Note: I am not an investment advisor and nothing I state should be taken as investment advice. Please consult your own private professional financial advisor for help in making investment decisions
Marc Faber is back in the news. Who is Marc Faber? He's the author of the 'Gloom, Boom, Doom Report.' On March 9th, 2009, the S&P 500 hit a 12-year low. On that day, Faber predicted stocks would rally thanks to government stimulus money being pumped into the economy. Since then, the S&P 500 has rallied 55%.
Faber is back in the news today, making the following assertions:
*Stocks have likely peaked for the year and will probably face a 20% correction.
*Faber prefers emerging markets. The Asian economies will continue to grow despite the financial mess in the West.
*Fiscal and monetary stimulus measures have only delayed an inevitable crisis instead of preventing it.
*“The next stage is for total breakdown of the financial system and for an economic and financial crisis that will bankrupt governments.” -Faber
*Gold will face a correction along with equities. Faber "wouldn't be surprised" to see gold settle at $920 an ounce. However, Faber does not plan on selling his holdings in gold.
*Despite being an ultimately doomed currency, the U.S. Dollar is likely to rally amid deflation concerns.
Source: http://www.business-standard.com/india/news/marc-faber-predicts20-fall-in-markets/371403/
Showing posts with label marc faber. Show all posts
Showing posts with label marc faber. Show all posts
Monday, September 28, 2009
Thursday, September 10, 2009
Marc Faber Foresees Inflation
What lies in store for the American economy? Inflation or deflation? The financial world has been debating this question for a while now.
Famous investor Marc Faber spoke publicly on Wednesday (9/9/09) and reiterated his opinion that the U.S.'s extremely high deficit, near-zero interest rates and the Federal Reserve's quantitative easing policy will combine to spur inflation in the future.
Faber predicted the current stock market rally last October, when he advised his readers to invest in stocks again. Apparently Faber is still quite bullish on stocks but not because he has much faith in a recovery or in the current state of the economy. Quite the opposite, actually.
The bold emphasis was added by me. I'm in complete agreement with Faber on this point. I argued that the stock market is not at all an accurate barometer of the nation's economic health in two of my previous posts (Nouriel Roubini and the Future of the Stock Market and Desperate Investors Embrace Risky Moves).
Faber also recommended investing in precious metals and raw materials as a hedge against a weakening dollar.
Faber also challenged the idea that we're in the midst of the beginning of a recovery, pointing out the continuing weakness in consumption.
Read the entire article at Bloomberg news by clicking here: Faber Says ‘High’ U.S. Deficit Will Spur Inflation (Update1)
Note: I am not an investment adviser and this is not intended to be taken as investment advice.
So, whats your take? Whats the U.S. economy in store for? Inflation? Deflation? Is Faber right or wrong? Why? Make your case here.
Famous investor Marc Faber spoke publicly on Wednesday (9/9/09) and reiterated his opinion that the U.S.'s extremely high deficit, near-zero interest rates and the Federal Reserve's quantitative easing policy will combine to spur inflation in the future.
Faber predicted the current stock market rally last October, when he advised his readers to invest in stocks again. Apparently Faber is still quite bullish on stocks but not because he has much faith in a recovery or in the current state of the economy. Quite the opposite, actually.
“Money printing will be unprecedented because the deficit will need to be financed,” Faber said. “The weaker the economy, the more the stock market will go up because the money that is being printed will go into” speculative assets.
The bold emphasis was added by me. I'm in complete agreement with Faber on this point. I argued that the stock market is not at all an accurate barometer of the nation's economic health in two of my previous posts (Nouriel Roubini and the Future of the Stock Market and Desperate Investors Embrace Risky Moves).
“If the dollar is weak, there is a very good chance that equity prices could rise quite substantially,” Faber said. A weaker dollar is “good for asset prices.”
Faber also recommended investing in precious metals and raw materials as a hedge against a weakening dollar.
Faber also challenged the idea that we're in the midst of the beginning of a recovery, pointing out the continuing weakness in consumption.
Read the entire article at Bloomberg news by clicking here: Faber Says ‘High’ U.S. Deficit Will Spur Inflation (Update1)
Note: I am not an investment adviser and this is not intended to be taken as investment advice.
So, whats your take? Whats the U.S. economy in store for? Inflation? Deflation? Is Faber right or wrong? Why? Make your case here.
Wednesday, August 26, 2009
What I'm Reading
"Ultimate Crisis Still Coming"
Analyst Marc Faber believes that the ongoing rally is the result of excess liquidity pumped into the economy by central banks. He predicts a year to 18 months of market rally followed by a "ultimate" crisis that will "clean" the system. He advocates firing half of global government workers as one radical solution.
More Bank Failures Coming?
An analyst by the name of Richard Bove at Rochdale Securities (whom CNBC identifies as a "prominent banking analyst") is predicting a possible 150 to 200 further bank failures in the U.S. 81 banks have already failed in 2009.
Doubts About Dollar Continue
There is nothing new in this article. It simple summarizes why many doubt the stability and value of the dollar. It does mention that Pimco and Berkshire Hathaway Chairman Warren Buffet have come out as high-profile critics of the ballooning debt and how it could lead to negative outcomes for the U.S. dollar. I'm mostly interested in this article because it caps a week where we've seen a ton of articles from the financial media on the value of the dollar, but none with any real news or any "meat" to them. I find that rather curious but I can't explain it.
Senator Warns of Inflaton
Senator Chuck Grassley (R-Iowa) is warning about the possibility of 1980s style inflation, which hit 13.5%. I think its quite possible (maybe even likely) that his prediction will come true. In fact, he might low-balling it a bit at 13.5%. However, I think his public statements are a bad thing, a very bad thing. Grassley doesn't really offer anything new in his analysis and theres nothing in his background that makes him particularly competent to make such a prediction. What we're seeing is the further politicization of fiscal policy and the threat of inflation. When things get politicized, they get emotional and they get polarized and it makes it that much harder to get some actual, positive change for the better since everything becomes part of a political battle between personalities.
Well, thats all for now. Stay tuned for more ...
Analyst Marc Faber believes that the ongoing rally is the result of excess liquidity pumped into the economy by central banks. He predicts a year to 18 months of market rally followed by a "ultimate" crisis that will "clean" the system. He advocates firing half of global government workers as one radical solution.
"If you pump money into the system and you create large fiscal deficits, you create volatility," Faber, author of the Gloom, Boom and Doom Report, told CNBC in remarks reported on its website.
"We've seen an intermediate low in March, we'll rally for a year or so or maybe 18 months -- the ultimate crisis will happen much later, and the ultimate crisis would clean the system," he added.
Faber, who did not forecast a precise time for that crisis, told CNBC that firing half the government workers in the world would be one way of dealing with the crisis.
"If you shift government activity to the private sector the economy becomes more dynamic," Faber said.
More Bank Failures Coming?
An analyst by the name of Richard Bove at Rochdale Securities (whom CNBC identifies as a "prominent banking analyst") is predicting a possible 150 to 200 further bank failures in the U.S. 81 banks have already failed in 2009.
Doubts About Dollar Continue
There is nothing new in this article. It simple summarizes why many doubt the stability and value of the dollar. It does mention that Pimco and Berkshire Hathaway Chairman Warren Buffet have come out as high-profile critics of the ballooning debt and how it could lead to negative outcomes for the U.S. dollar. I'm mostly interested in this article because it caps a week where we've seen a ton of articles from the financial media on the value of the dollar, but none with any real news or any "meat" to them. I find that rather curious but I can't explain it.
Senator Warns of Inflaton
Senator Chuck Grassley (R-Iowa) is warning about the possibility of 1980s style inflation, which hit 13.5%. I think its quite possible (maybe even likely) that his prediction will come true. In fact, he might low-balling it a bit at 13.5%. However, I think his public statements are a bad thing, a very bad thing. Grassley doesn't really offer anything new in his analysis and theres nothing in his background that makes him particularly competent to make such a prediction. What we're seeing is the further politicization of fiscal policy and the threat of inflation. When things get politicized, they get emotional and they get polarized and it makes it that much harder to get some actual, positive change for the better since everything becomes part of a political battle between personalities.
Well, thats all for now. Stay tuned for more ...
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