When the S&P bottomed in March, the dollar was weak, notes Faber, who expects the next few months will be a period of dollar recovery and “a correction time in asset markets” as the dollar strengthens. “The strong dollar means global liquidity tightening,” Faber told CNBC.
“In a scenario where growth will be disappointing, I think emerging markets will be kind of vulnerable.” The worse the global economy, the more stocks could go up, Faber says, because the world’s central bankers have become nothing more than money printers. “They’re dangerous to the health of the global economy,” Faber says. “They created the Nasdaq bubble, the housing bubble, and now they want to create another bubble to bail them out.”
Financial crises, Faber points out, usually lead to some fundamental change that purges the excesses that went before. But, he says, the Obama administration chose instead to bail out financial firms at the taxpayers’ expense, leaving the country vulnerable to a bigger crisis in the next few years.
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.
