Marc Faber : The Corona Virus could create a Severe Recession

Last month, I opined that, a severe coronavirus pandemic could tilt the global economy into recession and that therefore, it would be favorable for US Treasuries. Over the last twelve months, the long-term Treasury ETF (TLT) is up 30% and year-to-date 13%. By comparison, the S&P 500 Index is up 6% over the last twelve months, and is down 8% in 2020. US Treasuries remain inexpensive compared to European sovereign bonds and they are a great hedge against a further stock market decline. Near-term, Treasuries are very overbought but I continue to hold them because of my belief that the Coronavirus will tilt the global economy into a serious deflationary recession/depression. In recent reports I have explained that I was reducing my equity exposure to around 20% of assets and increasing my cash holdings. I want to warn my readers not to be complacent. If the Coronavirus is going to be as bad as I believe it will be, I would not be surprised if all asset prices declined. Most importantly, I suspect that the Coronavirus could be the event that pricks the monetary-inflationary credit bubble for good, depresses all asset prices, leads to severe economic hardship, and destroys central bankers. Lastly, remember the words of the late Leon Levy: “For most people, the most dangerous self-delusion is that even a falling market will not affect their stocks, which they bought out of a canny understanding of value.”


















Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.