March 30, 2013
Marc Faber Video: Not Even Gold Will Save You From What Is Coming
Marc Faber is a great contrarian investor and publisher of the Gloom Boom & Doom Report. He is well known for his accurace predictions of stock market crashes and other correct calls on different investment assets.
March 28, 2013
Marc Faber: "I Am Sure Governments Will One Day Take Away 20-30% Of My Wealth"
In a broke world in which the ridiculously named "muddle-through" has miserably failed, a global wealth tax seeking to expropriate some 30% of all financial assets is coming. As a reminder, back then we said that "all attempts to eliminate the excess debt have failed, and for now even the Fed's relentless pursuit of inflating our way out this insurmountable debt load have been for nothing.... The only way to resolve the massive debt load is through a global coordinated debt restructuring (which would, among other things, push all global banks into bankruptcy) which, when all is said and done, will have to be funded by the world's financial asset holders: the middle-and upper-class, which, if BCS is right, have a ~30% one-time tax on all their assets to look forward to as the great mean reversion finally arrives and the world is set back on a viable path."
Few took it seriously, and why should they - after all the market has been blissfully rising before and ever since then, which implies everything was ok, right? Wrong, as those who are lining up right now in the Cyprus late of night not to buy a shiny new iTrinket, but to access a measly €300 of their own money would promptly admit. Naturally, if more of our Cypriot readers had paid attention, they would have far more of their own money at their disposal right now, instead of having to beg Merkel's emissaries for a €300 handout tomorrow.
Now, a year and a half later, the realization that the global wealth tax is not only coming but is inevitable in practically every developed country, is finally sinking in, as this interview with Marc Faber confirms: "Until now, the bailouts in Europe and the U.S. were at the expense of the taxpayer. And from now onwards, in my view, the bailouts will also be at the expense of the asset holders, the well-to-do people. So if you have money I am sure the governments will one day take away 20-30% of my wealth."
He is correct, but probably optimstic.
The interview highlights:
Faber on whether he's participated in the equity rise in the U.S.:
"I think that I was relatively positive about U.S. stocks since March 2009. I haven't been shorting any stocks since 2009. The U.S. march is up and consumer confidence is down. Emerging markets are performing badly relative to the U.S., the dollar is strong, indicating a tightening of international liquidity. I do not think the U.S. market will go up a lot from here. I rather think there is now considerable downside risk."
On whether Europe can repair its house:
"They can repair it and actually Europe now has a current account surplus, which is positive. But obviously the economy is contracting. We are in recession in Europe. This will have an impact on the corporate profits of U.S. corporations as well because 40% of S&P earnings come from overseas, but the bulk actually comes from Europe and not emerging countries. I think that corporate profits in the U.S. will continue to contract as they have actually -- according to S&P -- contracted in the first quarter of 2012."
On why gold hasn't held up as a safe haven:
"When you print money, the money does not flow evenly into the economic system. It stays essentially in the financial service industry and among people that have access to these funds, mostly well-to-do people. It does not go to the worker. I just mentioned that it doesn't flow evenly into the system. Now from time to time it will lift the NASDAQ like between 1997 and March 2000. Then it lifted home prices in the U.S. until 2007. Then it lifted the commodity prices in 2008 until July 2008 when the global economy was already in recession. More recently it has lifted selected emerging economies, stock markets in Indonesia, Philippines, Thailand, up four times from 2009 lows and now the U.S. So we are creating bubbles and bubbles and bubbles. This bubble will come to an end. My concern is that we are going to have a systemic crisis where it is going to be very difficult to hide. Even in gold, it will be difficult to hide."
On whether the raiding of bank accounts in Cyprus set a precedent for Europe:
"MF Global, the depositors were also raided. It is nothing unusual. Philosophically I believe that we shouldn't have deposit insurances, blanketed insurances by governments because it would force savers to be very careful with which bank they would deposit the money. The good banks would pay very low interest and take low risks and the banks that take high risks would have high interest. By the way, in Cyrus, banks were paying very high interest like in Lebanon at the present time I can get 6% on my deposits. So the depositors should have known that something is dangerous, but I would say that the principal now is very important to understand. Until now, the bailouts in Europe and the U.S. were at the expense of the taxpayer. And from now onwards, in my view, the bailouts will also be at the expense of the asset holders, the well-to-do people. So if you have money -- like I am concerned -- I am sure the governments will one day take away 20-30% of my wealth."
Marc Faber is a great contrarian investor and publisher of the Gloom Boom & Doom Report. He is well known for his accurace predictions of stock market crashes and other correct calls on different investment assets.
Few took it seriously, and why should they - after all the market has been blissfully rising before and ever since then, which implies everything was ok, right? Wrong, as those who are lining up right now in the Cyprus late of night not to buy a shiny new iTrinket, but to access a measly €300 of their own money would promptly admit. Naturally, if more of our Cypriot readers had paid attention, they would have far more of their own money at their disposal right now, instead of having to beg Merkel's emissaries for a €300 handout tomorrow.
Now, a year and a half later, the realization that the global wealth tax is not only coming but is inevitable in practically every developed country, is finally sinking in, as this interview with Marc Faber confirms: "Until now, the bailouts in Europe and the U.S. were at the expense of the taxpayer. And from now onwards, in my view, the bailouts will also be at the expense of the asset holders, the well-to-do people. So if you have money I am sure the governments will one day take away 20-30% of my wealth."
He is correct, but probably optimstic.
The interview highlights:
Faber on whether he's participated in the equity rise in the U.S.:
"I think that I was relatively positive about U.S. stocks since March 2009. I haven't been shorting any stocks since 2009. The U.S. march is up and consumer confidence is down. Emerging markets are performing badly relative to the U.S., the dollar is strong, indicating a tightening of international liquidity. I do not think the U.S. market will go up a lot from here. I rather think there is now considerable downside risk."
On whether Europe can repair its house:
"They can repair it and actually Europe now has a current account surplus, which is positive. But obviously the economy is contracting. We are in recession in Europe. This will have an impact on the corporate profits of U.S. corporations as well because 40% of S&P earnings come from overseas, but the bulk actually comes from Europe and not emerging countries. I think that corporate profits in the U.S. will continue to contract as they have actually -- according to S&P -- contracted in the first quarter of 2012."
On why gold hasn't held up as a safe haven:
"When you print money, the money does not flow evenly into the economic system. It stays essentially in the financial service industry and among people that have access to these funds, mostly well-to-do people. It does not go to the worker. I just mentioned that it doesn't flow evenly into the system. Now from time to time it will lift the NASDAQ like between 1997 and March 2000. Then it lifted home prices in the U.S. until 2007. Then it lifted the commodity prices in 2008 until July 2008 when the global economy was already in recession. More recently it has lifted selected emerging economies, stock markets in Indonesia, Philippines, Thailand, up four times from 2009 lows and now the U.S. So we are creating bubbles and bubbles and bubbles. This bubble will come to an end. My concern is that we are going to have a systemic crisis where it is going to be very difficult to hide. Even in gold, it will be difficult to hide."
On whether the raiding of bank accounts in Cyprus set a precedent for Europe:
"MF Global, the depositors were also raided. It is nothing unusual. Philosophically I believe that we shouldn't have deposit insurances, blanketed insurances by governments because it would force savers to be very careful with which bank they would deposit the money. The good banks would pay very low interest and take low risks and the banks that take high risks would have high interest. By the way, in Cyrus, banks were paying very high interest like in Lebanon at the present time I can get 6% on my deposits. So the depositors should have known that something is dangerous, but I would say that the principal now is very important to understand. Until now, the bailouts in Europe and the U.S. were at the expense of the taxpayer. And from now onwards, in my view, the bailouts will also be at the expense of the asset holders, the well-to-do people. So if you have money -- like I am concerned -- I am sure the governments will one day take away 20-30% of my wealth."
Marc Faber is a great contrarian investor and publisher of the Gloom Boom & Doom Report. He is well known for his accurace predictions of stock market crashes and other correct calls on different investment assets.
March 27, 2013
Marc Faber Video: Warns of Gold Confiscation
Marc Faber is a great contrarian investor and publisher of the Gloom Boom & Doom Report. He is well known for his accurace predictions of stock market crashes and other correct calls on different investment assets.
March 15, 2013
Marc Faber : The Market will push Interest Rates Higher
Marc Faber is a great contrarian investor and publisher of the Gloom Boom & Doom Report. He is well known for his accurace predictions of stock market crashes and other correct calls on different investment assets.
March 14, 2013
Marc Faber warns colossal credit bubble in China
In 2012, investors were generally bearish towards the second largest economy in the world after China published the most anemic macroeconomic data for the last decade. In the last quarter of last year, investor confidence returned amid economic recovery and the news of the election of a new administration in Beijing.
This mood can be illustrated by the strong performance of the Shanghai Composite Index, which won 15 percent in December.
Faber warned that the growing credit bubble in China remains a key risk for investors in the country.
"If the Chinese government can ensure growth depends on reform and how to solve the problem of colossal credit bubble in the country. There are incredibly large amount of loans to black, bad debts and doubtful investments, "he said.
Western rating agencies warn of rapid expansion of the underground lending market, which is poised to become a real threat to financial stability.
Fears of Faber coincide with the request in December warning from the World Bank (WB), according to which the Chinese economy risks overheating because loose monetary policies of Western central banks leads to hot capital inflows to the region. They are the reason for the excessive growth of credit and investment bubbles swelling, according to a study of the bank.
Recent data on Chinese exports, which exceeded market expectations are also cause for concern, according to Faber.
Data on Chinese exports in January revealed a growth of 21.8% yoy, while analysts expect it to reach 10.1%. However, the reliability of this statistic is questionable because of discrepancies with the customs declarations in neighboring countries, including South Korea and Taiwan.
Faber said he believed the growth of the Chinese economy will actually be much lower and that some sectors will even fall into recession.
"I think the economy has slowed considerably, but they will announce that they have achieved the planned 7.5 percent. Real growth will be much lower. If you look at the data that can be relied on to a greater extent as those in Korea, Japan and Taiwan, statistics from China fits into the equation, "he said.
"China's economy will slow, and some sectors will even fall into recession ... The question is what will happen next. I think China will grow, but the road will be difficult, "said Faber.
In 2012, China's economy grew by 7.8 percent. The government in Beijing has set a growth of 7.5% in 2013, although most analysts predict that the expansion will reach 8%.
Marc Faber is a great contrarian investor and publisher of the Gloom Boom & Doom Report. He is well known for his accurace predictions of stock market crashes and other correct calls on different investment assets.
March 04, 2013
Marc Faber Warns: ‘Market Has Peaked Out’
The stock market has "peaked out" and bonds may be on their way to a rebound, Marc Faber, publisher of the Gloom, Boom & Doom Report, said Thursday on CNBC.
"I think we have made an intermediate top, and it could be a longer-term top," he said on "Fast Money."
"I don't think the market is as overbought as it was in '87, so I don't expect a crash. But I think for the time being, the market has peaked out, and I think in the meantime, bonds, which are extremely oversold, could rebound," he said.
The S&P 500 closed at 1,502.52 Thursday. A level of 1,530 could prove to be a longer-term high, Faber said.
"What I maintained in earlier interviews is that either we have a correction now, and then we go up further or we go straight up high in July-August, from where we could crash, so I welcome a correction here," he said. "The question will be, after this correction, we have to watch the market's rebound, whether it can make a new high or not."
Faber's holdings are 25 percent gold, 25 percent equities, 25 percent corporate bonds and cash, and 25 percent in real estate.
Why should investors believe his bearish prognostications?
"There was a correction between March, April 2012 and actually June 2012, so we had a correction, and then from September onward, when the S&P reached 1,474, we also had a correction into November, at which stage I said that the market would now rally. So I don't think I've been so totally wrong about the moves of the market, especially since 2009, and I can document those with the performance of my portfolio.
"But I think that the market has now become quite overbought and that is very significant or overextended, bullish sentiment. Everybody says, 'Sell bonds, buy equities.' And when everybody thinks alike, one has to be careful."
Marc Faber is a great contrarian investor and publisher of the Gloom Boom & Doom Report. He is well known for his accurace predictions of stock market crashes and other correct calls on different investment assets.
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