The US Deficit Cannot Be Cut

"The (US) deficit, in my opinion, mathematically, cannot come down, because 80% of the budget is mandatory expenditures, in other words, you cannot cut them. Legally, they have to be met." - in zerohedge

Related: ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT) , iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT), iShares Lehman 7-10 Yr Treas. Bond (ETF) (NYSE:IEF)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The Markets Had A Fantastic Run

We didn’t have a decent run, we had a fantastic run. The S&P has doubled, and in emerging markets we have price increases that are far better than a doubling of the indices.

In general, emerging economy stock markets since 2003 have way outperformed the S&P. So we had unbelievable moves in markets. In the U.S. we only had on two previous occasions a move such as we had in the last 27 months from 666 on the S&P to over 1300, and that was in 1934, coming off a major low when the market had declined by 90% between 1929 and 1932, and then another move into between 1934 and 1937, and that was then followed by renewed extreme weakness in the markets.

So stocks have done fantastically well, and I was fortunate to be relatively positive about
equities between October 2008 and March 2009. But if someone had asked me, “Do you think the S&P will double?” I would not have expected a doubling. I would have thought the market would rebound, maybe by 40-50%, but not a doubling.

The markets in the world, between March 2009 and today, have done actually much better than anybody had expected. Starting in November 2010, the American market started to weaken, and I think that we have just begun a more significant correction in the U.S., whereby I expect the fact that international investors over-weighted the American economic stock market until recently, and under-weighted the U.S., and now money is flowing back into the U.S. I think emerging stock markets will go down further, but I would probably just stay out of the U.S. - in zerohedge

Related: SPDR S&P 500 ETF (NYSE:SPY), ProShares UltraShort S&P500 (ETF) (NYSE:SDS), iShares Russell 2000 Index (ETF) (NYSE:IWM), iPath MSCI India Index ETN (NYSE:INP), WisdomTree India Earnings Fund (ETF) (NYSE:EPI), iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI), Market Vectors Vietnam ETF. (NYSE:VNM), iShares MSCI Emerging Markets Indx (ETF) (NYSE:EEM) , Market Vector Russia ETF Trust (NYSE:RSX), iShares MSCI Brazil Index (ETF) (NYSE:EWZ), Caterpillar Inc. (NYSE:CAT) , Deere & Company (NYSE:DE)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Not To Own Any Gold Is To Trust The U.S. Government

“The only true currencies that exist today are gold, silver, platinum, and palladium. Not to own any gold is to trust the U.S. government, trust that they will ever balance the budget again.” - in Beacon Equity

Related: SPDR Gold Trust (ETF) (NYSE:GLD), iShares Silver Trust (ETF) (NYSE:SLV), Market Vectors Gold Miners ETF (NYSE:GDX)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

My Main Concerns

"My main concerns are China and political tensions. I think that not all is well in China. If the Chinese economy slows down more then what analysts expect, we could have a downdraft in commodity prices and all the warrants on China — whether it is Brazil, Australia or Indonesia — would get hit quite hard." - in CNBC

Related: iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI), iShares MSCI Brazil Index (ETF) (NYSE:EWZ) , iShares MSCI Australia Index Fund (ETF) (NYSE:EWA)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The US Public Debt Stands At 4 Times The Size Of Its Economy

“The US will want to keep a low interest rate and expand the money supply to ease the public debt that stands at four times the size of its economy." - in www.commodityonline.com

Related: ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT), iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT), iShares Lehman 7-10 Yr Treas. Bond (ETF) (NYSE:IEF)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The US Stock Market Will Eventually Join The Emerging Markets On The Downside

"The US stock market has now doubled from its low. In other words, there are only three occasions in the last hundred years when the stock market in the US doubled within two years.

One such occasion was in 1934, coming off a very deeply oversold condition in 1932 and the other one was in 1937. After 1937 and 1934, the 12 months return were both negative.

I would be a little bit careful here to just buy the US because investor sentiment is very positive. The volume has been relatively sluggish and the market is extremely overbought by any statistical model.

My view is that the US market will eventually join the emerging markets on the downside because if you take a bearish view about emerging economies, you cannot be too optimistic about the US because for many US corporations, 50 percent or more of their profits come from emerging economies." - in CNBC

Related: SPDR S&P 500 ETF (NYSE:SPY), ProShares UltraShort S&P500 (ETF) (NYSE:SDS), iShares Russell 2000 Index (ETF) (NYSE:IWM), iPath MSCI India Index ETN (NYSE:INP), WisdomTree India Earnings Fund (ETF) (NYSE:EPI), iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI), Market Vectors Vietnam ETF. (NYSE:VNM), iShares MSCI Emerging Markets Indx (ETF) (NYSE:EEM) , Market Vector Russia ETF Trust (NYSE:RSX), iShares MSCI Brazil Index (ETF) (NYSE:EWZ), Caterpillar Inc. (NYSE:CAT) , Deere & Company (NYSE:DE)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Crude Oil Prices Could Go Up Substantially Even From These Levels

"On the upside, if you look at some other commodities like copper, then obviously oil prices could go up substantially even from these levels. I don't think that oil is expensive compared to other commodities or compared to other goods prices in the world.

Further gains would obviously depend on some political problems — some interruptions in oil supplies or a possibility of the global economy experiencing some kind of a crack-up boom.

Crack-up booms don't last. They are not sustainable but they can last between six and 18 months and then a renewed setback occurs in the global economy." in CNBC

Related: iPath S&P GSCI Crude Oil Total Return (NYSE:OIL), United States Oil Fund LP (ETF) (NYSE:USO), Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (Public, NYSE:CVX), Halliburton Company (NYSE:HAL) , Schlumberger Limited. (NYSE:SLB), Repsol YPF, S.A. (ADR) (NYSE:REP)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Emerging Markets Outlook

"Whenever a market turns down after extended uptrend, you don’t know for sure whether this is the beginning of the bear market or whether it is just the correction in an uptrend. My impression is that if correction could last somewhat longer — then we will have to watch a rebound whether the rebounds can bring new highs or not. If it fails to bring in new highs, the likelihood of a bear market than manifesting itself is quite high." - in CNBC

Related: iShares MSCI Emerging Markets Indx (ETF) (Public, NYSE:EEM)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Middle East Tensions & Oil Prices

“There is always possibility of some further bad news coming out of the Middle East, which would then drive up oil prices.” in CNBC

Related: iPath S&P GSCI Crude Oil Total Return (NYSE:OIL), United States Oil Fund LP (ETF) (NYSE:USO), Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (Public, NYSE:CVX), Halliburton Company (NYSE:HAL) , Schlumberger Limited. (NYSE:SLB), Repsol YPF, S.A. (ADR) (NYSE:REP)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Short Term Downside Risks In Gold

"Long term Faber is still bullish on the metals, but he thinks they could fall in the short term with the general market. Gold could fall to the 1,100-1,200 USD area. For investors this should not cause any alarm because with the fiscal problems of the US and further monetization, the future for gold is still bright. Faber would use any decline to add to his positions." - in iStockAnalyst

Related: SPDR Gold Trust (ETF) (NYSE:GLD) , Newmont Mining Corporation (NYSE:NEM), Barrick Gold Corporation (USA) (NYSE:ABX), Market Vectors Gold Miners ETF (NYSE:GDX) , NovaGold Resources Inc. (USA) (AMEX:NG) , New Gold Inc. (USA) (AMEX:NGD)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Commodities Are Overbought. Expect Downside Volatility.

"Marc Faber is concerned about commodities, as they are currently very overbought by almost any measure. He goes on to say that commodities seem to have reached the parabola stage--going straight up, which is usually the very end of the move. Yes, it could last longer than anyone expects, but at some point prices will collapse again, as they did back in 2008.

This cycle, Faber notes, always occurs as higher prices lead to an increase in supply, which eventually overwhelms the market causing prices to fall. The cycle is longer for industrial commodities compared to agricultural prices as it is harder to build a new copper mine than it is for a farmer to plant more soybeans.

This cycle will play out even with the Fed's money printing. Investors should prepare for some downside volatility in commodity prices." - in commodity online

Related: PowerShares DB Agriculture Fund (NYSE:DBA), Powershares DB Base Metals Fund (ETF) (NYSE:DBB)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Bearish On Emerging Markets

"Faber remains very bearish on emerging markets in general (Brazil, India, etc). He notes that many failed to make new highs in January, despite favorable market conditions, which could indicate a major top in some emerging markets. Faber thinks emerging markets could fall between 20-30%. In fact, this would be a great buying opportunity for investors." - in iStockAnalyst, from the Gloom, Boom & Doom Report

Related: SPDR S&P 500 ETF (NYSE:SPY), ProShares UltraShort S&P500 (ETF) (NYSE:SDS), iShares Russell 2000 Index (ETF) (NYSE:IWM), iPath MSCI India Index ETN (NYSE:INP), WisdomTree India Earnings Fund (ETF) (NYSE:EPI), iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI), Market Vectors Vietnam ETF. (NYSE:VNM), iShares MSCI Emerging Markets Indx (ETF) (NYSE:EEM) , Market Vector Russia ETF Trust (NYSE:RSX), iShares MSCI Brazil Index (ETF) (NYSE:EWZ)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Crude Oil Likely To Move Higher

"I think oil is likely to move higher for a variety of reasons" - in Bloomberg

Related ETFs and stocks: United States Oil Fund LP (ETF) (NYSE:USO) , iPath S&P GSCI Crude Oil Total Return (NYSE:OIL) , Energy Select Sector SPDR (ETF) (NYSE:XLE) , Exxon Mobil Corporation (NYSE:XOM) , ConocoPhillips (Public, NYSE:COP) , Marathon Oil Corporation (NYSE:MRO), Hess Corp. (NYSE:HES) , Petroleo Brasileiro SA (ADR) (NYSE:PBR)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Emerging Markets Can Correct 30 Percent

"In a television interview, Faber has said that he expects global equity markets to correct from here on. In fact, he's put a number of 30% for the correction that could take place in emerging markets. Faber blames rising inflation and higher oil prices as factors that could bring about a global instability, thus causing stock markets to react negatively." - in EquityMaster

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Middle East Turmoil: Egypt, Saudi Arabia & Pakistan

“You may not have the problem in Saudi Arabia and the Emirates because there the governments can heavily subsidize food if they want to, but I’m particularly worried that what has happened in Egypt will happen in Pakistan.

I think Egypt is a reminder to people that politics and social events and geopolitics have a meaningful impact on asset markets." - in CNBC

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

CNBC Video Interview: February 2011

Topics: Inflation, Russia, Pakistan, China, India and US stock markets;

Related: SPDR S&P 500 ETF (NYSE:SPY), ProShares UltraShort S&P500 (ETF) (NYSE:SDS), iShares Russell 2000 Index (ETF) (NYSE:IWM), iPath MSCI India Index ETN (NYSE:INP), WisdomTree India Earnings Fund (ETF) (NYSE:EPI), iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI), Market Vectors Vietnam ETF. (NYSE:VNM), iShares MSCI Emerging Markets Indx (ETF) (NYSE:EEM) , Market Vector Russia ETF Trust (NYSE:RSX), iShares MSCI Brazil Index (ETF) (NYSE:EWZ)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

We Have To Realize That It’s An Artificial Recovery

“We have to realize that it’s an artificial recovery driven by ultra-expansionary monetary policies and also ultra-expansionary fiscal policies” - in CNBC

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Inflation Is Between 5% And 8% Per Annum In The US

"The annual cost of living increases are more than 5% today and the BLS is continuously lying about the inflation rate, including Mr Bernanke, he's a liar. Inflation is much higher than what they publish. I think that inflation is between 5% and 8% per annum in the US, and in Western Europe, a little bit lower, also 4-5% per annum." - in CNBC

Related: ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT), iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Oil Is Likely To Move Higher, May Not Be Good For Stock Markets

We never know if a correction is the beginning of something more serious or whether its just a correction in a bull market.

My impression is that we have a lot of of pressure in commodity prices on the upside and particularly oil. I think oil is likely to move higher for a variety of reasons and that may not be very good for stock markets. (in Bloomberg)

Related: United States Oil Fund LP (ETF) (NYSE:USO) , iPath S&P GSCI Crude Oil Total Return (NYSE:OIL) , Energy Select Sector SPDR (ETF) (NYSE:XLE) , Exxon Mobil Corporation (NYSE:XOM) , ConocoPhillips (Public, NYSE:COP) , Marathon Oil Corporation (NYSE:MRO), Hess Corp. (NYSE:HES) , Petroleo Brasileiro SA (ADR) (NYSE:PBR)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

When Something Like Egypt Happens, People Have Second Thoughts About Investing In Emerging Economies

I think it depend on which emerging economies you are talking about. But in general, in Asia we had huge moves over the last 18 months and the markets became very overbought, there was a lot of enthusiasm, a lot of foreign money inflows and I think we have now everywhere inflationary pressures in these markets.

And than when something like Egypt happens, people have second thoughts about investing in emerging economies. So the money flows back to the developed markets. That`s why I think for the next 3 months the US may outperform emerging economies stock markets. - in Bloomberg

Related ETFs: iShares MSCI Emerging Markets Indx (ETF) (NYSE:EEM) , Market Vectors Egypt Index ETF (NYSE:EGPT) , SPDR S&P 500 ETF (NYSE:SPY), PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQQ)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The United States Is No Longer A Triple-A, I Would Say A Maximum Triple-C.

"The financial condition of the United States is in my opinion quite dire. … The U.S. is no longer triple-A. I would say a maximum triple-C." - in courant.com

Related ETFs: ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT), iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT)

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.