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.