In order to exercise control over the population, governments throughout history have made people dependent on government largess. A government can make an increasing number of people dependent on its generosity by providing more and more benefits to a larger and larger share of the population.

Because of these “freebies,” people will go along with the government’s enlargement as a percent of the economy. The masses believe in their free lunch and because the business elite knows it can profit from the growth in government.

A political system controlled by an ignorant electorate that is manipulated by a dishonest and controlled media that dispenses propaganda on behalf of a corrupt political establishment can hardly be the path to lasting prosperity. In fact, I am surprised that economists continue to discuss GDP growth (usually in real terms), when they should be focusing on sustainable growth. Let me explain. Since 2000, US government debt has increased from US$5 trillion to over US$16 trillion. Over the same period, nominal GDP is up from approximately US$9.5 trillion to US$15.5 trillion.


- Marc Faber. in Daily Reckoning

@1 year ago
#Marc Faber 

Gold has a huge rally from around – the low was a 1522 last December and we are now over 1700 and I think we need a correction here. In fact, I am now bearish about practically all assets near term I think we’re entering a correction time where there will be some disappointments, where stock markets, from the recent times can easily drop 20%.

I think some people in the US, actually the ECRI already say that the US is in a recession. But of course we have to consider the following, an economy is a very large vessel, there are different sectors. And some sectors are improving like housing in the U.S. is improving. The problem with improvement in housing is that stocks have already gone up very substantially, they more than tripled from their low. And so we are ahead of ourselves. The Greek stock markets from its low is up more than 60%, so a 20% correction is nothing unusual.


- Marc Faber. Fox Business News.

@1 year ago
#Marc Faber #Quotes 

I own corporate bonds and I recently, as I wrote, I pulled some bonds from Kazakhstan because Kazakhstan economically is a much sounder country than the United States or any European country. But it is in small doses. I wouldn’t put all of my money in corporate bonds. They have an equity character. I also own equities still in Asia and as I pointed out already four months ago for the first time in my life I bought equities in Portugal, Spain, Italy and France because they were unbelievably distressed. I think what people overlook today is they look at markets but they don’t look at what happens within the market. In the last 12 to 18 months the U.S. has massively outperformed European markets, Asian markets with a few exceptions and now some markets are relatively depressed. I could argue the Chinese stock market is now relatively depressed. So the asset allocators may move some money in Chinese stocks and then they can rally 10 percent to 20 percent.

I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system. It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets and you have at the same time increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development. I don’t want to build a new business. But what I may do is look around the world, where are the distressed assets. So I will go and buy existing assets, takeovers. But takeovers don’t add to employment. They destroy employment. Secondly, I would just like to mention one thing. This money printing business, they have been saying that for the last 15 years that bailing out LTCM were necessary. Then they say the NASDAQ collapsed after March of 2000. We need to create another bubble, print money. They created a gigantic credit bubble and the misery that we have today.


- Marc Faber. Businessinsider.

@1 year ago
#Marc Faber #Quotes 

What Would Save The Euro?

We have here a political issue. The bureaucrats in Brussels want to stay in power. They are going to do whatever they can to preserve the Euro. I don’t think the man on the street in Europe is interested in the Euro. If you ask them the question, do you really want to pay for the Spaniards, the Italians, the Greeks and it will cost you this much money out of your pocket, directly or indirectly through taxation or inflation or what not. They would say no. But the weak countries, they all want to stay in because they get the pensions in Euros. And if they exit, their currency say the Spanish peseta will be pegged at 50% lower rate than at the present base rate.


- Marc Faber. CNBC.

@1 year ago with 1 note
#Quotes #Marc Faber 

Negative Real Interest Rates Create a lot of Volatility

I think China stocks are quite a good buy.

Investors will look back at the European crisis today and think we should have bought equities in 2012.

In this environment of negative real interest rates we will have a lot of volatility and there are two strategies you can use. One is to aggressively shift from one asset class to another. The other option is to segregate a portfolio equally amongst precious metals, equities, real estate and cash.

- Marc Faber. Opalesque Asia.

@1 year ago
#Marc Faber #Quotes 

Currently I am quite negative about equities for the next three months. I am not saying that they will collapse but I think the markets will go down. I will add to my positions when the markets correct here. I think they could easily correct in Europe by ten / twenty percent from the recent highs that we had.


- Marc Faber. CNBC India.

@1 year ago
#Marc Faber #Quotes 

I want to put this view in the context of having bought European shares in Portugal, Spain, Italy and France for the first time in my life three and four months ago, right at the lows and now these markets have rallied between 20 and 30% in a very brief period of time. I’m not selling them but I said when I was asked ‘Would you buy more?’, I said ‘No’. I want to wait for the market to settle down once again and then they asked me ‘By how much?’. I said, maybe the correction could be 20% but I said I don’t expect new lows.

You need a farm and you have to train yourself not to depend on the internet and mobile phones and so forth and so on because when it happens, it could happen because of a cyber attack that would trigger such an event or any kind of other act of warfare. but we have to prepare for that. it’s like you have an insurance. I don’t carry insurance policies but, say, you have insurance for all kinds of events. People who can afford should have insurance for that day when it will happen.


- Marc Faber. CNBC Squawk Master.

@1 year ago
#Marc Faber #Quotes 

I think European markets could easily correct 10 to 20 percent from the recent highs that we have had, but I don’t envision new lows. I bought some shares in Portugal, Spain, Italy, and France, and after I bought them in the last three to four months, the market rallied strongly.

I am negative on equities for the next three months, I’m not saying they will collapse but they will go down and I will add to my positions when the market corrects here. In the worst case scenario that the euro collapses and Spain and Italy for example exit the euro zone, the markets of these countries will adjust to the upside.

In the worst case scenario that the euro collapses and Spain and Italy for example exit the euro zone, the markets of these countries will adjust to the upside. Also if you are an investor in one of these countries, what are you going to be more comfortable holding — the deposits in one of your banks or equities? So, I think a lot of money is flowing into these equity markets because the perception is that they are safer than bank deposits.

I would hold physical gold with a country that has a culture with gold such as Australia. In a collapse, the gold price could fall 50 percent, but if everything else falls by 90 percent, then you are relatively well off. So I would hold some physical gold regardless of the economic outcome.


- Marc Faber. CNBC Asia.

@1 year ago
#Marc Faber #Quotes 

I think that, to be quite honest. I, as an investor, it concerns me that, for instance, the government appoints principally people connected to Mr Thaksin for, say, Thai [Airways] International.

As an investor, to me, it sounds very strange that people who run large companies are appointed by the government and that the government then favours people that are supportive of them. There is |still a lot of so-called cronyism. In other words, I have political power and you’re a businessman or you are someone who was at the party before and I give you a good job and the position of power.

The purchasing power of money has depreciated a lot, and maybe the gold is still cheap. I will never sell my gold.

Now I happen to believe if you have money on deposit in Thai banks, it’s much safer than if you have deposits with Citigroup, UBS, Royal Bank of Scotland and so on, because Thai banks don’t have huge derivative portfolios. JPMorgan, they have trillions of dollars in derivatives. Nobody knows how to value this ‘garbage’.

Thai property was still reasonably priced when compared with real estate in other parts of the world. He said he had invested in some Thai stocks, including Bumrungrad International Hospital, Bangkok Dusit Medical Services, CP All, Charoen Pokphand Food, and some companies related to telecommunications and real estate.


- Marc Faber. The Nation a Thai Newspaper.

@1 year ago
#Marc Faber #Quotes 

There is not much global growth at the present time that’s the problem , because money does not flow into economic activity it flows into asset prices , into speculation and yes we have diverging move between equities and other asset prices and economic activity with economic activity worldwide being depressed. The money (from monetary easing) does not flow into economic activity, it flows essentially into asset prices, into speculation.

We have the money printing today which we did not have before and so it is very difficult to predict because it is a political decision, all I can say is if you look at history the most powerful people were usually in the end killed or hanged or crucified and the central bankers today are the most powerful people, so you could imagine what I am thinking about the central banks and what their leading employees will eventually happen to.

We don`t know when it will burst, but I could imagine that every inflation eventually came to an end. Consumer price inflation of the 1970`s came to an end, the asset inflation in equities, notably the Nasdaq in 2000 came to an end, then the commodities boom in 2007/2008 came to an end, the housing bubble came to an end.

Seems that all the money is flowing essentially into the hands of well-to-do people in the financial sector. I could imagine a situation where suddenly well-to-do people will suffer the most, either through increased taxation or a decline in asset prices.

Basically, if you are over-indebted, the one solution is to bring down debt but by extending more debt and encouraging more consumption, you do not do that. You just postpone the problem. You do not resolve it and in my view, the problem with money printing is that the money that is being printed or dropped as Mr Bernanke said from helicopters does not flow evenly to everybody and does not left all crisis at the same rate.


- Marc Faber. FNN Australia.

@1 year ago
#Marc Faber #Quotes 

Where To Safekeep Physical Gold?

You should dig a hole in your garden or hold it say I would think that Singapore Honk Kong or Dubai are reasonably safe. I do not think that Europe is a hundred percent safe because if say the US expropriated Gold, they would probably go to Europe as well and say you should do the same and so forth and since by then the central bankers will be in a really bad position, it would probably also implement that measure.


- Marc Faber. RT Capital Account.

@1 year ago
#Marc Faber #Quotes 

Consumer Price Index in the US Grossly understates the Rate of cost of living increases for the typical household

What we have had is a lot of people have lost their jobs but have found jobs that pay less… say they’re suddenly involved in hospitality industry, healthcare or jobs that are just below paying jobs such as in restaurants or fast food and so forth and so on so that does not give you a clear picture. If you just look at employment, one would have to look at real wages. When you look at real wages or real household income, one would have to determine who is calculating what is real because, as you know, in America, the consumer price index… in my view, grossly understates the rate of cost of living increases for the typical household….

- Marc Faber. Capital Account RT America.

@1 year ago
#Marc Faber #Quotes 

It is difficult to tell what will happen. I happen to believe that eventually we will have a systemic crisis and everything will collapse. But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don’t like bonds. I don’t particularly like equities, but I think equities are a better space to be in than bonds.

I own corporate bonds and I recently, as I wrote, I pulled some bonds from Kazakhstan because Kazakhstan economically is a much sounder country than the United States or any European country. But it is in small doses. I wouldn’t put all of my money in corporate bonds. They have an equity character. I also own equities still in Asia and as I pointed out already four months ago for the first time in my life, I bought equities in Portugal, Spain, Italy and France because they were unbelievably distressed. I think what people overlook today is they look at markets but they don’t look at what happens within the market. In the last 12 to 18 months the U.S. has massively outperformed European markets, Asian markets with a few exceptions and now some markets are relatively depressed. I could argue the Chinese stock market is now relatively depressed. So the asset allocators may move some money in Chinese stocks and then they can rally 10% to 20%.

The fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won’t. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols…Very happy. Very good for the Fed. Congratulations, Mr. Bernanke. I’m happy. My asset values go up but as a responsible citizen I have to say the monetary policies of the U.S. will destroy the world.

I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system. It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets and you have at the same time increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development. I don’t want to build a new business. But what I may do is look around the world, where are the distressed assets. So I will go and buy existing assets, takeovers. But takeovers don’t add to employment. They destroy employment. Secondly, I would just like to mention one thing. This money printing business, they have been saying that for the last 15 years that bailing out LTCM were necessary. Then they say the NASDAQ collapsed after March of 2000. We need to create another bubble, print money. They created a gigantic credit bubble and the misery that we have today.

Property prices in the south of the U.S. are very inexpensive compared to property prices around the world. The tragedy is that the people that were evicted from these homes have no access to credit. They have no money. They can’t buy them. So, with easy money by the Fed well-to-do people can buy these properties and then rent them out to the people that were kicked out of these homes. What a great achievement of the Fed! First, they create the property bubble and destroy the wealth of poor people, then the poor people have to rent and the rents have been up over the last 12 months. What a great achievement! Thank you, Mr. Bernanke.

I think that the trend for gold prices will be steady, but the trend for the dollar and other currencies will be down. In other words, in dollar terms the price of gold will trend higher. How high it will go, you have to call Mr. Bernanke and at the Fed, there are other people actually that make Mr. Bernanke look like a hawk. So they are going to print money. And they have done it for ages already and where has it led? To record high unemployment essentially since the Great Depression and structural unemployment. Unemployment goes among low paying jobs, not high paying jobs. So, you ought to own some gold, but don’t store it in the U.S. because the Fed will take it away from you one day.


- Marc Faber. Bloomberg.

@1 year ago
#Marc Faber #Quotes 

I tell you, sovereign credit in the Western world, they’re all bankrupt. But before they officially go bankrupt and can’t pay, they’re going to print money and massively so. That should be very clear. That’s the easiest way politically to postpone the hour of truth.


- Marc Faber. ETF Daily News.

@1 year ago
#Marc Faber #Quotes 

Well, it depends how you measure it, but in real terms if you look at export figures, industrial production in various countries and it continues on, then I would say there is practically no growth. Now if someone comes and argues Asia’s growing at 2 to 3% or someone else says, no, it’s contracting at 2 to 3%, to measure GDP is not all that relevant. All I can tell you is: There has been a very meaningful slowdown and i think it will continue to slow down.

I like the question: ‘Are we in a slowdown?’ There has been a very significant economic slowdown globally in real terms. We are in recession in Europe. We have hardly any growth if it was measured properly in the US and in Asia, I’m not saying we’re in a slump, but we have a tremendous recovery, 2009 to 2011, and just over the last six months the Asian economies have come off the peak. In other words, we have high economic activity but in my view, no longer any growth in Asia.

In Asia, we don’t have the unfunded liabilities that western European economies and the US and Japan have. We have essentially relatively solid financial conditions in Asia, but some countries, you know, like Vietnam car sales are down 40%. Steel production or steel usage is down 40% from the peak a few years ago. So we have in some countries already a meaningful slowdown and by and large, if you talk to businessmen, business has definitely slowed down considerably.  

I’m very concerned that regardless of who will be in the white house next year, the republicans or the democrats, the fiscal deficit will stay above a trillion dollars as far as the eye can see and that more money printing is on the way, QE3, QE4, and so forth and so on.

I want to clarify one point. I am bearish about the financial system and I think eventually it will collapse, but if you think it through, what is better to own in a systemic crisis, cash with the banks, treasury bills, or real estate in the US or equities? I think that real estate in the US.. I’m not talking about West 15 where Sandy just sold his condo 88 million. I’m talking about real estate in Arizona in Georgia, Nevada, that real estate is relatively inexpensive on an international scale. You have a house, eventually you keep that house unless you borrow too much money, but that is the problem.  

Equities like McDonalds will still be around no matter what crisis will happen in the world. Johnson & Johnson will still be around. Procter & Gamble, as well as the European blue chip companies and Asian blue chip companies. I’m not sure that sovereign bonds will still be around. That is another issue. 

Actually I do not watch movies. I watch Reality… Historical Precedents. The fact about people who own shares in Germany and properties in west Germany. The ones that own bonds and cash, cash and bond holders got wiped out precisely three times, lost everything. The ones who own equities. They still have the equities.

- Marc Faber. CNBC The Call.

@1 year ago
#Marc Faber #Quotes 

In order to exercise control over the population, governments throughout history have made people dependent on government largess. A government can make an increasing number of people dependent on its generosity by providing more and more benefits to a larger and larger share of the population.

Because of these “freebies,” people will go along with the government’s enlargement as a percent of the economy. The masses believe in their free lunch and because the business elite knows it can profit from the growth in government.

A political system controlled by an ignorant electorate that is manipulated by a dishonest and controlled media that dispenses propaganda on behalf of a corrupt political establishment can hardly be the path to lasting prosperity. In fact, I am surprised that economists continue to discuss GDP growth (usually in real terms), when they should be focusing on sustainable growth. Let me explain. Since 2000, US government debt has increased from US$5 trillion to over US$16 trillion. Over the same period, nominal GDP is up from approximately US$9.5 trillion to US$15.5 trillion.


- Marc Faber. in Daily Reckoning

1 year ago
#Marc Faber 

I think that, to be quite honest. I, as an investor, it concerns me that, for instance, the government appoints principally people connected to Mr Thaksin for, say, Thai [Airways] International.

As an investor, to me, it sounds very strange that people who run large companies are appointed by the government and that the government then favours people that are supportive of them. There is |still a lot of so-called cronyism. In other words, I have political power and you’re a businessman or you are someone who was at the party before and I give you a good job and the position of power.

The purchasing power of money has depreciated a lot, and maybe the gold is still cheap. I will never sell my gold.

Now I happen to believe if you have money on deposit in Thai banks, it’s much safer than if you have deposits with Citigroup, UBS, Royal Bank of Scotland and so on, because Thai banks don’t have huge derivative portfolios. JPMorgan, they have trillions of dollars in derivatives. Nobody knows how to value this ‘garbage’.

Thai property was still reasonably priced when compared with real estate in other parts of the world. He said he had invested in some Thai stocks, including Bumrungrad International Hospital, Bangkok Dusit Medical Services, CP All, Charoen Pokphand Food, and some companies related to telecommunications and real estate.


- Marc Faber. The Nation a Thai Newspaper.

1 year ago
#Marc Faber #Quotes 

Gold has a huge rally from around – the low was a 1522 last December and we are now over 1700 and I think we need a correction here. In fact, I am now bearish about practically all assets near term I think we’re entering a correction time where there will be some disappointments, where stock markets, from the recent times can easily drop 20%.

I think some people in the US, actually the ECRI already say that the US is in a recession. But of course we have to consider the following, an economy is a very large vessel, there are different sectors. And some sectors are improving like housing in the U.S. is improving. The problem with improvement in housing is that stocks have already gone up very substantially, they more than tripled from their low. And so we are ahead of ourselves. The Greek stock markets from its low is up more than 60%, so a 20% correction is nothing unusual.


- Marc Faber. Fox Business News.

1 year ago
#Marc Faber #Quotes 

There is not much global growth at the present time that’s the problem , because money does not flow into economic activity it flows into asset prices , into speculation and yes we have diverging move between equities and other asset prices and economic activity with economic activity worldwide being depressed. The money (from monetary easing) does not flow into economic activity, it flows essentially into asset prices, into speculation.

We have the money printing today which we did not have before and so it is very difficult to predict because it is a political decision, all I can say is if you look at history the most powerful people were usually in the end killed or hanged or crucified and the central bankers today are the most powerful people, so you could imagine what I am thinking about the central banks and what their leading employees will eventually happen to.

We don`t know when it will burst, but I could imagine that every inflation eventually came to an end. Consumer price inflation of the 1970`s came to an end, the asset inflation in equities, notably the Nasdaq in 2000 came to an end, then the commodities boom in 2007/2008 came to an end, the housing bubble came to an end.

Seems that all the money is flowing essentially into the hands of well-to-do people in the financial sector. I could imagine a situation where suddenly well-to-do people will suffer the most, either through increased taxation or a decline in asset prices.

Basically, if you are over-indebted, the one solution is to bring down debt but by extending more debt and encouraging more consumption, you do not do that. You just postpone the problem. You do not resolve it and in my view, the problem with money printing is that the money that is being printed or dropped as Mr Bernanke said from helicopters does not flow evenly to everybody and does not left all crisis at the same rate.


- Marc Faber. FNN Australia.

1 year ago
#Marc Faber #Quotes 

I own corporate bonds and I recently, as I wrote, I pulled some bonds from Kazakhstan because Kazakhstan economically is a much sounder country than the United States or any European country. But it is in small doses. I wouldn’t put all of my money in corporate bonds. They have an equity character. I also own equities still in Asia and as I pointed out already four months ago for the first time in my life I bought equities in Portugal, Spain, Italy and France because they were unbelievably distressed. I think what people overlook today is they look at markets but they don’t look at what happens within the market. In the last 12 to 18 months the U.S. has massively outperformed European markets, Asian markets with a few exceptions and now some markets are relatively depressed. I could argue the Chinese stock market is now relatively depressed. So the asset allocators may move some money in Chinese stocks and then they can rally 10 percent to 20 percent.

I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system. It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets and you have at the same time increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development. I don’t want to build a new business. But what I may do is look around the world, where are the distressed assets. So I will go and buy existing assets, takeovers. But takeovers don’t add to employment. They destroy employment. Secondly, I would just like to mention one thing. This money printing business, they have been saying that for the last 15 years that bailing out LTCM were necessary. Then they say the NASDAQ collapsed after March of 2000. We need to create another bubble, print money. They created a gigantic credit bubble and the misery that we have today.


- Marc Faber. Businessinsider.

1 year ago
#Marc Faber #Quotes 
Where To Safekeep Physical Gold?

You should dig a hole in your garden or hold it say I would think that Singapore Honk Kong or Dubai are reasonably safe. I do not think that Europe is a hundred percent safe because if say the US expropriated Gold, they would probably go to Europe as well and say you should do the same and so forth and since by then the central bankers will be in a really bad position, it would probably also implement that measure.


- Marc Faber. RT Capital Account.

1 year ago
#Marc Faber #Quotes 
What Would Save The Euro?

We have here a political issue. The bureaucrats in Brussels want to stay in power. They are going to do whatever they can to preserve the Euro. I don’t think the man on the street in Europe is interested in the Euro. If you ask them the question, do you really want to pay for the Spaniards, the Italians, the Greeks and it will cost you this much money out of your pocket, directly or indirectly through taxation or inflation or what not. They would say no. But the weak countries, they all want to stay in because they get the pensions in Euros. And if they exit, their currency say the Spanish peseta will be pegged at 50% lower rate than at the present base rate.


- Marc Faber. CNBC.

1 year ago
#Quotes #Marc Faber 
Consumer Price Index in the US Grossly understates the Rate of cost of living increases for the typical household

What we have had is a lot of people have lost their jobs but have found jobs that pay less… say they’re suddenly involved in hospitality industry, healthcare or jobs that are just below paying jobs such as in restaurants or fast food and so forth and so on so that does not give you a clear picture. If you just look at employment, one would have to look at real wages. When you look at real wages or real household income, one would have to determine who is calculating what is real because, as you know, in America, the consumer price index… in my view, grossly understates the rate of cost of living increases for the typical household….

- Marc Faber. Capital Account RT America.

1 year ago
#Marc Faber #Quotes 
Negative Real Interest Rates Create a lot of Volatility

I think China stocks are quite a good buy.

Investors will look back at the European crisis today and think we should have bought equities in 2012.

In this environment of negative real interest rates we will have a lot of volatility and there are two strategies you can use. One is to aggressively shift from one asset class to another. The other option is to segregate a portfolio equally amongst precious metals, equities, real estate and cash.

- Marc Faber. Opalesque Asia.

1 year ago
#Marc Faber #Quotes 

It is difficult to tell what will happen. I happen to believe that eventually we will have a systemic crisis and everything will collapse. But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don’t like bonds. I don’t particularly like equities, but I think equities are a better space to be in than bonds.

I own corporate bonds and I recently, as I wrote, I pulled some bonds from Kazakhstan because Kazakhstan economically is a much sounder country than the United States or any European country. But it is in small doses. I wouldn’t put all of my money in corporate bonds. They have an equity character. I also own equities still in Asia and as I pointed out already four months ago for the first time in my life, I bought equities in Portugal, Spain, Italy and France because they were unbelievably distressed. I think what people overlook today is they look at markets but they don’t look at what happens within the market. In the last 12 to 18 months the U.S. has massively outperformed European markets, Asian markets with a few exceptions and now some markets are relatively depressed. I could argue the Chinese stock market is now relatively depressed. So the asset allocators may move some money in Chinese stocks and then they can rally 10% to 20%.

The fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won’t. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols…Very happy. Very good for the Fed. Congratulations, Mr. Bernanke. I’m happy. My asset values go up but as a responsible citizen I have to say the monetary policies of the U.S. will destroy the world.

I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system. It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets and you have at the same time increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development. I don’t want to build a new business. But what I may do is look around the world, where are the distressed assets. So I will go and buy existing assets, takeovers. But takeovers don’t add to employment. They destroy employment. Secondly, I would just like to mention one thing. This money printing business, they have been saying that for the last 15 years that bailing out LTCM were necessary. Then they say the NASDAQ collapsed after March of 2000. We need to create another bubble, print money. They created a gigantic credit bubble and the misery that we have today.

Property prices in the south of the U.S. are very inexpensive compared to property prices around the world. The tragedy is that the people that were evicted from these homes have no access to credit. They have no money. They can’t buy them. So, with easy money by the Fed well-to-do people can buy these properties and then rent them out to the people that were kicked out of these homes. What a great achievement of the Fed! First, they create the property bubble and destroy the wealth of poor people, then the poor people have to rent and the rents have been up over the last 12 months. What a great achievement! Thank you, Mr. Bernanke.

I think that the trend for gold prices will be steady, but the trend for the dollar and other currencies will be down. In other words, in dollar terms the price of gold will trend higher. How high it will go, you have to call Mr. Bernanke and at the Fed, there are other people actually that make Mr. Bernanke look like a hawk. So they are going to print money. And they have done it for ages already and where has it led? To record high unemployment essentially since the Great Depression and structural unemployment. Unemployment goes among low paying jobs, not high paying jobs. So, you ought to own some gold, but don’t store it in the U.S. because the Fed will take it away from you one day.


- Marc Faber. Bloomberg.

1 year ago
#Marc Faber #Quotes 

Currently I am quite negative about equities for the next three months. I am not saying that they will collapse but I think the markets will go down. I will add to my positions when the markets correct here. I think they could easily correct in Europe by ten / twenty percent from the recent highs that we had.


- Marc Faber. CNBC India.

1 year ago
#Marc Faber #Quotes 

I tell you, sovereign credit in the Western world, they’re all bankrupt. But before they officially go bankrupt and can’t pay, they’re going to print money and massively so. That should be very clear. That’s the easiest way politically to postpone the hour of truth.


- Marc Faber. ETF Daily News.

1 year ago
#Marc Faber #Quotes 

I want to put this view in the context of having bought European shares in Portugal, Spain, Italy and France for the first time in my life three and four months ago, right at the lows and now these markets have rallied between 20 and 30% in a very brief period of time. I’m not selling them but I said when I was asked ‘Would you buy more?’, I said ‘No’. I want to wait for the market to settle down once again and then they asked me ‘By how much?’. I said, maybe the correction could be 20% but I said I don’t expect new lows.

You need a farm and you have to train yourself not to depend on the internet and mobile phones and so forth and so on because when it happens, it could happen because of a cyber attack that would trigger such an event or any kind of other act of warfare. but we have to prepare for that. it’s like you have an insurance. I don’t carry insurance policies but, say, you have insurance for all kinds of events. People who can afford should have insurance for that day when it will happen.


- Marc Faber. CNBC Squawk Master.

1 year ago
#Marc Faber #Quotes 

Well, it depends how you measure it, but in real terms if you look at export figures, industrial production in various countries and it continues on, then I would say there is practically no growth. Now if someone comes and argues Asia’s growing at 2 to 3% or someone else says, no, it’s contracting at 2 to 3%, to measure GDP is not all that relevant. All I can tell you is: There has been a very meaningful slowdown and i think it will continue to slow down.

I like the question: ‘Are we in a slowdown?’ There has been a very significant economic slowdown globally in real terms. We are in recession in Europe. We have hardly any growth if it was measured properly in the US and in Asia, I’m not saying we’re in a slump, but we have a tremendous recovery, 2009 to 2011, and just over the last six months the Asian economies have come off the peak. In other words, we have high economic activity but in my view, no longer any growth in Asia.

In Asia, we don’t have the unfunded liabilities that western European economies and the US and Japan have. We have essentially relatively solid financial conditions in Asia, but some countries, you know, like Vietnam car sales are down 40%. Steel production or steel usage is down 40% from the peak a few years ago. So we have in some countries already a meaningful slowdown and by and large, if you talk to businessmen, business has definitely slowed down considerably.  

I’m very concerned that regardless of who will be in the white house next year, the republicans or the democrats, the fiscal deficit will stay above a trillion dollars as far as the eye can see and that more money printing is on the way, QE3, QE4, and so forth and so on.

I want to clarify one point. I am bearish about the financial system and I think eventually it will collapse, but if you think it through, what is better to own in a systemic crisis, cash with the banks, treasury bills, or real estate in the US or equities? I think that real estate in the US.. I’m not talking about West 15 where Sandy just sold his condo 88 million. I’m talking about real estate in Arizona in Georgia, Nevada, that real estate is relatively inexpensive on an international scale. You have a house, eventually you keep that house unless you borrow too much money, but that is the problem.  

Equities like McDonalds will still be around no matter what crisis will happen in the world. Johnson & Johnson will still be around. Procter & Gamble, as well as the European blue chip companies and Asian blue chip companies. I’m not sure that sovereign bonds will still be around. That is another issue. 

Actually I do not watch movies. I watch Reality… Historical Precedents. The fact about people who own shares in Germany and properties in west Germany. The ones that own bonds and cash, cash and bond holders got wiped out precisely three times, lost everything. The ones who own equities. They still have the equities.

- Marc Faber. CNBC The Call.

1 year ago
#Marc Faber #Quotes 

I think European markets could easily correct 10 to 20 percent from the recent highs that we have had, but I don’t envision new lows. I bought some shares in Portugal, Spain, Italy, and France, and after I bought them in the last three to four months, the market rallied strongly.

I am negative on equities for the next three months, I’m not saying they will collapse but they will go down and I will add to my positions when the market corrects here. In the worst case scenario that the euro collapses and Spain and Italy for example exit the euro zone, the markets of these countries will adjust to the upside.

In the worst case scenario that the euro collapses and Spain and Italy for example exit the euro zone, the markets of these countries will adjust to the upside. Also if you are an investor in one of these countries, what are you going to be more comfortable holding — the deposits in one of your banks or equities? So, I think a lot of money is flowing into these equity markets because the perception is that they are safer than bank deposits.

I would hold physical gold with a country that has a culture with gold such as Australia. In a collapse, the gold price could fall 50 percent, but if everything else falls by 90 percent, then you are relatively well off. So I would hold some physical gold regardless of the economic outcome.


- Marc Faber. CNBC Asia.

1 year ago
#Marc Faber #Quotes