What you find in the world is an unnusual situation. The international reserves have grown from 1 trillion dollars in 1996 to over 8 trillion dollars at the present time. Most of it are held by emerging economies like China, India, Russia, Brazil and so forth. Over 70% of reserves of international reserves are in Asia including Japan.
So, what you have is basically in emerging economies, they have relatively low debt to GDP ratios and in most emerging economies their mortgage market has hardly developed. People buy homes for cash. There is no mortgage market.
Whereas in the developed world, what we have is an overleveraged consumer and governments that have liabilities that cannot meet in the long run. So something will break. And I think in the next 10 years, we will have a lot of defaults. now before the United States, the UK or Eurozone members default on their debt obligations, they will print money. And then we will get very high inflation rates.
in Bloomberg Asia
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.
