a conglomerate similar to Swire. It sells for 10 times earnings and yields about 3%. It could become a takeover target at some point. Lastly, I am the chairman of the India Capital Fund [an open-end fund sold outside the U.S.]. The fund and the Indian currency have been hit hard, and the fund could go lower. But the U.S. outperformed India last year on the order of 40%, and the Indian market looks attractive at 12 times earnings. As Chen Zhao at BCA Research said, in China the macro backdrop is fantastic and the micro is a disaster, but in India the macro is a disaster and the micro is fantastic. India has very good companies. The fund is overweight the banks and has a P/E of 10.
Last year I was overweight the U.S. relative to emerging economies. At what stage will the outperformance of the U.S. cease and emerging markets rise again? It could be three or six months, or a year. I am gradually increasing my exposure to emerging markets. Thai and Indian banks have no exposure to Europe. Indian banks lend domestically. - in The Barron's Roundtable
Marc Faber : But why is there leverage? It is a symptom of artificially low interest rates -- essentially zero interest rates -- that force everybody to be a speculator because you're not earning anything on your money. This volatility won't disappear anytime soon, because it has little to do with the problems in Europe and everything to do with excessive liquidity that is being created in the system. Unless there is a general collapse of liquidity -- in other words, a credit-market collapse -- the volatility will continue, perhaps for five or 10 years. It drives the small investor away from the market. He doesn't understand it. He doesn't trust Wall Street, and rightly so, and he finds the whole system corrupt and dominated by people with inside information - in The Barron's Roundtable
Marc Faber interview at the Stansberry Radio : “I’d rather lose 50% in gold than 100% in paper currencies” says Marc Faber : " ...in a democracy everybody has to blame himself to some extent for the bad conditions that exist in government in corporate governance and so forth and so on , and the same goes with the educational system , I mean people basically accepted that you pay more and more for education , the government will pay for it and so forth and in the end of the day it all goes into the administration and not into the teaching , and also we have a bubble environment essentially since the early 1990s , in a bubble environment everybody wants to essentially gamble and nobody wants to do a serious job , so what you are lacking is essentially skilled labor ,m people who can handle and look after a machine , today a machine is very sophisticated much more sophisticated than to deal with derivative products , so there is a lack of labor in that segment of the economy , highly specialized manufacturing and there is a surplus in people who went to colleges to just English or philosophy or geography or social sciences or whatever it is , that are in today's world not terribly useful ...."
Marc Faber : Ten years ago we had relatively low inflation in the Western world. Now, with interest rates at zero, we have high asset valuations. Asset prices have gone ballistic in stamps, modern art, wine, you name it. Gold, silver, other commodities, equities in emerging markets, high-end real estate -- all have done well. When assets become like cash, it may be safer to hold your money in the bank. If asset prices collapse, you'll be better off in Treasury bills with zero yields. Then the central banks will print money and bail you out. At least you'll get your principal back.
With money-printing, you never know what sector of the economy will be inflated. Maybe we have had profit inflation and there will be a severe correction. I don't expect corporate profits in the U.S. to collapse by more than 20% in the next 12 months.
Marc Faber: On another optimistic note, World War III will occur in the next five years. That means the Middle East will blow up. New regimes there will be less Western-friendly. The West has also figured out it can't contain China, which is rising rapidly and will have more military and naval power in Southeast Asia. The only way for the West to contain China is to control the oil tap in the Middle East. - in The Barron's Roundtable 2012
Marc Faber : If someone told me an asset had been in a 12-year bear market that was coming to an end, I would think about buying. Whether the end is tomorrow or in October, I'm intrigued as a long-term investor. - in The Barron's Roundtable 2012
Marc Faber Endorses Ron Paul : "I happen to believe that Mr Obama will reelected , but absence of anybody else that is much better , the republicans have not brought really anyone forward that is a desirable candidate , Ron Paul would be a great president , audit the FED and audit Fort Knox , check the gold " says Dr. Marc Faber @14:45....
Ben Bernanke: Possibility of Sudden Fiscal Crisis: Federal Reserve Chair Ben Bernanke on Thursday told a House Budget Committee that the economy is "gradually" recovering, but he expects stronger growth in 2012, than last year. Ben Bernanke: "this opportunity to discuss my views on the economic outlook, monetary policy and the challenges facing federal fiscal policymakers. over the past 2 1/2 years, the u.s. economy has been gradually recovering from a u.s. recession. while conditions have certainly improved the pace of the recovery has been frustratingly slow , particularly from the perspective of the millions of workers who remain unemployed or under employed , moreover this sluggish expansion has left the economy vulnerable to shocks , indeed last year supply chain disruption from the earthquake in Japan a surge in the price of commodities and a spill over from the debt crisis in Europe risk derailing the recovery. fortunately over the past few months, indicators of spending, production and job market activity have shown signs of improvement. the federal market committee participants indicated that they expected somewhat stronger growth this year than in 2011. the outlook remains uncertain and close monitoring of economic developments will remain necessary."
Marc Faber : My criteria , I like to buy assets that are neglected , I was recently in Arizona and previous to that I was in Canada , in Canada in the cities you have boom conditions and real estate prices are very high may be 4 to 5 times higher than Arizona , in Arizona you can buy a beautiful house for $150 000 dollars , this is undervaluation , everything has collapsed in Arizona and therefore the evaluations are very low for homes , what can you buy in Hong Kong for 150 000 dollars ? I agree that in Hong Kong there is Suzan Lee and that does not exist in Arizona that's the big difference - in Bloomberg Click here to watch the full interview >>>>>>
Marc Faber Interview Bloomberg - 02 February 2012 :
Dr. Marc Faber says that he does not use Facebook everyday , it is an amazing success story Marc Faber says but google was growing faster at the beginning he added , Facebook has say within 4 year have reach the numbers of participants that google had in 7 months , look I do not buy anything that is in the line light , Facebook is a lot of hype and so forth I think the evaluation is on the high side , I am not saying that you can't make any money , may be someone who buys at the opening who is a flipper he makes some money and so forth but it does not meet my criteria of evaluation you can put it this way , I should have bought it 4 years ago when ......I like to buy assets that are neglected
Dr. Marc Faber says that he does not use Facebook everyday , it is an amazing success story Marc Faber says but google was growing faster at the beginning he added , Facebook has say within 4 year have reach the numbers of participants that google had in 7 months , look I do not buy anything that is in the line light , Facebook is a lot of hype and so forth I think the evaluation is on the high side , I am not saying that you can't make any money , may be someone who buys at the opening who is a flipper he makes some money and so forth but it does not meet my criteria of evaluation you can put it this way , I should have bought it 4 years ago when ......I like to buy assets that are neglected
Marc Faber : IBM [IBM] is a good short. It is the back office of the world. There is room for earnings disappointment. If China implodes, the Australian dollar will go downwhill. That's another short. A third is Salesforce.com [CRM], which I recommended shorting in the June Roundtable ["Buy Low, Stay Nimble," June 13, 2011]. - in The Barron's Roundtable
Marc Faber: The world has now wasted almost nine months talking about Europe. This isn't an economic issue but a political issue. The weak countries should be kicked out of the euro and the losses taken. The longer you support countries like Greece, the more the crisis will drag on and the losses will increase. The Greeks will get more money and pretend to implement austerity, and then buy a few more BMWs. Greece's bonds need a haircut of about 90%, and even then, the country might not pay off the rest of its debt. - in The Barron's Roundtable
Marc Faber : The combination makes for a nice fruit cocktail. European governments, and the U.S. government, can sell assets, but they can't do it overnight. Governments such as Italy own large stakes in corporations. They own land. They could also tax the church once in a while, which would bring in a lot of money. That would solve all the problems of the world. - in The Barron's Roundtable
Marc Faber : It is difficult to measure economic growth because you must make so many adjustments in different industries. In the U.S., for example, housing is bottoming out. For the first time in a while, household formation is increasing. But while this segment of the economy is stabilizing, a tax break allowing companies to write off 100% of new capital expenditures has just expired. - in The Barron's Roundtable Jan 2012
Marc Faber : The Easing measures in one form or the other by the ECB or the IMF or whoever it does it should be very gold positive , but you understand the market is a discounting mechanism and gold has a huge run to its September 21st high at 1921 dollars and I think we are still in a correction period , I suppose from the peak to the low it could be 40 percent , not a prediction I am just saying it could happen and I am always telling investors don't buy gold on leverage buy it for cash then you can endure the correction and it can provide additional buying opportunity , but I think my view is the S&P peaked out May second of last year at 1370 I do not think we will exceed that high before year end and I do not think the gold price will exceed 1921 for the next 3 to 6 months - in This Week in Money Click Here for the full interview>>>>>>
Marc Faber : “Every society that went through high inflation rates, whether it was the U.S. in the 1980s or Zimbabwe or Germany, it always benefits people with a lot of assets, and people without assets are hurt. So inequality increases. That leads to a redistribution of wealth through taxation, or through social revolution it leads to poverty for everyone.” - in Edmonton Journal
Marc Faber : “With negative interest rates, your money in the bank doesn’t give you any return, and it forces people to speculate, on things like real estate, equities and government bonds,”
. “That creates bubbles. And in a bubble, the majority of people lose money, but the insiders make money.” - in Edmonton Journal
Marc Faber : as a hedge, I would own some weapons industry stocks.”
“You can’t invest based on World War III, but the tensions are rising very rapidly and I’m very concerned about this for long-term spending. Whatever happens in the Middle East, future regimes will not be as Western-friendly as the current regimes.” - in Edmonton Journal
Marc Faber : “It has never happened before that a country’s share of commodity consumption for aluminum, copper, zinc and nickel goes from 10 per cent in the year 2000 to 30 or 40 per cent in just 10 years. It’s an unbelievable change in the balance of demand for raw materials.
“A consumer-driven economy is much less cyclical than a capital-spending economy. If the Chinese economy experiences a significant slowdown, it will have a huge impact on the demand for commodities.” - in Edmonton Journal
Marc Faber : well my sense (about the market ) is I wished I could be very bullish and I wished I could be very bearish , but I can't be very bullish because nothing has changed we have incredible corruption in the system we have essentially the Wall Street dominance of lots of sectors of the economy and banking dominance where the banks go to government officials and say Oh if we are not bailed out the whole world will collapse then the politicians who are clueless they believe that when actually the easier solution would be to to reimburse local depositors and let the rest go bust , the world would not suffer if the derivative market would shrink by 90 percent believe me , the worker in an automobile plant he would not feel it but of course the bankers will feel it , the financial sector would feel it they will have to lay off a very large number of people so basically that is my concern - in This Week in Money
Marc Faber : “continuous government interventions in the free markets through mostly monetary and fiscal policies have actually, instead of smoothing out the business cycle, led to more economic and total financial volatility, and have numerous unintended and unfavorable consequences."
“When you drop the dollar bills into the system you don’t know where they go, and this time around they went to the housing market. The destructive nature of dropping dollar bills is you create bubbles in one sector of the economy.” - in Edmonton journal
Federal Reserve Chair Ben Bernanke Press Conference . The Fed expects modest pace of economic growth in coming quarters, says Fed Chairman Ben Bernanke. The housing sector is still depressed, "as indicated in the statement released earlier this afternoon to support a stronger economic recovery and to help ensure that inflation over time is at levels consistent with our statutory mandate, the committee expects to maintain a highly accommodative stance for monetary policy. in particular, the committee decided to keep the target range for the federal funds rate at zero to .25% and currently anticipates that economic conditions are likely to warrant exceptionally low levels for the federal fund's rate at least until late 2014" says Ben Bernanke
Marc Faber was asked about the risk of seeing another flash crash in the market : " Well I do not think it is regulated , my concern is no so much about the stock market going down one day by 500 points , the real crash would be like on October 1987 when the market dropped by 21 percent in one day , my concern is more , we have essentially an economic system where the financial sector has grown disproportionally large than the real economy so in other words the economy may be a square mile and on top of that you pile up derivatives and all kind of instruments that are thousands of square miles and one day this whole derivatives bubble will burst - in This Week in Money Click Here for the full interview>>>>>>
Marc Faber : I suppose that 99 percent of high frequency programs are essentially momentum players in other words when times will start to move up in an asset class or in a stock or in a sector or the stock market the computer model says BUY then they all buy and it pushes up prices and then when for one reason or another the market turns and the models say sell they'll all sell basically at the same time that's why we have a very high volatility that's why - in This Week in Money Click Here for the full interview>>>>>>
Marc Faber : Relative to government bonds, equities are attractive. If you really think it through and you are bearish as I am and you think the whole financial system will one day collapse, maybe three years or five years or 10 years, one day there'll be a reset and everything will be essentially started anew. Then you are better off in equities than in government bonds because a lot of government bonds will either default or they will have to print so much money that the purchasing power of money will depreciate very rapidly. in Bloomberg Television
Marc Faber : " I wouldn't say that they are (the stocks) particularly attractive , look i am in Switzerland at the moment the ten years government bond yield is 0.7 percent and you can buy quality companies like Nestle Novartis and so forth and they have a dividend yield of say 3 percent , so relative to government bonds equities are attractive , and if you really think it through and you are as bearish as I am , and you think the whole financial system will eventually collapse we do not know in three years or five years or ten years but one day there will be a reset and everything will essentially be started anew then you're better off in equities than in government bonds because a lot of government bonds will either default or they will have to print so much money that the purchasing power of money will depreciate very rapidly "
Marc Faber : Well I like it (Gold) yes , but I think the correction is not over yet , we had a big correction from the peak on September 6th when gold hit 1929 dollars we went down to around 1522 dollars at the end of December now we've rebounded over 1600 , I think we can have another leg down
if I were an investor or a saver I would buy (Gold) every month a little bit and not everything at the same time - in Fox Business News Click here to watch the full interview >>>>>
Marc Faber : well I think that eventually you want to be positioned more in equities than say government bonds and you want to own some precious metals as well - in Fox Business News Click here to watch the full interview >>>>>
Dr. Marc Faber Interviewed by Bloomberg TV - 20 January 2012 : " I wouldn't say that they are (the stocks) particularly attractive , look i am in Switzerland at the moment the ten years government bond yield is 0.7 percent and you can buy quality companies like Nestle Novartis and so forth and they have a dividend yield of say 3 percent , so relative to government bonds equities are attractive , and if you really think it through and you are as bearish as I am , and you think the whole financial system will eventually collapse we do not know in three years or five years or ten years but one day there will be a reset and everything will essentially be started anew then you're better off in equities than in government bonds because a lot of government bonds will either default or they will have to print so much money that the purchasing power of money will depreciate very rapidly "
Marc Faber : in general I would say the news follows events in other words the downgrades were already discounted by the bonds markets in Europe and when the news came out it had no impact actually the market was kind of relieved , it's like when a war break out if prior to the war the market has already discounted it went down strongly then on the war news the market then shoots up , on the other hand if some event happened completely unexpectedly the market can sell off , but in general I think now in Europe the bad news has been now largely discounted and the market participants they think that the problems cannot be resolved but they can be postponed , which involves essentially money printing either directly or through backdoor measures ....- in Fox Business News Click here to watch the full interview >>>>>
Marc Faber : "You could have strong asset markets. Commodities or metal prices could go up. In my view I think that equity markets have to a large extent already discounted some very bad news," - in CNBC
Marc Faber: "I`m negative about the outlook for the world because we are trying to solve the crisis created by excessive debt growth and excessive leverage with even more credit and leverage, which will just postpone the problem,- in CNBC
Marc Faber : "If we look at US government debt, it reached USD 1 trillion in 1980 and in the year 2000 we were at USD 5 trillion. So between 2000 and 2011 we've grown three times and the expansion of the debt will continue," - in CNBC
Marc Faber : "My view is simply: relax. I don't think that equities will collapse. I think we have major support going back to August 2010 when the S&P was at 1010,"
"We have a lot of support around 1100, and if the S&P drops 200 points, I guarantee you the Fed will come in with QE3 and QE4 and so forth,"
Marc Faber interviewed by This Week in Money on What's next for markets? "my view is they can postpone the problems and the market may rally for a while , I doubt it will make any new highs , and I doubt that it will really benefit the typical household and the lower income group recipient but it will do some good for stock prices and they'll overshoot again and then there will be another decline " "we are in extremely volatile times " says Marc Faber
Jim Rickards gives valuable insight into the current economic conditions and talks about the role he thinks the IMF and its global SDR will play in the years to come, and if the latest bailout 600 billion euro Italian bailout rumor may be just the opportunity for the IMF to step up as a player in the global currency war.James G. Rickards is the author of the book : Currency Wars. The making of the next global crisis.James Rickards advocates for a return to the gold standard in his book "currency wars," Jim Rickards compares the current economic climate to that of the 1930's and he briefly mentioned the Weimar republic and how their stock market had an initial strong rally due to the money printing.
John Williams from Shadow Government Statistics : No Way Out–Hyperinflation by 2014 . John sees no way to avoid hyperinflation, as some of the warning signs are getting worse: rising real inflation rates, massive Fed monetization, foreign nations dumping dollars, and the US losing its triple A credit rating.
John Williams is author of “Shadow Government Statistics,” an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net of financial-market and political hype. john williams shadowstatscom Mining Stock Talk Interviews John Williams of ShadowStats.com ."John Williams’ Shadow Government Statistics" is an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net of financial-market and political hype.
In this powerful interview, John shares his research realities on unemployment, the staggering growth in the U.S. Monetary Base, a coming “hyperinflation” , gold, and what he’s doing to prepare and protect his family going forward.
Williams believes that the printing of trillions of dollars to fight the depression will lead to a "hyperinflationary depression".
John Williams aka Walter J. "John" Williams was born in 1949. He received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies.
John Williams' Shadow Government Statistics is a monthly electronic newsletter that exposes and analyzes the flaws in current U.S. government data and reporting, as well as in certain private-sector numbers.. It also looks at the financial markets free of the hype so often put forth in the popular financial media. Generally published on the second Wednesday of the month, the newsletter is supplemented by Flash Updates and occasional Alerts that highlight unusual developments.
Williams is advising people to stock up on gold and booze to bargain with once the hyperinflation makes dollars worthless:
“Three or four years into the future I think we could be in a hyperinflation, within the current year you’re going to see much higher inflation than most people are looking at,” Williams told MarketWatch.
Williams said that his definition of hyperinflation would be a situation in which a $100 dollar bill would become more functional as a piece of toilet paper than a store of value.
“This is a time when you want to preserve your wealth and assets because inflation will knock the value out of it,” he added, advising that people buy physical gold and assets other than the U.S. dollar.
“Then when the hyperinflation hits you’ll see disruption of normal commerce, you won’t have enough $100 dollar bills to buy what you want,” said Williams, adding that items to barter with, such as a bottle of scotch, would be more valuable than actual cash, even in large quantities.
Marc Faber : "You could have strong asset markets. Commodities or metal prices could go up. In my view I think that equity markets have to a large extent already discounted some very bad news," - in CNBC
Marc Faber : "I`m negative about the outlook for the world because we are trying to solve the crisis created by excessive debt growth and excessive leverage with even more credit and leverage, which will just postpone the problem," - in CNBC
Marc Faber : "If we look at U.S. government debt, it reached $1 trillion in 1980 and in the year 2000 we were at $5 trillion. So between 2000 and 2011 we’ve grown three times and the expansion of the debt will continue,"
Marc Faber : "My view is simply: relax. I don’t think that equities will collapse. I think we have major support going back to August 2010 when the S&P was at 1010," in CNBC interview 19 January 2012
Marc Faber : .....I think what's happened through back door actions the ECB is already monetizing.Because if the ECB wasn't already monetizing, then the euro would be strong. they have increased their balance sheet and so forth. so I think that much of any downgrade is already priced in. the question is whether the downgrades will be sufficient. In my opinion, most of the European countries should be CCCs. and the U.S. should not be a AAA minus, but a BBB or a junk fund when you realize the unfunded liabilities that are coming to you in the future. - in CNBC
Marc Faber : “World War III will occur in the next five years. That means the Middle East will blow up. New regimes there will be less Western-friendly. The West has also figured out it can't contain China, which is rising rapidly and will have more military and naval power in Southeast Asia. The only way for the West to contain China is to control the oil tap in the Middle East”
“It (the war) is very positive for stocks and negative for bonds, because debt will grow dramatically”, - In a recent interview with The Barron's financial magazine
Marc Faber : "I question any number that is published by governments, not just in China, everywhere in the world,"
"We have huge excesses, we have excessive credit growth in China and the excesses and the misallocation of capital — in my opinion — will become only worse," - in CNBC
Dr .Marc Faber : of the Gloom Boom and Doom report believes there will be a QE3 in America and more Quantitative Easing in Europe too , "in general I would say the news follow events in other words the downgrades were already discounted by the bonds markets in Europe and when the news came out it had no impact actually the market was kind of relieved says Marc Faber ....
Marc Faber : well, i think companies like Novartis Nestle Total are reasonably good value. i mean, they're not compelling values, but you understand with zero interest rate, it's very difficult to value anything. and anything that has a dividend yield of 3% compared to 0% interest rate is relatively attractive. and i believe in the world the central banks will keep interest rates below the rate of inflation. in other words, what you will have is negative real interest rates for essentially as far as the eye can see. and in that environment you want to be in real estate and equities and you want to be in precious metals.
- in CNBC
Marc Faber : Well basically European stock markets last year were down between 15% and 30% depending on the market. and European stocks grossly underperformed the u.s. -- I mean the whole world grossly underperformed the u.s., which actually in 2011 performed reasonably well. the u.s. was flat on the year. and the utilities index was up. but the other markets in the world, emerging markets and European markets were very weak. now, I believe that sometimes in 2012 the outperformance of the u.s. of the other markets will cease , and you have to move back into quality companies in Europe and into emerging economies.
- in CNBC
Marc Faber : I think what might move the market if some countries say we had enough. we exit the Euro. and if Greece starts that, it's not going to be a disaster. but if Greece, Portugal, Spain and Italy do it, then it will have a huge impact. but don't ask me exactly what the impact will be because if at the end of the day only strong countries are in the euro zone, maybe the euro will sink them. but huge problems will arise in the derivative market and obviously the countries that will be in the euro zone they will default
- in CNBC
Marc Faber : yes, i suppose so. but at the same time the European corporate sector has of course a lot of u.s. dollar debt. and that makes it more expensive to service these debts.
- in CNBC
Marc Faber: I don't think it will matter much (the S&P downgrades ). it will matter to the value of the euro. and i think the euro is basically in a down trend. having said that, the short positions in euros are very large. and you could countertrend rally maybe we're now around 126.50. uh-huh. maybe we can rebound to around 130 against the u.s. dollar. but i think the trend for the euro is down - in CNBC
Marc Faber : The worse the news gets, the more the U.S. and the European Central Bank and China will print money.
In the past 10 years gold and silver have performed superbly. The gold price overshot on the upside when it reached $1,921 an ounce on Sept. 6. Now it is in a correction phase and could fall another $200.
It is not that the gold price will go up. It is that the value of paper money will go down. Diversification is important, and people should put 15% to 25% of their assets in gold.
Marc Faber : in my opinion, it's insufficient. but, you know, different people have different view. I wouldn't buy any french government bonds. and I wouldn't buy u.s. government bonds here either. but I admit that last year to the surprise of most fund managers 30-year u.s. treasury bonds gave you a return of 30% per annum . so you have a huge move in treasury yields on the downside. and so you had a tremendous capital appreciation on the bonds. and the 10-years appreciated by more than 10%. and I was kind of wrong about this. but I admit I just wouldn't buy them as a long-term investment.
Marc Faber : well, I personally ... I am not interested in Sovereign Bonds except as a trade, but i think longer term you're going to lose money on sovereign bonds.
Marc Faber : .....I think what's happened through back door actions the ECB is already monetizing.Because if the ECB wasn't already monetizing, then the euro would be strong. they have increased their balance sheet and so forth. so I think that much of any downgrade is already priced in. the question is whether the downgrades will be sufficient. In my opinion, most of the European countries should be CCCs. and the U.S. should not be a AAA minus, but a BBB or a junk fund when you realize the unfunded liabilities that are coming to you in the future. - in CNBC
Legendary Investor Marc Faber, editor and publisher of the Gloom, Boom & Doom Report, discusses the S&P downgrade of France and other European countries. He believes they should be downgraded even further.
Marc Faber : "...yes. because the market has already downgraded some of the sovereign issues. and I think when the news will come out it will be old news. so it won't have an impact on the market. but having said that, the market has had a huge rally from the October 4th low when the S&P was at 1,074. and it's now over bought and the volume figures were
very poor the advanced decline line wasn't particularly good. every day we have some stocks that are breaking down. this is not typical of an emerging bull market. it's rather typical of a rebound within a bear market"
In This interview with the German TV DAF dated 10 January 2012 (in German ) Dr. Marc Faber says that most banks are basically insolvent.That he likes stocks over bonds, thinks that the March lows won't be hit again, dislikes technology stocks and sees some 10% down potential. 2012 is going to be very volatile. When stocks fall, central banks will print money.
Marc Faber: .....Now when I tell people in America that real estate is now relatively inexpensive, relatively compared to other asset classes, they look at me as if I am coming from the moon. But four years ago they were buying real estate like crazy and if you told them that real estate is in a bubble, they would not have believed it. I think now that time is coming to allocate some money to real estate and with the 25% cash you just wait until there is a great big break either in stock or in gold. And then you add to positions. And I am also recommending to have allocations to income producing investments in the sense that if you have dividend paying stocks and in the U.S. stocks do not have a high yield, but say in Asia, I can still provide you a portfolio that have equities that will yield between 5% and 7%. But with that kind of a yield, you have a cash flow and you can reinvest your dividends. So in the long run you should be okay. But then again, not only about gold do I have a concern, I also have a concern, generally speaking, about our capitalistic system. For sure, people with assets, they will be taxed more heavily, that is for sure.
Global Risks Report 2012 - Launch of the World Economic Forum Global Risks 2012 report on 11 January 2012 in London.Economic imbalances and social inequality risk reversing the gains of globalization, warns the World Economic Forum in its report Global Risks 2012.
Mohamed El-Erian : He (Joseph Stiglitz) is right in the sense that the muddled middle which is where Europe has been is no longer sustainable. The crisis that started in the outer periphery - Greece - not only has shifted to the inner periphery and the outer core - Spain and Italy - but it has also impacted FRANCE. Which is the inner core. Europe has to make a choice if it wants to save the euro. One choice is full fiscal union and the other is a smaller Eurozone. That is a political decision Germany must take.
Mohamed El-Erian : Chairman Bernanke has said there are benefits and costs and risks. That balance is shifting from benefits to potential costs and risks. If they did QE3 there would get some benefits but also quite a few distortions and collateral damage put into the system that could take us years to overcome. You will see pressure on the currency and the functioning of the markets. More and more non-commercial forces will be determining market outcomes [Amazing]
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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