Tuesday, March 15, 2016

There is not many alternatives to invest in for small investors

Given the alternatives of negative interest rates on so many government bonds, stocks are relatively attractive.

Thursday, March 10, 2016

Rising asset prices hurts the Average person and helping the Rich

If the Fed and other central banks believe they can push up asset prices forever they are dreaming.

Most people, they have no assets, they have no money so what does it do to them if the price of Picasso painting goes up or down, they do not own a Picasso painting. They do not own high end properties in London, Singapore, Hong Kong, Mumbai, Manhattan and so forth. It does not touch their lives.

The notion of asset prices going up being good is kind of a brainwashing economics theory that benefits people that already have substantial assets, ordinary people they do not benefit from rising asset prices, in fact they are being hurt.

Look, when I started to work on Wall Street I could buy the Dow Jones at less than 800, it had a dividend yield of 6%, bonds were yielding 6%, so the compounding impact was huge and real estate was inexpensive.

Now a young guy, he starts working, please explain to me how he is going to save, he has to rent apartments at very high rents, if he wants to buy one he has to pay a very high price. Deposit in Europe, there are $8 trillion worth of bonds that have a negative yield so you deposit your money, you give it to the government and the government gives you back less, how are you going to save.

Tuesday, March 8, 2016

Central banks are a disgrace to a democratic society says Marc Faber

I have always maintained derivatives will not exist forever. Eventually, there will be no derivatives and we'll start a new system, which is based on, say, gold or another currency that cannot be multiplied by some academics at the central bank. I mean, when you think about it philosophically, now we have 5,000 years of human history from the old days in Babylon up to today that has been recorded. Never, ever before have interest rates been this low. Never, ever before have we had negative interest rates. This has all been created by some mad academics that populate the halls of glass buildings called central banks. 

This is now really a disgrace to humanity that in democracies in particular, we give so much power to these people that basically rule the world to a large extent.

Thursday, March 3, 2016

I would own some Gold - Gold is inexpensive

Stocks in some countries have more upside than others. The stock market in Vietnam, due to the improving economic fundamentals, has better potential than Hong Kong and China, where the fundamentals are worsening.

I also believe precious metals are inexpensive, though they may stay inexpensive for a bit longer because sentiment is now very negative.

Again, if you said, "Marc, here is $1 million, but you have to put everything in either gold or in the Dow Jones," then I would say I'd take gold.

Everything is distorted, and it's a relative game. Looking at the fundamentals of the world, including the quantity of money, the magnitude of debt as a percent of GDP, the low economic potential and the mad frame of mind of central bankers and their intellectual dishonesty, I would own gold.