Monday, December 29, 2014

Low growth even in Asia says Marc Faber


I'm living in Asia and I can see we are not in a recession, but there is very little growth at the present time. 

Monday, December 22, 2014

Marc Faber sees value in Palm Oil

I think the Agriculture commodities collapsed by 50 percent- wheat, corn, soybeans, and so forth. And Palm Oil has very close correlation to Soybean prices and it also collapsed by 50 percent and with it the plantation companies went down. 


Related Stocks: IOI in Malaysia, Wilmar in Singapore

Thursday, December 18, 2014

Countries with surpluses investing mostly in Canada, Australia

What happens is some of these countries (such as Soviet Union, Eastern Europe, India) have large export surpluses, have reserves built up, then they come back into Europe and USA, but mostly into Canada, Australia to purchase assets for diversification reasons. 



Monday, December 15, 2014

Marc Faber feeling gloomy on prospects for Western World

We are in a world that is driven by money printing and, in general, I believe the standards of living for many people in the Western world will continue to decline as they have declined over the last 20 years.

Monday, December 8, 2014

Marc Faber December 2014 update

Jeremy McCarthy who is Group Director of Spa at the Mandarin Oriental Group asks his students, “What is worse, a negative employee or an apathetic one?”

McCarthy explains: “Of course, there is no right or wrong answer to this question, and it invariably sparks an interesting discussion. Some will recognize that an apathetic employee can be a drain on the system as they collect a paycheck but contribute minimally to the goals of the organization. Most of my students will say the negative employee is worse, citing, ‘one bad apple can spoil the bunch’ or other fears of the contagious nature of negativity.

But in their new book, The Upside of Your Darkside, psychology researchers Todd Kashdan and Robert Biswas-Diener say, ‘you need an anxious person on your team,’ because they serve as the ‘canary in the mine shaft,’ alerting you to problems before your more optimistic team members even become aware of them. You need someone who will tell you when you are making a mistake.”
I really like McCarthy’s short essay because he displays a very positive attitude towards “negativity” instead of endorsing “negativity toward negativity.”  

Christmas time is a time for reflection and for giving. Winston Churchill opined: “We make a living by what we get, we make a life by what we give.” My regular readers know that I and therefore, also the readers of this report, support the Child’s Dream Foundation, which is headquartered in Chiang Mai, Thailand.

I am also very impressed by Proyecto Mirador, which is a foundation set up by Richard and Dee Lawrence. PM is a non-profit organisation that sells gold standard voluntary market carbon offsets to pay for the construction of Dos por Tres fuel-efficient stoves in rural Central America. Since 2004, PM has built more than 80,000 stoves in rural Honduran homes (12% penetration), from which 450,000 people have benefited. So, in case you have the same problem I usually have around Christmas, which is to find a suitable gift for all your relatives and close friends, may I suggest you make a small contribution on their behalf to a charity of your choice or to one of the above-mentioned ones. In my case, thanks to the strong performance of my “Foundation Account” (+18% in 2014) I made a contribution on our behalf to all these organizations.   

Monday, December 1, 2014

Marc Faber to speak in Muscat, Oman on Dec 4


Bank Muscat is to host economist and investment analyst Marc Faber on December 4, 2014 as part of the bank’s series of seminars. Doctor Doom aka Marc Faber is to share his insights on the state of world economy and financial markets.

Faber studied economics at the University of Zurich and got his PhD at the age of 24. He publishes a widely-read monthly investment newsletter ‘The gloom boom and doom’ report which highlights unusual investment opportunities, and is the author of several books, including ‘Tomorrow’s Gold – Asia’s Age of Discovery’ which was first published in 2002 and highlights future investment opportunities around the world. It was for several weeks on Amazon’s bestseller list.

On his perceptions about the global economy in 2015, Faber told the bank that it would be flat to down in 2015 as there was no growth in Europe, coupled with decelerating growth in most emerging economies and anaemic growth in the US, which might well go into reverse.

The dollar was likely to strengthen further in 2015 against the euro and the yen. Near-term, he felt that there would be a correction and also thought that the Fed was unlikely to increase rates in 2015.

About the Middle Eastern economies in general and the GCC in particular, Faber said the decline in oil prices was likely to lead to a slowdown in these economies.

Thursday, November 27, 2014

Marc Faber says Asian countries to remain relatively peaceful

Basically I always own some shares, most of my share holdings are in Asia. 

I would like to point out something, the Dow Jones is flat for this year. In Asia, the Indian market is up 22 percent year to date. The Thai market is up 20 percent in dollar terms, Jakarta is up 24 percent. Philippines up 18 percent, Karachi up 17 percent and so forth. 

I worry about the geopolitical tensions but in general I think all the Asian countries are today so China-centric that there wont be a military conflict, there will be rattling and disputes and so forth. But the US doesn't really have the power to really wage a war in Asia, that we have to be very clear.

Tuesday, November 25, 2014

Entitlement programs in societies could create its own problems

Milton Friedman pictured with then President of USA - George Bush

We have an entitlement society. Milton Friedman wrote about this – the more you give to people, essentially the more poverty you create.

It's interesting. I just read today a survey of the army. Apparently, 70% of the people who apply to join the army in the US are rejected because they're useless. They're useless. You can imagine – the army doesn't have the highest standards, they're not the standards of Goldman Sachs. 

If 70% of the people there are rejected you can imagine how many useless people there are. I'm not singling out the US in this respect; this also happens in other countries.

Monday, November 17, 2014

Astute investors should hold their own Gold

I believe that smart investors need to have their own gold reserves. I would never trust anyone to hold these gold reserves on my behalf because they can lease it out or they can sell it.


Wednesday, November 12, 2014

Marc Faber on Workhorse vs Showhorse stocks

For the benefit of our readers [attached] explains James O’Shaughnessy’s investment strategy. It concluded that high price-to-sales stocks do well in frothy, speculative markets (such as 1967 and the late 1990s) during which performance oriented fund managers are willing to pay any price for ‘concept’ and ‘New Era’ stocks (this is now also the case). 

Their subsequent performance however, tends to be dismal - this particularly true when compared to low price-to-sales stocks. O’Shaughnessy further noted that it was more profitable to “choose stocks that are workhorses rather than showhorses.”     

Monday, November 10, 2014

Working vs Collecting unemployment benefits

Different economists have different views about this. My opinion is that the more unemployment benefits and disability benefits you give to people, the more people will make a choice between working and actually collecting benefits. 

And say a family, a husband and wife, two children – if one of the couple loses the job, he or she will become eligible for benefits and she or he can then take care of the children and the household and garden and this and that and get the benefits. So for him to actually go back into the workforce is only an option if the salary he will get is very high. Otherwise, by going back into the labor force he loses all the benefits, has to hire someone to look after the children or the house and so forth, so it may be actually a benefit for him not to work.

Tuesday, November 4, 2014

Lower oil prices may not be good news for US economy [VIDEO]



Marc Faber states that while lower Oil prices that we are seeing currently is good news for consumers. However lower prices is not necessarily good for the US economy as several Oil producers are losing money at these price levels.

Monday, November 3, 2014

Real Estate and Stock Market bubble wont happen again

We had a huge bull market in real estate and equities, as well as bonds, between 1980 and 2007. That isn’t going to repeat.

Monday, October 27, 2014

Marc Faber to speak at Cayman Islands Oct 30

Dr Marc Faber will be speaking at the Cayman Investment Forum on Oct 30, 2014 at the Marriott Beach Resort in Cayman Islands. 

The event, which includes lunch and a cocktail and networking event, begins at 11:30 a.m. Tickets are $125 for general admission and $75 for members of CFA Cayman.

Wednesday, October 22, 2014

Abenomics is a failure

My sense is that Abenomics is a complete disaster in the sense that the cost of living – because Japan imports a lot of goods and as the Yen weakens these costs have been going up far more than wages and so real incomes are down.

Tuesday, October 21, 2014

Commodities such as Oil have longer term price strength

The markets have become quite volatile, largely because of money printing. This concerns not just oil, but all commodities. The price of corn, wheat, soybeans are all down around 50 percent from the highs. They can be down for a while, but in my view, they will not stay down.

Monday, October 20, 2014

Deflation may be on the horizon

The bond market is manipulated by central bank buying of government debt. Yields are lower than they would otherwise be if the Fed and other central banks didn't buy them. 

Secondly, the decline in yields may be a sign that bonds buyers don't believe in the global recovery story when it comes to the economy. In fact, the low yields on bonds would suggest that we may be entering a period of deflation.

Wednesday, October 15, 2014

US compares favorably with France in terms of big government

The U.S. is not yet that bad [in terms of Government intervening in private sector]. But say from 1930 government spending as a percent of the economy has gone from 7.8 percent to now over 41 percent. 

It compares favorably with France which is now at 57 percent.

But the bigger the government is, the less dynamic the economy can be and the less gross there will be. But the governments don’t see that way.

Tuesday, October 14, 2014

Monday, October 13, 2014

All markets are dangerous in short term

I think most people haven't made that much money in US stocks this year. Some Hedge Funds have made money, and others have lost some money. Its been for many Hedge Funds a difficult environment. And usually when you have US dollar strength, it means its a sign of tightening global liquidity which usually hasn't been particularly good for US Stocks. 

Now if I look around the world, US stocks are very pricey compared to other shares around the world. Maybe they will go up a little bit more like in 1987 or March 2000 and then will drop a lot. 

But in general, if you take a view of the next 7 to 10 years, I think you will make more money in emerging economies, where by near term I think all markets are vulnerable.

Wednesday, October 8, 2014

More money printing leads to more Inequality in society



"What the Fed has done is catastrophic". - Marc Faber

Monday, October 6, 2014

Gloom Boom Doom - October 2014 Report

Thomas Sowell recently penned an article entitled, Mob Rule Economics in which he takes a critical view of higher minimum wages. Sowell writes that,
“While we talk about democracy and equal rights, we seem increasingly to let both private and government decisions be determined by mob rule. There is nothing democratic about mob rule. It means that some people's votes are to be overruled by other people's disruptions, harassments and threats. The latest examples are the mobs in the streets in cities across the country, demanding that employers pay a minimum wage of $15 an hour, or else that the government makes them do so by law. Some of the more gullible observers think the issue is whether what some people are making now is ‘a living wage.’ This misconstrues the whole point of hiring someone to do work. Those who are being hired are paid for the value of the work they do.”

In general, I believe that people instinctively want to work, and I am also convinced that people who work are happier than people who have no jobs. However, I also see every day people who would be perfectly fit to work – in some cases with special skills – that actually prefer not working and instead opt out to receive some benefits from the government.

High unemployment and a declining labor force participation rate in the Western world has numerous causes including affluence, changing attitudes from “personal responsibility” to “entitlements,” and especially because of the government’s generosity. It is evident that with increasing Government transfer payments, a decline in salaries and wages as a percentage of the economy and a contraction in the civilian labor force participation rate occurred.

Over the last few years, a heated debate has raged about the causes of a structural decline in the rate of economic growth in the advanced economies of the West and Japan. For us investors this discussion is important in terms of the future movement of interest rates, which I think could stay low for US Treasuries for quite some time. 

Wednesday, October 1, 2014

Today's generation not as motivated to work as previous generation

I think we have today in the world an entire generation who no longer wants to wake up at 7:00 in the morning and go to work at 8:00 or 9:00 in the morning and then come home at 5:00 or 6:00 in the evening and be pushed around by a boss. 

There's a generation of people who would rather do relatively little. They may opt to live with their parents in the basement or wherever that may be, so they have no responsibility to pay the rent for a house or to buy a house. 

They may drive around daddy or mommy's car and so forth. 

So I believe we have a structural change where people actually prefer to not do very much.

Monday, September 29, 2014

Faber outlines reasons for diversification

We are in a world that is driven by money printing and, in general, I believe the standards of living for many people in the Western world will continue to decline as they have declined over the last 20 years, if we look at median income in real terms. 

How the world will look in 5 or 10.... you and I and nobody knows, although some people think they know. So my advice is to be diversified. Hold some real estate, stocks, bonds and gold and you have to also diversify your assets geographically – don't hold everything in the US. Hold some outside the US as well; hold some outside Germany, outside Switzerland. 

You have to be diversified. Then you have to hope for the best.

Wednesday, September 24, 2014

Coming crisis will be different from last

Margin Debt level is at very high as a percentage of stock market capitalization, its essentially up to 2007 high and we have of-course a lot of leverage in the government sector, we have a lot of leverage in the corporate sector. And unlike the crisis in 2007 - 2008 when at that time the recovery came in 2009 emerging economies had a lot of momentum and they were still buoyant in terms of consumer expenditures increases, and notably China was very strong.

Now the emerging market complex is slowing down and isn't going to grow nearly as much as everyone have expected. If emerging economies overall can grow next year at say 4 percent, that would be actually an optimistic scenario, I think it could be even lower. 

Monday, September 22, 2014

Marc Faber wants his investments diversified hoping to avoid huge losses

I have always argued that we don't know how the world will look in five years' time. Maybe the S&P is at 3,000, but it could also be at 1,500—we just don't know. 

There's a lot of manipulation through fiscal and monetary policies. So I want to be diversified. I want to own some gold, I want to own some shares. I own the most in Asia and some in Europe because I think in Europe they are still better value than in the US. And I own some bonds, cash and real estate. I hope when the collapse happens, I'm only going to lose 50 percent of my money.

Wednesday, September 17, 2014

Western countries such as US heavily indebted

Well, my view is that the current monetary arrangements are not sustainable in the long run. We have sensitive, overly indebted Western economies in the US and Europe. It is not visible yet, because the unfunded liabilities are probably not accounted for. 

A company under GAAP would have to account for them, but governments don’t have to. What this means is that the benefits of people will eventually have to be cut either through inflation and adjustments that are below the true cost of living increases or through reduced payments to the individuals. With benefits going down or through outright expropriation over the last two or three years, more and more voices have come up talking about wealth inequality. 

I previously discussed the problem of wealth inequality brought about by expansionary monetary policies where the main beneficiaries become the asset holders. Wealth inequality should be largely addressed through monetary policies in the sense that you should have an interest rate structure that does not favor the kind of asset inflation we have. 

Monday, September 15, 2014

Rich have gotten richer

Credit expansion and money printing hasn't filtered much to ordinary people. It's boosted asset markets, real estate and stocks.

So well-to-do-people have done very well. High-end restaurants are packed. Now, some money flows to people who are serving there, because well-to-do people give generous tips, but ordinary people have a much higher cost of living increase than 2 percent.

Wednesday, September 10, 2014

Financial markets should pay attention to middle east crisis

Today, we find ourselves with the same anti-free market interventionists who set up the Federal Reserve, the US Treasury and the US government. These same incompetent professors and academics also run foreign policy in America and then go and intervene in the affairs of Libya, Syria, Egypt, Iraq or Afghanistan. And as can be expected, they mess up just about everything. 

We have this Wolfowitz Doctrine that says they don’t want to tolerate any other major power such as the Soviet Union or China. So they want to contain these countries. When these countries become economically more and more important, the tensions, in my view, are only going to increase. 

I think it’s unlikely that the West will take any action. 

First of all, they don’t have the money. 

Second, a survey done by the US military stated that over 71% of their youth are unqualified to join the military for a number of reasons, including educational, behavioral and health conditions. So, if 71% of American youth are not qualified, it means the US doesn’t have the labor force to actually implement its foreign policies. And so they resort to private contracting companies that create more problems than solutions. I’m very negative about the Middle East. I think the whole region will blow up. Eventually Iraq will be divided into three different countries: the Kurds, the Sunni in the North and the Shiites in the South. All I can say is that, in general, financial markets are not paying sufficient attention to this.

Monday, September 8, 2014

Water and Food investments can be big in future in emerging economies

I think there is an opportunity in real estate in some emerging markets because they are depressed and so forth. But in terms of industries, I tend to stay away from the new industries until they've gone through a bubble stage and then the bubble bursts and then they become cheap. At the present time, I want to be rather in liquid investments than in these kind of sectors. I think an underappreciated sector is probably water and food. I think this will be a big issue in the future.

Tuesday, September 2, 2014

Economic power shifting from Western countries to Asia

Everything is connected and interrelated. We had a colonial system until the end of the Second World War, followed by the rise of individual countries. And over the last twenty-five to thirty years what we had as the rise of China with 1.3 billion people. Because of China’s rapid growth and resource dependence (iron ore, copper from Australia, Brazil and Africa, and oil principally from the Middle East), the Chinese have obviously become a very important economic force.
Sky scrapers dot the cities across China and Hong Kong

Take Africa twelve years ago: trade between Africa and the US was twice the size of trade between Africa and China. But today, the situation is reversed. As a result, China has gained large geopolitical influence due to its growing economic relations. This helped shift alliances from the US to the East, which has led to tensions. China has many provinces that are larger than a European country and as an economic block, China is huge! It dwarfs everything else in Asia. But now China is surrounded by military bases in Asia, by American aircraft carriers and by the signed defense treaties between the US and Japan.

Moreover, the Chinese never forgot that Japan had attacked them numerous times over the past 200 years. Additional disputes between China and its surrounding countries, Vietnam, the Philippines, Taiwan, and especially Japan about maritime rights will cause further tension in the region. Despite these tensions, the power shift is still underway. 

You have a superpower like the one Britain was until the First World War and you have a rising power like Germany whose economy in 1910 overtook that of the British. Here you have the superpower that believes in the old order and the new power that believes it should have more influence on global affairs. The
resulting tensions create an environment that is favorable for confrontation. But it doesn’t have to come to war. In my view, China’s long-term objective is to kick out the US from their military bases, particularly after Hillary Clinton and Mr. Obama announced the American Pivot to Asia two years ago; it was a kind of direct attack or confrontational behavior towards China.


Last Update: Sep 5, 2014

Wednesday, August 27, 2014

Financial Crisis will return

There will again be a financial crisis because if you look at the cause of the last financial crisis, it was overly expansionary monetary policies that led to excessive credit growth and the very high leverage in the system was most noted in the US. And now they have bailed out the financial system by pumping even more money in the system. Excessive credit brought the crisis out and now the medicine is even more credit. 

Monday, August 25, 2014

Marc Faber: Africa will never be as successful as China


Africa has no chance to be the new China, not in a million years. You just have to look at how Chinese work, and their work ethics and the work ethics of black people. This is not a racist observation; it's a common sense observation. 

I love Africa. It's the most beautiful continent and the fact that people are easy-going is rather a plus than a negative. 

But I wouldn't want to live in Africa for security reasons. There's a lot of crime and theft and so forth, and number two, wealth that comes from resources usually – there are exceptions – usually does not lead to lasting wealth. 

And the upturn in Africa is largely from the resource price increase.

Wednesday, August 20, 2014

Monday, August 18, 2014

Oil more likely to go up higher than lower

In my view, the long commodities cycle, the so-called Kondratiev, lasts 45 to 60 years. There's no precise date. Now, if we assume that the commodities cycle peaked out in 1980, then we had a bear market until '99 – so in other words, an almost 20-years bear market. And after ''99 I think the Kondratiev cycle started to move up. We're now 2014 so we're essentially 14 years in the upward wave that usually on average lasts something like 22 years – sometimes more, sometimes a bit less. The commodities cycle from '99 to 2007, 2008 was driven by incremental demand from China. That is a big factor. The demand from China may weaken somewhat and for sure it will not grow at the same rate but it will not collapse. It may not go up a lot and in the face of industrialization first commodities demand goes up a lot but then it starts to level off.

But in my view, what can also drive commodity prices, because I'm on the board of some mining companies, and I can tell you that nobody will drill for oil if oil is less than, say, $70 a barrel. Nobody. And the copper price in 1998 was 68 cents a pound, precisely 58 cents a pound at its low. Nobody will look for a new copper mine and produce below, say $2 a pound. 

The costs today of exploration and bringing the commodities to the markets are astronomical and you can also thank the Federal Reserve for that. So if people think that oil will be significantly lower than what oil is now, they're dreaming. It may drop one day to $60 for a few months, but on a long-term basis, in my view, with all the geopolitical problems, with the problems of finding new oil, with many oil fields having less and less production, in my view, the risk for oil is rather on the upside than the downside.

Thursday, August 14, 2014

Burn the Fed

Basically, I don't think they[Occupy Wallstreet protesters] should occupy Wall Street. They should go and burn down the Federal Reserve in Washington and hang up the ultra-dovish Fed governors that advocate even more money printing. That they should do. 

Wednesday, August 13, 2014

Marc Faber: Legalize drugs to reduce its appeal

In general, I believe that any kind of drug should be legalized and there would be less crime and probably less usage. I'm all in favor of legalizing drugs because all I see, and I've looked at it very carefully when I was in Mexico – the drug business is so incredibly profitable that there is widespread corruption, at the CIA, at the FBI, at the police force, in the military, and that is not a very desirable outcome.

If it was legalized, we would have far less crime and far less corruption. It's like during the Prohibition time – alcohol consumption if anything rose and there was much more crime and much more corruption. 

Monday, August 11, 2014

What we need to understand is this

I think we are in an economy that is on steroids – in other words, the money printing – and the money printing goes essentially to wealthy people. Of course, they spend and as a result of the asset bubbles, temporarily the economy improves worldwide but it's not sustainable growth. 

We have to realize that. So economically, I'm actually more pessimistic today than I have been in a long time. That does not imply that asset markets cannot go higher. That is a possibility and, in fact, I hope the US market goes ballistic and creates a gigantic bubble, which will then embarrass the Federal Reserve because every bubble eventually gets deflated. 


Wednesday, August 6, 2014

Marc Faber criticizes the Fed

Janet Yellen is the chief of the Fed
It would seem to me that whereas most fund managers are reasonably honest, a larger issue pertains to what extend central bankers ever consider honor in what they are doing: “the duty imposed by conscience, position, or privilege.” The Fed’s monetary policies have been to the detriment of a large segment of US households.


Monday, August 4, 2014

In bad times equities better than Govt Bonds

In general I'd say I'd keep some money in Real Estate as it is unlikely to be taken away, it maybe taxed but not taken away 100 percent. I'd keep some physical gold in a safe deposit, but not in the US. In general when everything goes bad, equities are better than government bonds and other bonds.

The MF Global mess should wake up people. The key is to have your funds and assets in a secure place and secure custodian, not someone that goes and gambles with your money. But who knows who gambles and who doesn't gamble. 

Thursday, July 31, 2014

Marc Faber dismisses his naysayers

Over my career, somewhere, somehow I must have made some right calls. Otherwise, I wouldn't be in business.

Tuesday, July 29, 2014

Would buy Hong Kong shares [VIDEO]



The fed has done little to main street, the average family in the United States and average median household. 


[Watch above Video]

Monday, July 28, 2014

Marc Faber likes Jeremy Grantham's thinking

We have a bubble in everything — from stocks to bonds, real estate, high-end real estate and even art. 

I believe stocks are fully priced here. I’m of the view of Jeremy Grantham. That when you have low valuations, future returns are relatively high; when you have high valuations, future returns are relatively low.

Thursday, July 24, 2014

No one is thinking clearly when everyone is thinking the same

Everyone thinks alike in the sense they say central banks will continue to print money and as a result asset prices will go up. When everyone thinks alike, no one is thinking clearly. 

We have seen cases where interest rates remain low or went down and markets still fell, like in Japan or the U.S. after March 2000. In 2001, they slashed the fed funds rate from 6.5% to 1%, yet the Nasdaq COMP +0.48%  still fell, the housing market still fell...the fact that you have low interest rates doesn't mean low asset prices cannot go down. 

Wednesday, July 23, 2014

Social Media stocks dont appear attractive to Faber

Well, globally we have essentially euphoria in anything that is related to social media and the Internet. I am personally not so interested to invest in sectors that are popular and that sell at relatively high valuations.

Monday, July 21, 2014

Stock market is wrong because the global economy is weakening

When I travel and look around economies, I don’t see the global economy strengthening, I see it weakening. 

We are now in the fifth year of an economic recovery which began in June 2009 in the U.S. and we’re more than in the fifth year of a bull market that began on March 6, 2009. 

This is a very mature economic recovery. It would seem to me that the monetary policies that central banks pursue are negative for economic growth, but they are positive for asset price increases. As a result of asset price increases, lots of goods have become unaffordable for the typical household. 

Thursday, July 17, 2014

30 percent correction is a possibility

I have been expecting a correction that hasn’t happened, but it has happened in individual stocks, and it has happened in emerging economies. A 30% [correction] would not surprise me, but the financial media doesn't believe it can happen. When the S&P was at 666 on March 6, 2009, they didn't believe the S&P would go to 2,000 either.

The market is very overbought. The rise this year has been accompanied by fewer and fewer stocks making new highs. GE , GM, IBM , Wal-Mart are no longer participating in the advance. 

Wednesday, July 16, 2014

Marc Faber is feeling conservative on China, India growth for now

We have to be very careful with the data that is published by governments. I do not think that the Chinese economy is accelerating on the upside.

Trend wise, Chinese growth will slow down from, say, around 10% annually in the last 10 years or so to a range of, say, 4% to 6% annually, but you have two huge countries -- China and India.

Some sectors of the economy may grow and some companies may grow, but in general trend wise, both in India and in China, we will have slower growth in the next 10 years than we have had in the past. If India can grow at 5-6% per annum, it will be very lucky.

Monday, July 14, 2014

Marc Faber owns US Dollar vs Euro

I hold some U.S. dollars, and I really can't see how the euro would strengthen a lot against the U.S. dollar. It may strengthen somewhat, but not a lot, because if the euro strengthens meaningfully, they're going to print as well in Europe, the same in Japan and so forth. So for that reason, I own gold.

Monday, July 7, 2014

Big Government is not the solution.. It is the problem

Economist Richard Rahn, the eponymous creator of the Rahn Curve, makes the connection between the rate of economic growth and the size of government. The Rahn Curve suggests there is an optimal level of government spending (as a share of GDP) that maximizes the rate of economic growth. As government begins to rise from zero percent of GDP, initially it spends to protect life, liberty and property; as this happens the economy surges. 

When government makes people safe, enforces contracts, protects liberty and enforces property rights great things begin to happen. As government continues increasing, it next spends on infrastructure. Such spending further accelerates economic growth. It is clear that a little government does a lot of good. At this point government’s share of GDP is between 10% and 20%. From its founding to circa 1930, total US government spending was around 10% on the Rahn Curve.

In general, I have great sympathy for the Rahn Curve, which essentially states that the larger the government becomes beyond a certain point (about 20% of GDP) the slower economic growth will be. Under the influence of the neo-Keynesian interventionists and the professors at the Fed, the public has been brainwashed into believing that governments can revive economic growth. 

But as Ronald Reagan pointed out, “Government is not a solution to our problem, government is the problem.” Barry Goldwater warned that, “The government that is big enough to give you all you want is big enough to take it all away.

Monday, June 30, 2014

Marc Faber's first job has shown him value of money has dropped a lot

In 1970, I started with a salary of $1295 a month, plus I had a living allowance of $300. But with that you could live quite well, not with luxury. I had a nice one bedroom apartment on 52nd Street and we could go skiing on the weekends and on summers we went to the Hampton's for fun. I'm just saying the value of money has depreciated dramatically over time.

Wednesday, June 25, 2014

Marc Faber says Vietnamese people are hard working

Vietnam has an appealing investment environment. Vietnam’s economy has been influenced by a tensions with China in a East Sea. But we trust Vietnamese and Chinese diplomats will find a approach to palliate a tensions. we will continue investing in Vietnam. Vietnamese work hard and they have ambitions.

Monday, June 23, 2014

Marc Faber: Bitcoin has merits

I think bitcoin or something similar has a lot of merits…I’m not sure in the future if it will be possible to carry gold from Point A to Point B, or even to transfer money from Point A to Point B. Bitcoin will have value as long as there are exchanges and as long as people will accept it.

Tuesday, June 17, 2014

Market correction still awaits

Since October 2011, we have not had a significant correction in the market. The largest corrections were corrections of less than 11%. 

Now if the data deteriorates and if the stock market would decline by 20% over a given period of time, I think they would actually increase the asset purchases and actually give up the tapering.

Monday, June 16, 2014

Own gold for a financial crisis protection

If I look at all asset classes - real estate, equities, bonds, commodities, ... gold is relatively inexpensive at present because we had that meaningful correction.
GOLD


Don't forget we went to $1,921 in September 2011 and since then we have been in a declining trend basically until recently.

When I started to work on Wall Street the global bond market was $790; and before the crisis in 2007 the global bond market had already increased to $70 trillion and now the global bond market is at the $100 trillion something ... something will break, one day will have another crisis; and under these conditions I would own some gold.

Wednesday, June 11, 2014

Sunday, June 1, 2014

Marc Faber Market Commentary June 2014 Gloom Boom Doom

I continue to believe that the future returns from asset markets will likely disappoint most investors. It should be clear that the higher bonds and stocks move up the lower the future returns will be. 

As mentioned, I hold Ten-year Treasuries, but with a yield of less than 2.5%, the best I am hoping for is to lose less money than in US stocks. 

I believe that emerging markets are reasonably priced – certainly compared to US equities – but they have not reached completely distressed levels where I would make a major commitment. 


Thursday, May 29, 2014

Stock market Put protection

In a diversified portfolio I think that Treasury Notes and Treasury Bonds would rally, if stocks fell sharp. This is a way of having a put in the stock market.

Monday, May 26, 2014

Momentum stocks have fallen down 30 to 50 percent from their highs



Marc Faber talks to Trish Reagan of Bloomberg TV

Tuesday, May 20, 2014

Africa and middle east growth

African economies and middle-eastern economies will grow quite rapidly, may be at Five per cent to Six per cent per annum. 

They are coming from a very low base.

Sunday, May 18, 2014

Marc Faber: Vietnam and Iraq to grow

The most attractive stock markets macro economically and technically in terms of valuation is probably Vietnam and Iraq, which as an economy is not problem-free but it will grow; the valuations are extremely low. So, these two markets will perform reasonably well. 

Wednesday, May 14, 2014

China troubles to impact commodity producing countries more

On India, the impact of slowdown in China will not be that significant because India is not a huge supplier of commodities to the world. 

When China began to grow very rapidly after the late 1990's, it obviously drove demand for commodities higher along with the prices. So the commodity prices have seen huge increases between 1999 and July 2008, and now that the Chinese economy is slowing down, the increase in the rate of growth of purchases has slowed down considerably, and in some cases, the growth is negative.

So, my view is it will have very meaningful impact on resource producers such as Brazil, Argentina, Africa, Central Asia, Middle East, and Russia. And, I don't think that emerging economies will actually accelerate upside this year, I think they will slow down further. 

Tuesday, May 13, 2014

Monday, May 12, 2014

China troubles will be felt worldwide

The Geo-political situation of the world has worsened, and when there are tensions that could lead to repricing of risky assets. Now, China has become the most important economy in the global context in terms of growth, and if there is crisis then it will be felt globally. 

Wednesday, May 7, 2014

University degree can be useful

My father’s view was that I would have to work all my life and that to spend a few years at University - provided I qualified - would “inflame” my intellect and provide me with the opportunity to decide in what field I would spend the rest of my life.

Monday, May 5, 2014

Russian stocks have become very cheap

I made some investments more than a year ago in Iraq, because it's very cheap. There's lots of problems but the market is very very inexpensive. Russia is dirt cheap, but I don't think there is a hurry to buy Russian stocks.

Thursday, May 1, 2014

Wednesday, April 30, 2014

Marc Faber Q&A session on Gold



Watch the above video by clicking play.

Monday, April 28, 2014

All bubbles deflate at some point

The financial markets or asset markets, all of them are in large or small bubbles, and eventually will get deflated. 


Whether it's equities, bonds, real estate, paintings, vintage cars or apartments in Mayfair, London or Madison Avenue, New York, all these assets will come down in value because of credit collapse. I don't know when it will actually happen, but that is a risk for emerging economies.

Thursday, April 24, 2014

Hong Kong properties are on sale

A Chinese recovery would essentially mean that the property market in China is not overheated, and that property prices will not decline. In which case, Hong Kong property companies would become rather attractive, because they sell, in some cases, at almost a 50 percent discount the net asset value.

Tuesday, April 22, 2014

Buy Hong Kong and Vietnam shares instead of Chinese shares

If you want to play a recovery in China, then I think you're better off buying Hong Kong shares, because in Hong Kong, you have reasonably good corporate governance, you have very-well-managed companies, which are owned largely by families. So the families are ready to be conservative in their dealings. They have low leverage. So if you believe that China is bottoming out and going up, I would own some Hong Kong shares, as I do.

Another recovery play—a market that has a similarly poor performance to China over the last few years—is Vietnam, which is very cheap, which has deleverage and improving fundamentals in terms of growing trade surplus, rising exports and so on. So I think Vietnam is better than China itself, if you believe in the Chinese recovery.

Monday, April 14, 2014

Bad market crash warning

I think there are some groups of stocks that are highly vulnerable because they're in cuckoo land in terms of valuations. They have no earnings. They're valued at price-to-sales. And this is not a good metric in the long run.

I think it's very likely that we're seeing, in the next 12 months, an '87-type of crash. And I suspect it will be even worse. 

Monday, April 7, 2014

Bitcoin dependent on electricity and the "System"

I don’t know the value of a bitcoin. I own gold because when the system breaks down, I want to have some cash. With a bitcoin, there is a scenario where the system breaks down and you have no internet access and then what is the value of your bitcoin?

Thursday, April 3, 2014

US Stock Markets seem extended

We have had this huge expansion in the S&P level since 2009. The S&P was at 666, it went to over 1,800 and at some point we will have a bear market, 20 to 30 per cent. Since October 2011, we haven’t even had a 10 per cent correction.


Tuesday, April 1, 2014

Marc Faber: Gloom Boom Doom Report April 2014 - Market Commentary

Sherry Turkle, a psychologist and professor at M.I.T., and the author of  “Alone Together: Why We Expect More From Technology and Less From Each Other” opines that, “Human relationships are rich; they’re messy and demanding. We have learned the habit of cleaning them up with technology. And the move from conversation to connection is part of this. But it’s a process in which we shortchange ourselves. Worse, it seems that over time we stop caring, we forget that there is a difference. 

We are tempted to think that our little ‘sips’ of online connection add up to a big gulp of real conversation.....But they don’t. E-mail, Twitter, Facebook, all of these have their places - in politics, commerce, romance and friendship. But no matter how valuable, they do not substitute for conversation……In conversation we tend to one another….We can attend to tone and nuance. In conversation, we are called upon to see things from another’s point of view.”

Aside from discussing the merits of conversation, I also examine an ongoing shift in the stock market’s leadership away from high flying concept and momentum stocks into more defensive sectors.

I am enclosing two reports. The first report Break-even inflation – reflation time, and longer-term opportunities is by my friend Laeeth Isharc who is one of the smartest and most intellectual individuals that I know of. Isharc opines that, “The consensus narrative is ….that inflation is not an immediate problem, and that the central bank knows very well how to defeat inflation once it becomes evident.” He, however, believes that, “these concerns over deflation and weak growth will turn out to be mistaken, that it will be more difficult to control inflation than most anticipate, and that tactically the timing and entry level are right to take the other side of the trade and bet on reflation by entering a long break-even inflation position.”

The second report is by Jawad Mian who is a fund manager living in Dubai. In his most recent reflections he discusses the possibility of shorting US internet and biotech stocks and his views about inflation.



Via - www.Gloomboomdoom.com

Friday, March 28, 2014

Can foreigners own companies in Vietnam

There are restrictions. Non-Vietnamese investors can't own 100% of the shares, but in time the rules will be liberalized. 

Wednesday, March 26, 2014

China impact on commodity prices

I think that investors are not sufficiently aware that the Chinese economy is far more important for other emerging economies than the United States because China is a large importer of resources. In other words, iron ore, copper, zinc (inaudible). And at the same time, they are a huge exporter to commodity producers of their own manufactured goods, as well as Korean exports. The commodity producers are much larger than Korean exports to the US.

So if the Chinese economy slows down, commodity prices - industrial commodity prices are likely to remain under pressure. They've already come down a lot. They remain under pressure and the resource producers have less money. In other words, the Brazilian goes into recession. The Middle East does not grow as much as before. Central Asia, Africa and so forth all contract, and then they buy less from China and you have a vicious cycle on the downside.

Tuesday, March 25, 2014

Marc Faber vs Jeremy Siegel study of Dow Jones

 I always am skeptical about these studies. For example Jeremy Siegel published a study on how the Dow Jones has performed between 1800 and today.

I once told Jeremy, “Look Jeremy, if you invested in 1800, in stocks in the U.S., 80% of the companies at that time were canal companies and banks. In the first big bust, the Depression of 1840, 1841, most of them went bankrupt. And eventually all the canal companies in America went bankrupt, all of them, even the most profitable ones, like Erie Canal.”

Then people invested in railroads in the 19th century. By 1895, 95% of the railroads went bankrupt. The studies don’t take these statistics into account; like how many companies failed if you had invested in stocks in 1929. Most of them no longer exist.

Monday, March 24, 2014

Which data more reliable on China

If you look at the figures of China, exports are still growing. If you look at the trade figures China exports to Taiwan, so China records exports of so and so much. The Taiwan report imports from China at a much lower level. 

So which figures are more reliable? 

I think the figures of the trading partners of China are more reliable. And they would suggest that growth has slown down considerably.

Friday, March 21, 2014

Marc Faber on China vs Europe growth

Even if China grows by only 3% or 4%, it is better than Europe. People are moving up the economic ladder in Asia and into the middle class.

Thursday, March 20, 2014

Asians are risk takers while Swiss take few risks

I went to a high class school in Switzerland. Not that we were rich, but in the class there were several very well-to-do Swiss family members. Of the children of these families, most have no more money. 

One still has a lot of money because his grandmother was studying in Paris in her youth and took a liking to the 1910-1920s impressionists. So they have Van Goghs and Renoirs and Matisses — even in the bathroom they have so many of them. The appreciation in value of these paintings was fantastic.

Another one is well-to-do because he inherited money from an uncle of his. So it’s funny that entrepreneurial families that were – at that time — either in construction or the textile industry, are essentially all gone. The largest wealth of my school friends came from inheritances.

I liked Asia when I first came there in 1973. I went to Hong Kong because people were very entrepreneurial and risk takers. They like to gamble and they’re not afraid. In Switzerland everybody is always afraid of losing money. 

In Asia, they take risks and some of the entrepreneurs have become immensely rich — immensely rich starting from zero. These are people that were frugal with themselves. They worked very hard and they also benefited from asset inflation. In Hong Kong, property prices went ballistic over the last 30, 40 years. So anyone who owned properties became very rich.

Wednesday, March 19, 2014

China pollution and water problem is bad

We've been discussing China's water problem. 

In addition to water problems, pollution, too, has become so horrible that people are leaving China with their children. Sometimes, entire cities break down. 

You hardly have a clear day in Hong Kong any more, or in Shanghai. Agriculture is in disarray because the water table is falling, and agricultural commodities prices have corrected significantly, despite all the money-printing around the world.

Tuesday, March 18, 2014

Marc Faber says "Buy low sell high"

Well basically, we had a huge run-up in prices starting in 1999, from $255 oz. to $1921 oz. in early September 2011. We’ve been in a correction period since.
Now, I think the correction period was partly justified because there was too much enthusiasm and too much speculation, leading to the peak in September 2011.

But I think that there may have been some market manipulation as well. My sense is that the correction has probably come to an end. If anything, the fundamentals for gold are much better today than they were at the time of the peak, but the price is down.

Every investor understands “buy low and sell high” as a principle, but when prices are low, nobody wants to buy. We had very negative sentiment recently.

Of course, we could one day enter a long-term downtrend after the long period of growth and asset inflation over the last 20 to 30 years.

But when I compare gold to the S&P, the S&P is up substantially since 2011 and gold is down substantially. If you compare the performance of gold shares to the S&P, it has been a disaster for gold shares.

When I look around at asset prices; real estate, bonds, equities, paintings, collectibles, vintage cars, I think the price of gold is actually one of the few assets that are relatively cheap, relatively inexpensive now.

Monday, March 17, 2014

How Marc Faber invests by hiring experts

Well, most of the money that I look after, I manage myself. I believe that we don’t know the future; I may have my views about investments and someone else may have a different view, a different skill set, or a different niche of expertise.

For example, I don’t know anything about biology. I also don’t understand social media. But there is probably someone out there who is specialized in those sectors, and I would allocate some money to that person. Or for instance, I’m familiar with Russia because my partners and I founded one of the first Russia funds, Firebird, in 1993.

But I’m not an expert on each Russian company today. So for investing in Eastern Europe and in Russia, or even in Asia, I would give my money to somebody else. I don’t have the time to visit every company. I know lots of families that own businesses and so forth, but I’m interested to see what other fund managers are doing.

So if I know a fund manager that is specialized in Asian shares and is value-oriented, I may give him some money. So I allocate some money to different managers.

Friday, March 14, 2014

Gold relatively cheap

When I look at asset prices; real estate, bonds, equities, vintage cars. I think that gold is actually one of the few assets that is relatively cheap, relatively inexpensive.

Thursday, March 13, 2014

Marc Faber: Short Turkey Lira

I recommend shorting the Turkish lira. I had an experience in Turkey that led me to believe that some families are above the law. When I see that in an emerging economy, it makes me careful about investing.

Wednesday, March 12, 2014

Tesla, Netflix, Facebook, Twitter, Veeva, 3D Systems are all overpriced

I recommend shorting a basket of momentum stocks, including Tesla Motors [TSLA], Netflix [NFLX], Facebook [FB], Twitter [TWTR], Veeva Systems [VEEV], and 3D Systems [DDD]. They might be good companies, but they are overpriced.

via  Barrons Roundtable Jan 2014

Tuesday, March 11, 2014

This bull market has gone for very far

This is the second longest bull market in the last 100 years. These are all signs of a top, so I wouldn’t buy shares here. I’m not interested.
Can the market go up another 20 percent? Perhaps.

I wasn’t interested in buying the Nasdaq in late 1999, but between January and March 2000, the NASDAQ went up another 30%. Of course, people were crying shortly thereafter when they realized their losses.

So, the markets go up and down. I think that the upside potential for most stocks is very limited now and there is considerable downside risk. Probably more downside risk than investors realize.

Monday, March 10, 2014

Reasons to be cautious

Over the last two years, most equity markets around the world, in emerging markets, have been down or moving sideways. They’re no longer following U.S. stocks up. In the U.S., an increasing number of shares are breaking down.

We had extremely optimistic sentiment just before Christmas. We had very heavy insider selling, with high valuations, and extremely high corporate profits by historical standards.

The bull market will be five years old. This is the second longest bull market in the last 100 years. These are all signs of a top, so I wouldn’t buy shares here. I’m not interested.

Friday, March 7, 2014

Join a successful company to learn

I advise my younger readers who come out of school or university to first work in a successful company in order to learn the ins-and-out of an industry. And while working for a company, it is important to make the best out of it either by joining or by forming a “fake family.” Some of your colleagues will be close friends for life even if you work somewhere else, while others will become your customers or will be in a position to help you in many different ways (the Goldman Sachs people seem to be very good in this respect). 

In fact, whereas my life improved after starting my own business (although I worked harder than when I was an employee), the one and only thing that I occasionally miss working on my own is the daily interaction with colleagues or as Kellaway puts it, working and living within a “fake family.” 

Another point I wish to make about corporate life is this: Corporate life is usually not particularly pleasant. But since most people will work all their lives as employees of companies and therefore, spend more time at work than at home, they can greatly improve their working lives (and their performance) by having a cordial relationship with their colleagues and superiors. 

Personally, I actually believe that most people have a better relationship with their co-workers (their fake families) than with their spouses at home.

Thursday, March 6, 2014

Ha Noi-Hai Duong Beer, FPT and Vietnam Dairy

My favorite investment is Ha Noi-Hai Duong Beer [HAD.Vietnam], a local brewery. FPT [FPT.Vietnam], an information-technology company that sells mobile phones, Internet services, and software, is another pick. It is a technology conglomerate with more value than its share price reflects.

Vietnam Dairy Products [VNM.Vietnam] is a Vietnamese blue chip. It has been growing around 30% a year, and can continue to grow by about 20% a year. The stock hasn't been acting well lately, but the company has a big market in Vietnam and will do well long term. 

Asian consumer companies aren't cheap anymore, but in time, multinational consumer companies will want to acquire them because they have distribution in the region. A basket of Vietnamese shares could be attractive.

Wednesday, March 5, 2014

Marc Faber vs Lucy Kellaway

Lucy Kellaway argues in the Financial Times that the idea so beloved by “the cheesier half of corporate America, that employees are somehow part of the family is one of the most delusional metaphors of modern corporate life.” 
I have to say that I completely disagree with Miss Kellaway’s views about “families” and workplace “fake families.”

I was fortunate because I always had a close relationship with my co-workers, and all my superiors were always most courteous toward me, my wife and my daughter. 

In fact, they always went out of their way to support and help me. This, despite the fact, that I was probably their most “difficult” employee. But my bosses took my unpleasant character in stride and told me smilingly that if I were not “difficult,” they would not have hired me in the first place.

Tuesday, March 4, 2014

More Europeans may choose to live in Singapore

The outlook for property in Asia isn't bad because a lot of Europeans realize they will need to leave Europe for tax reasons. They can live in Singapore and be taxed at a much lower rate. 


Monday, March 3, 2014

Market Commentary March 2014

In early January 2014 I opined that, 
“It might seem to my readers counter-intuitive to have a position in 10-year Treasuries, and at the same time to believe that commodity prices could rebound.” 

However, since the beginning of the year, both long-term Treasuries and most commodities rebounded strongly. Long-term Treasuries are up 5%, gold is up 12%, and the Junior Gold Mining Index (GDXJ) is up 52% from the late December 2013 low. 

Also, as I explained in previous reports, I would reduce my US equities positions altogether because valuations (and profit margins) are stretched.

I do own some long-term Treasuries because I believe that owning them is an inexpensive and relatively low risk strategy for shorting the stock market.



Friday, February 28, 2014

Marc Faber praises Li Ka-shing and Hutchison despite of low growth potential of HK port traffic

I'm not bullish about Hong Kong port traffic. It is unlikely to grow. 

That is why the stock [Hutchison Port Holdings Trust] yields 7%. But the board is made up of smart people. The group, which is controlled by Li Ka-shing, the richest man in Asia, is keen on infrastructure investments around the world. They run their ports efficiently.

Thursday, February 27, 2014

Marc Faber recommends Wilmar International stock

On Commodities and current recommendation
Prices for commodities, such as soybeans, corn, and wheat, are now at reasonable levels. 

I am recommending Wilmar International [WIL.Singapore], an agribusiness company. It specializes in palm-oil products and sugar. The founder, Robert Kuok, and his family are the controlling shareholders. It is a big family in the region.


Wednesday, February 26, 2014

Treasuries can rise when stocks fall

I think there is a chance when equity markets sell off, there will be a flight from quality. I recently bought treasuries in the belief that they will rise when the stock markets sell off.

Monday, February 24, 2014

Central banks in emerging markets made a mistake

Basically central bankers are Keynesian, they believe in intervention but what they never do is cool down the system.

What the central banks in emerging economies missed is that they should have slowed down their economies and credit growth two years ago and taken some pain. 

Friday, February 21, 2014

People should not be forced to speculate with their savings

You live in NY, do you really think your cost of increase is 1.2 percent per annum. It feels like five times more. 

By keeping interest rates at zero percent at the Feds fund rate, you penalize the income earners, the savers, your parents. Why should your parents be forced to speculate in stocks, real estate and everything under the sun.

Thursday, February 20, 2014

19th century US ideal economy

In the 19th century, the entire government in the US, local, state and federal was less than 20 percent of the economy. 

Now its more close to 50 percent of the economy. The larger the government becomes the less economy growth you have, and more crony capitalism and corruption you have. 


Wednesday, February 19, 2014

US stocks are nearing a top



"I think you need to be fearful lets say, if you take the view of the next 5 year to 10 years, you take the valuations of the US equities and emerging economies, then I think, I could make the case that over the next 5 to 10 years, that I could make more money buying emerging economies now than in the US. Having said that I think its too early to make a major commitment to the emerging stock markets. In general I think its too early to do it, they can still decline." - Via CNBC



Tuesday, February 18, 2014

Middle east countries could be in trouble

Geopolitical tensions are rising. You can't hold the Fed responsible for that, although without money-printing, the price of energy would be lower. I was in Ethiopia and Egypt at this time last year. The Asians have a future; they can advance, and tighten their belts. But a country like Egypt is much worse off today. The Nile Valley can't feed the people. Many countries in the Middle East could go up in flames.

Monday, February 17, 2014

Marc Faber on Thailand political situation

Although the political situation is not very good, we have a government that is dysfunctional and consistently intervenes in the free markets, especially the rice scheme, which is particularly unsuccessful. In the case of Thailand, having no government might be better. 



Friday, February 14, 2014

Beware of big corporations and money printers

Because the big corporations and specially money printers are the most powerful people in the world. They control the governments. The US treasury, federal reserve and the government is one and the same. The Fed finances the treasury, so they can go to war. Then they finance transfer payments essentially to buy votes so they can get elected.

Thursday, February 13, 2014

Marc Faber interview, treasury short term better than equities



Marc Faber interview with CNBC on Stocks, Treasuries, China problems and global credit bubble.

Wednesday, February 12, 2014

Faber would rather own gold, silver, platinum to bitcoin

I prefer physical gold, silver, platinum to Bitcoin. Bitcoin can have a lot of competition. Gold, silver, platinum dont have any competition. How do you value a bitcoin ? 

I can value Gold to some extent to say Gold to the quantity of money floating around the world, the wealth increase, to the credit increase, to the production costs, so I have any idea of where Gold should be. I'm not sure because prices overshoot.

Tuesday, February 11, 2014

IMF new tax proposal in Europe

IMF has come up with a paper in Europe that essentially the well to do people should pay a one time wealth tax of 10 percent. But I can assure you one time wealth tax will become a every year tax.

Monday, February 10, 2014

QE was not needed to save financial system

Employment would have improved even more without the money-printing of the past few years. The Fed acted correctly to save the financial system during the financial crisis, which it created with its easy-money policies in the late 1990s and early 2000s. 

But Ms. Yellen could be sitting on a barrel of gunpowder, pouring gasoline on top of it, and lighting a cigarette, and she wouldn't know the danger of bubble creation.

After World War II, Hong Kong was in a depression. But the economy developed rapidly thereafter under the leadership of John James Cowperthwaite, a British civil servant and financial secretary of Hong Kong from 1961 to 1971. Asked later what he did to achieve this economic miracle, he replied, "I didn't do anything. I just prevented others from taking bad measures."

Sunday, February 9, 2014

China and India slowing down

As an observer of markets - whenever everyone focuses on one thing - like Greece and Europe - maybe they miss issues that are far more important - such as a meaningful slowdown in India and China.

Friday, February 7, 2014

Junior Gold Miners looking good as investment

Those who own paper assets are doomed.

I recommend the Market Vectors Junior Gold Miners ETF [GDXJ], although I don't own it. I own physical gold because the old system will implode. 

Thursday, February 6, 2014

Marc Faber likes Bonds and Bill Gross

Ten-year and 30-year yields eventually will be much higher. But I bought some 10-year Treasuries when the yield rose to 3%, because in the near term, yields could retreat to 2.5% or 2.2% or even 2%. 

The economic recovery is in its fifth year. On March 6, the bull market in stocks will be five years old. That's long, by historical standards. Sometime this year, the stock market could see a big tumble, as in 1987. Then the long bond will rally and reward Bill Gross.

Wednesday, February 5, 2014

Faber hopes for a 40 percent correction

I think stocks are, by and large, fully priced. I think the experience with quantitative easing is a complete failure. It has lifted asset prices and created asset inflation, but it hasn't lifted the standard of living of most people in the U.S. nor worldwide.

I think the market is way overdue for a 20 to 30 percent correction. But that is "nothing that worries me.  I'm hoping for the market to drop 40 percent so stocks will again become—from a value point of view—attractive.

Watch the full CNBC interview of Marc Faber with host Jackie DeAngelis 


Tuesday, February 4, 2014

Fed should write useful papers, not useless stuff

All these professors and academics at the Fed, write papers that nobody reads, and nobody is interested in. 

Why would they once not write about, how to structure an economic system that lifts [atleast] the standard of living of most people..... you cant lift everybody.

Monday, February 3, 2014

Marc Faber on Bill Gates and Poverty

Poverty in the world is one of the economic and social issues that have preoccupied me the most. How do we reduce or even eliminate poverty? I do not have the answers. Bill Gates in a recent letter to Wall Street Journal, which was based on his Foundation 2013 annual report, tries to find some solutions. I commend him for that even though I have serious reservations about “aid” as proposed by him. Still, the Gates Annual Report is well-worth a read (http://annualletter.gatesfoundation.org/en).

Homeless in India
I have encountered extreme poverty everywhere in the world. In the shanty towns and on the streets of Mumbai, Dacca, Soweto, Nairobi, Jakarta, Rio de Janeiro, Buenos Aires, etc. and in the bidon-villes on the outskirt of large French metropolises. Some encounters with poverty I shall never forget.

 A very long time ago, I met a girl in the Philippines  I forgot whether it was in a bar or a nightclub. The next time I saw her, she invited me to her parents’ house. We drove to the outskirt of Manila into the worst slums I had ever seen (against the advice of the taxi driver). The parents’ house was more like a hut without electricity, running water and sanitation in a crowded small lane…. When we got there, the sweaty, overweight father was sitting in the tiny living room. He immediately sent someone to get us two ice-cold San Miguel beers. Naturally, I wanted to pay because in the seventies a beer in the Philippines was still a luxury item. The father, however, refused my offer. We then had a very engaging discussion in Spanish and suddenly my unease vanished and I felt very comfortable in this horribly impoverished environment…..

Much later, I had a very young driver in Madras (now Chennai) who took me around southern India for ten days. When he dropped me off at the airport, I gave him a $100 tip, which was at the time in India quite a lot. A few weeks later my driver wrote a very poignant letter to me saying that I had changed his life with my tip. It had allowed him to buy a bicycle with which he could now reach his work place and his school much faster….

What I want to say is this. Yes, I applaud Bill Gates who wants to improve the world. At least he makes the effort. However, it is equally wrong to look at poor people like lepers who in the past were banished from societies. Poor people have also dignity and honor, they also have happy families, and they are frequently far more generous and compassionate than our wealthy society.

I am not suggesting that we should not fight poverty. However, I doubt we can become “world improvers.” What we can do is trying to help less privileged people around us and interact with them.

I have to say that I have frequently thought about my friend’s heavy father sitting in his tiny house in one of the worst shantytowns I ever saw (much worse than the slums of Africa) and of his generosity, and also about the touching letter my Indian driver sent me. The encounter with extreme poverty may be as beneficial to us who belong to a more privileged class as it is to the poor.

Sunday, February 2, 2014

Marc Faber on Obama vs republicans

The problem with Mr. Obama is that you get more regulation and it's a disincentive for businessmen to hire people. You probably also get higher taxes, so in terms of the economy, he is very negative in my view.

I think Mr. Obama is a disaster for business and a disaster for the United States. Not that Mr. Romney would be much better, but the Republicans understand the problem of excessive debt better than Mr. Obama, who basically doesn't care about piling up debt.

Friday, January 31, 2014

It doesn't add up

If money printing helps everybody, then why does everybody not always have zero interest rates, then everybody would be rich and you keep on printing rich. So lets just print money. It doesnt add up.

Thursday, January 30, 2014

Faber: Fed will bankrupt the world

First, nobody could have a more negative view of the Federal Reserve than I. It is run by a disastrous group of academics, who have no clue about what is happening in the real world. They believe money-printing can create jobs. 

They are going to bankrupt the world. Mr. Bernanke said the intention of QE3, which then turned into QE4, was to lower long-term bond yields. 

As it happened, yields on Treasury notes and bonds bottomed on July 25, 2012, and have been rising since. The policy was a failure.