Marc Faber Blog

Thursday, May 28, 2015

Janet Yellen will not raise rates this year

The US economy has been decelerating over the last six months. Given this weakness and the backup in yields, I doubt if the Fed will increase rates this year. Rates will essentially stay where they are for the whole year. Furthermore, I would not be surprised if, at some point, they initiate another asset purchase program or QE4.

Tuesday, May 26, 2015

Indian stock market could drop 30 percent

In general, we had a big move to essentially 30,000 and now we can correct about 30% from the highs. Some stocks have already corrected quite a lot. So, I would not be surprised to see the Sensex dropping to 24,000 levels.

Thursday, May 21, 2015

Britain a degenerated country now

You just had the news on Cameron. You look at Cameron. What interest is he to the people of the world? Britain is no longer an empire – it’s a degenerated country….Britain is a great country but economically it’s completely meaningless.

Wednesday, May 20, 2015

Good credit vs Bad Credit

The worst credit is what the U.S. has, which is consumer credit. People borrow to buy a car or a washing machine. That does not generate income and becomes burdensome to the household.

If you look at Korea and Japan in the 1950's to 1970's, credit was used for capital spending, infrastructure, plants, education, research and development. That credit generates cash flow, which can repay the debt.

Some people argue that China has overbuilt roads, tunnels, bridges and trains. But I don’t see it that way. In the U.S. during the 19th century, the country constructed lots of canals and railroads. All the canal companies, including the Erie Canal, went bankrupt. About 95% of the railroads had to be refinanced or went bankrupt. But the network facilitated the country’s trade and commerce significantly. So China is doing the right thing.