Tuesday, December 29, 2015

Marc Faber on oil prices and market value

It [oil] can go down to lower levels for a brief period of time. We were at $147 in July 2008, and by December 2008, we dropped to $32. And then we rebounded from it. Markets are volatile; anything can happen. But from a demand/supply point of view, the equilibrium price is probably between $40 and $60.

Tuesday, December 15, 2015

How Governments can take your Gold

I think the US government, when gold really starts to move, will take it away. They will pay something. Say like in 1933, they paid $25 per ounce of gold that people held, and after they have collected most of the gold – of course not the gold that was held by government officials, or to precisely say “by corrupt government officials,” because they’re all corrupt – they revalued the gold to $35. So the investor lost out. And I think what will happen, the US will eventually, under some kind of an excuse, whether it’s terrorism or whatever it is, expropriate gold. 

Tuesday, December 8, 2015

Monetary policies can produce unintended negative consequences

We both economists and fund managers - usually think more interventions mean better outcomes. We often forget that every experiment and intervention with fiscal and monetary policies can go wrong, produce side effects or lead to additional interventions that themselves can go wrong. 

We have learned this lesson with central planners in the former Soviet Union and in China under Mao Zedong. Despite often repeating the mantra “First, do no harm to the market and to the capitalistic system,” economic decision makers have difficulty with doing less - even nothing. They find it hard to refrain from trying another QE, government spending spree, bailout, new regulation, transfer payments, or outright wealth confiscation through negative interest rates.”


Tuesday, December 1, 2015

Lows in interest rates near

Well you know it is like you have a wife and you have girlfriends! And the wife is maybe permanent but the girlfriends come and go! Optically, long term I would say ten years treasury or thirty years US treasury is of course unattractive, that we all agree because interest rates have been trending down since 1981 so we are more than 35 years into a declining interest rate structure, so we must be close to a low in interest rates.