I believe that the economic recovery will be relatively dissapointing with the government sector expanding. Its basically the government sector that is creating jobs and the private sector is hardly creating any jobs.
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.
30 June, 2009
Bloomberg TV Interview
Latest Marc Faber interview on Bloomberg TV.
Topics: stock market, commodities, gold, public sector intervention, economic recovery, US Dollar, US Bonds.
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.
29 June, 2009
Monetary Injections Will Keep Markets Away From New Lows
We must likely have seen a major low on March 6th when the S&P hit 666 and here in Asia most markets really bottomed out in October and November of last year.
Lets say that for one reason or another the S&P which went to 956 and is now at around 920, drops to 800. I am sure that there will be another stimulus package and another massive monetary injection. And if it does not help then we will have another round when the S&P drops to 700. So I don`t think we will see new lows.
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.
Lets say that for one reason or another the S&P which went to 956 and is now at around 920, drops to 800. I am sure that there will be another stimulus package and another massive monetary injection. And if it does not help then we will have another round when the S&P drops to 700. So I don`t think we will see new lows.
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.
28 June, 2009
Reversal Of Expectations Will Send Markets Lower
Maybe we will have for two or three months now a reversal in expectations, where people suddenly realize that maybe the economy doesn't recover a lot and that deflationary pressures are still there. But if the S&P was to come down to 800 or 750, the Fed would probably increase its money printing activity. So, I kind of doubt that we'll see new lows.
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.
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.
27 June, 2009
Inflation Will Shift Wealth From Workers To Rich People
The devious thing about inflation, if we define it as money and credit growth, is that it touches different asset prices at different times with different intensity. You can have for one year a huge increase in the price of gold and then the next year you could have a huge increase in the price of real estate and the next you could have an increase in silver or agricultural commodities, and the next year in wages or stock prices.
You just don't know exactly which one will do the best. It's a very tricky environment, and it favors large speculators and the people who are close to the government. It shifts wealth from the middle class and workers to rich people, as has happened over the last 25 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.
You just don't know exactly which one will do the best. It's a very tricky environment, and it favors large speculators and the people who are close to the government. It shifts wealth from the middle class and workers to rich people, as has happened over the last 25 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.
26 June, 2009
Latest Interview: Risk/ Reward Not Favorable For Stocks
Dr. Marc Faber, the Thailand-based editor and publisher of The Gloom Boom & Doom Report, favors stocks only as the least of all evils.
Q: How high can the market go before, if I read your work correctly, America falls apart and takes everything down with it?
A: I'm not sure that the risk/reward now is particularly favorable. The inflationary school of thought says the Federal Reserve has no other option but to print money, and that will lift asset prices. The Standard & Poor’s 500 could get to 1,000 or 1,100 or depending on how much money they print, possibly even higher than that.
Between March and today, the S&P is up 40%, and in an environment of zero interest rates, that's a huge gain. Many of the resource stocks we were recommending in November and December have tripled. So, maybe we have for two or three months now a reversal in expectations, where people suddenly realize that maybe the economy doesn't recover a lot and that deflationary pressures are still there. But if the S&P was to come down to 800 or 750, the Fed would probably increase its money printing activity. So, I kind of doubt that we'll see new lows.
Q. You've warned that US risks Zimbabwe-style hyperinflation and then more recently said US inflation could reach 10% to 20% in five to ten years. Isn't there a big gap between those outcomes?
A. We have the worst recession since the Second World War and actually the prices of necessities are still rising, including food and energy. So, one day within the next ten years, when the economy slowly recovers and when further dollar weakness occurs, inflationary pressures will increase. And once you have inflation increasing, it's not easy to stop it unless you implement tight monetary conditions, which would imply very high real interest rates. And I don't think that Mr. Bernanke or the US government have any intention whatsoever of having positive real interest rates. Combine easy monetary policies with large fiscal deficits, and the likelihood of much higher inflation is there. Once we go to 10% inflation, 20% becomes quite likely and once we go to 20%, we can easily go into hyperinflation.
Q. If the largest economy in the world is at risk of hyperinflation, shouldn't people be selling everything and hoarding gold and silver?
A. For sure, gold is better than cash. But the devious thing about inflation, if we define it as money and credit growth, is that it touches different asset prices at different times with different intensity. And so, you can have for one year a huge increase in the price of gold and then the next year you could have a huge increase in the price of real estate and the next you could have an increase in silver or agricultural commodities, and the next year in wages or stock prices. You just don't know exactly which one will do the best. It's a very tricky environment, and it favors large speculators and the people who are close to the government. It shifts wealth from the middle class and workers to rich people, as has happened over the last 25 years.
Q. You've been bullish on Asia and in particular on Asian banks and Asian real estate, and yet the attitude of Asian central bankers doesn't seem to be materially different from that of the Fed. How does it feel to be invested in assets that are appreciating based on the same Keynesian policies?
A. I don't like Fed policy and I don't like the policy of the Bank of Thailand. But I have to live with it. I'm an investor, and so rather than holding cash in a Thai bank at zero interest rates, I'm investing in equities. But it is not because I have great conviction that anything is healthy. I'm investing in equities because I think that the whole world is basically [in trouble.] The worse the conditions will be, the more they will print money. I can buy in Thailand a basket of equities that will give me a dividend yield, after tax, of 5% to 6%. So at least I'm paid to wait. I would buy Asia on a correction.
Q. Why is Europe so out of favor with international investors?
A. In 2008, the most cyclical economies got hit the hardest. And so, because of the cyclicality, Europe and Japan fell out of favor. Whoever bets on the economic recovery should bet on the most cyclical industries and the most cyclical countries. That would be Japan, southeast Asia, resource producers, and obviously Europe, because they have a high dependence on exports, particularly Germany.
Q. But you don't sound terribly committed to that proposition in the short run.
A. When the market [perceives] that we've fixed the bottom in economic activity and it's growing again, then they can push up stock prices as they have done after March. But it doesn't mean that the global economy will revisit the peak of prosperity we had in 2006-07. That may be a long way away. But you can have a big bounce within the context of a bear market. So, I think that the markets still have a chance to go up, especially given the money-printing attitude not only of the Fed but of all central banks.
Q. You've lampooned President Obama as "the Great Obutu" and called him a commissar, and you've been critical of the Fed's leadership as well. Would it be fair to say you're contemptuous of American policies and American leadership at the moment?
A. I think that's a fair comment. I'm disgusted by the kind of crony capitalism that has emerged in the United States where the doors of the Federal Reserve, of the US Treasury, of the Wall Street establishment are all open to each other. The economic policy of the US since 1982 has been to stimulate consumption. But you can't create prosperity from consumption—you need savings and capital spending.
Q. Thank you.
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.
Q: How high can the market go before, if I read your work correctly, America falls apart and takes everything down with it?
A: I'm not sure that the risk/reward now is particularly favorable. The inflationary school of thought says the Federal Reserve has no other option but to print money, and that will lift asset prices. The Standard & Poor’s 500 could get to 1,000 or 1,100 or depending on how much money they print, possibly even higher than that.
Between March and today, the S&P is up 40%, and in an environment of zero interest rates, that's a huge gain. Many of the resource stocks we were recommending in November and December have tripled. So, maybe we have for two or three months now a reversal in expectations, where people suddenly realize that maybe the economy doesn't recover a lot and that deflationary pressures are still there. But if the S&P was to come down to 800 or 750, the Fed would probably increase its money printing activity. So, I kind of doubt that we'll see new lows.
Q. You've warned that US risks Zimbabwe-style hyperinflation and then more recently said US inflation could reach 10% to 20% in five to ten years. Isn't there a big gap between those outcomes?
A. We have the worst recession since the Second World War and actually the prices of necessities are still rising, including food and energy. So, one day within the next ten years, when the economy slowly recovers and when further dollar weakness occurs, inflationary pressures will increase. And once you have inflation increasing, it's not easy to stop it unless you implement tight monetary conditions, which would imply very high real interest rates. And I don't think that Mr. Bernanke or the US government have any intention whatsoever of having positive real interest rates. Combine easy monetary policies with large fiscal deficits, and the likelihood of much higher inflation is there. Once we go to 10% inflation, 20% becomes quite likely and once we go to 20%, we can easily go into hyperinflation.
Q. If the largest economy in the world is at risk of hyperinflation, shouldn't people be selling everything and hoarding gold and silver?
A. For sure, gold is better than cash. But the devious thing about inflation, if we define it as money and credit growth, is that it touches different asset prices at different times with different intensity. And so, you can have for one year a huge increase in the price of gold and then the next year you could have a huge increase in the price of real estate and the next you could have an increase in silver or agricultural commodities, and the next year in wages or stock prices. You just don't know exactly which one will do the best. It's a very tricky environment, and it favors large speculators and the people who are close to the government. It shifts wealth from the middle class and workers to rich people, as has happened over the last 25 years.
Q. You've been bullish on Asia and in particular on Asian banks and Asian real estate, and yet the attitude of Asian central bankers doesn't seem to be materially different from that of the Fed. How does it feel to be invested in assets that are appreciating based on the same Keynesian policies?
A. I don't like Fed policy and I don't like the policy of the Bank of Thailand. But I have to live with it. I'm an investor, and so rather than holding cash in a Thai bank at zero interest rates, I'm investing in equities. But it is not because I have great conviction that anything is healthy. I'm investing in equities because I think that the whole world is basically [in trouble.] The worse the conditions will be, the more they will print money. I can buy in Thailand a basket of equities that will give me a dividend yield, after tax, of 5% to 6%. So at least I'm paid to wait. I would buy Asia on a correction.
Q. Why is Europe so out of favor with international investors?
A. In 2008, the most cyclical economies got hit the hardest. And so, because of the cyclicality, Europe and Japan fell out of favor. Whoever bets on the economic recovery should bet on the most cyclical industries and the most cyclical countries. That would be Japan, southeast Asia, resource producers, and obviously Europe, because they have a high dependence on exports, particularly Germany.
Q. But you don't sound terribly committed to that proposition in the short run.
A. When the market [perceives] that we've fixed the bottom in economic activity and it's growing again, then they can push up stock prices as they have done after March. But it doesn't mean that the global economy will revisit the peak of prosperity we had in 2006-07. That may be a long way away. But you can have a big bounce within the context of a bear market. So, I think that the markets still have a chance to go up, especially given the money-printing attitude not only of the Fed but of all central banks.
Q. You've lampooned President Obama as "the Great Obutu" and called him a commissar, and you've been critical of the Fed's leadership as well. Would it be fair to say you're contemptuous of American policies and American leadership at the moment?
A. I think that's a fair comment. I'm disgusted by the kind of crony capitalism that has emerged in the United States where the doors of the Federal Reserve, of the US Treasury, of the Wall Street establishment are all open to each other. The economic policy of the US since 1982 has been to stimulate consumption. But you can't create prosperity from consumption—you need savings and capital spending.
Q. Thank you.
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.
24 June, 2009
Video Interview - Prison Planet
Latest Marc Faber video interview, June 23, 2009.
Marc Faber talks with PrisonPlanet.com about the world economy, the stock market, currencies and commodities.
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.
22 June, 2009
We Will Have Very High Inflation In America
Lets break down the economic history of America in two periods. The first period , from 1800 to 1930, when the price level was stable and actually moderately falling. We had a deflationary boom in that period. The United States had 4 million people in 1800 and in 1910 it already had 90 million inhabitants. In this period we had the entire industrialization of the US, the construction of railroads, electricity, the first cars, the first airplanes and so forth under a stable price level.
Then the introduction of the Federal Reserve in 1930 and since then the US dollar has lost 95% of its purchasing power. We already had a lot of inflation. And if it took 100 years to lose 95% of its value, I think that the next 95% loss in purchasing power will be very quick.
In every society when you have large fiscal deficits combined with easy monetary policies, that was the case in Latin America after the petrodollar crisis in 1981, the likelihood that you will have high inflationis very, very high. And it happens relatively quick. If you look to the German hyperinflation in the 1919-1923 it happened in 4 years. I am not saying it will happen in 4 years in America, but we could easily see rates of inflation (if measured properly, because the governement is understating the true rate of inflation massively)of 10 to 20% in 5 to 10 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.
Then the introduction of the Federal Reserve in 1930 and since then the US dollar has lost 95% of its purchasing power. We already had a lot of inflation. And if it took 100 years to lose 95% of its value, I think that the next 95% loss in purchasing power will be very quick.
In every society when you have large fiscal deficits combined with easy monetary policies, that was the case in Latin America after the petrodollar crisis in 1981, the likelihood that you will have high inflationis very, very high. And it happens relatively quick. If you look to the German hyperinflation in the 1919-1923 it happened in 4 years. I am not saying it will happen in 4 years in America, but we could easily see rates of inflation (if measured properly, because the governement is understating the true rate of inflation massively)of 10 to 20% in 5 to 10 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.
20 June, 2009
United States Is Headed Toward Hyperinflation
The US is headed toward hyperinflation, and within five to 10 years it could have inflation rates of 10 to 20 percent.
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.
Large Fiscal Deficits And Monetary Policy Will Lead Us To High Inflation
"In every society, when you have large fiscal deficits combined with easy monetary policies … the likelihood that you will have high inflation is very, very high. And it happens very quickly.
These numbers rise so speedily because the government massively understates the country's rate of inflation, Faber said. To get a true reading, he said, people need to ditch core inflation numbers and include CPI in their analysis.
"It’s a lie what they publish. If you underweigh education costs, and if you underweigh health care costs, then you come to a totally different result." CNBC, 19 June, 2009
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.
These numbers rise so speedily because the government massively understates the country's rate of inflation, Faber said. To get a true reading, he said, people need to ditch core inflation numbers and include CPI in their analysis.
"It’s a lie what they publish. If you underweigh education costs, and if you underweigh health care costs, then you come to a totally different result." CNBC, 19 June, 2009
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.
12 June, 2009
Today`s Markets Are Relapsing Alcoholics
"Marc Faber, Hong Kong-based publisher of the Gloom, Boom & Doom report, rarely misses an opportunity to compare today’s markets to a relapsing alcoholic, and central banks to irresponsible bartenders. To dole out more booze, as monetary officials have been doing, is the wrong medicine." in Bloomberg, June 12 2009
09 June, 2009
Big Risk In Stocks Right Now
"This is a high risk entry point for equities." Marc Faber
"Long term the dollar will be a weak currency but there is a lot of volatility and in the short term it can go either way" Marc Faber
"As a trader I would prefer to short India then buy it" Marc Faber
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.
05 June, 2009
Japan May Outperform Other Markets
Japan may outperform other markets over five years, Marc Faber, the investor who publishes the Gloom, Boom and Doom report, said in an interview with Bloomberg Television in Hong Kong. “Of all the regions in the world, Asia is still the most attractive by far.”
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.
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.
03 June, 2009
Natural Gas Is The Most Undervalued Commodity
Natural Gas is the most “undervalued” commodity, investor Marc Faber said in an interview with Bloomberg Television on May 27.
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 and is the Publisher of the "Gloom, Boom and Doom Report".
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 and is the Publisher of the "Gloom, Boom and Doom Report".
02 June, 2009
Using Technical Analysis
I use a lot of technical indicators and I look for divergences. I look for overbought, oversold conditions to make near term judgements. So I don`t think its just one indicator that I pay attention to. I also pay attention to a lot of different technicians that help me make up my views about the markets. At the same time I would not make a major investment decision based only on technical factors.
If I get an analyst report and it tells me something about a sector or a company and I look up the charts and see that both are attractive then I have higher confidence in making the investment.
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.
If I get an analyst report and it tells me something about a sector or a company and I look up the charts and see that both are attractive then I have higher confidence in making the investment.
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.
01 June, 2009
Disconnection In The Stock Market
Ocasionally you can have stock markets moving up very strongly in nominal terms and having a disconnection with the real economy. In other words, the real economy in the world, I don`t think it will go back to the 2006 and 2007 prosperity levels, but the market could go up, theoretically making new highs if you print enough money.
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.
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.
Subscribe to:
Posts (Atom)