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Legendary investor, economist and market forecaster Dr. Marc Faber thinks central banks (CB) are not going to cut back the money printing. Just the opposite. He predicts CBs are going to print even more money at a faster pace to hold the failing economic system together for a little while longer. Dr. Faber explains, “What is perceived to be safe, namely cash, isn’t safe anymore. It is unsafe. You ask me what is safe? I don’t know what is safe anymore when you have money printers who print money indefinitely. I don’t think they can stop. I actually think they have to accelerate their money printing. So, stocks may go up, but in real terms, it doesn’t mean your standard of living will go up. Maybe the standard of living of the 50 richest people in the world will go up, but not the standard of living of the typical American . . . or the average American. That standard of living will go down. . . . All the money printing is a desperate measure to keep the voters from rebellion.”

Dr. Farber predicts that not only are we going to see more asset inflation, but dramatic wage inflation too. Dr. Faber, who holds a PhD in economics, says, “What I think will happen, and most people have not really considered, we will get wage inflation. For the first time since the late 1970’s, we will get accelerating wage inflation, and in some cases, quite dramatic. In some states, the minimum wage is $15. I could see that going up to $30 per hour very quickly. I don’t think inflation is ‘transitory’ (as the Fed proclaims). We will not have stagflation. We will have something worse. We will have rising prices and a depression in the standard of living of most people.”

…click on the above link to read the rest of the article…

“Goodbye Asset Inflation” – Marc Faber Fears Funding Chaos Contagion From Repo Markets

October 27, 2019

“Goodbye Asset Inflation” – Marc Faber Fears Funding Chaos Contagion From Repo Markets

Faber wrote in his Monthly Market Commentary for October, under the title : THE THREAT TO ACADEMIC FREEDOM AND TO THE RIGHT TO FREEDOM OF OPINION IS A MENACE TO LIBERTY,

The historian Niall Ferguson recently wrote an article entitled: A message to all professional thinkers – we either hang together or we hang separately.

Ferguson explained that:

“In every case, the pattern is the same. An academic deemed to be conservative gets ‘called out.’
The Twitter mob piles on.
Mindless mainstream media outlets amplify the story.
The relevant authorities capitulate” and get rid of the academic…
A month rarely passes without some conservative academic being taken down.”

The French philosopher and best-selling author, Alain Finkielkraut who is a member of the Academie Francaise, recently said that, far-left protests against him mean he “can no longer show my face” on the street.

The “threat to academic freedom” is at the same time an assault on “freedom of speech” and “expression,” and therefore, should concern all of us.

Under Trouble in the US financial Wonderland we discuss the funding chaos in the repo market.

Several experts have downplayed the recent chaotic behaviour but I take it far more seriously because it indicates to me that liquidity has become tight – at least for some market players.

Should a widespread liquidity crunch follow – “good bye asset inflation” and welcome “widespread asset deflation” as well as QE4.

September 24, 2019, was most likely the beginning of the end of the Unicorn bubble as well as for the trend to allocate pension assets to private equity managers. There may be some liquidity problems at some private equity firms.

…click on the above link to read the rest of the article…

Marc Faber: In the Age of Cyber-Terrorism, Every Investor Must Own Gold

August 20, 2017

Marc Faber: In the Age of Cyber-Terrorism, Every Investor Must Own Gold

Take it from “Dr. Doom”: own some physical gold and keep it out of the banking system.

Dr. Marc Faber, a legendary investor and the editor/publisher of the Gloom, Boom & Doom Report, is well known for his contrarian investing style.

In a recent Metal Masters interview with the Hard Assets Alliance, he noted that the biggest geopolitical risk for Americans today is not a conventional war but rather cyber-attacks that could take down the US power grid.

In such a scenario, gold would become an irreplaceable medium of exchange. But it’s not the only reason to own gold today.

Diversified Assets Outside the Banking System

Faber grew up in Switzerland right after World War II, a tough time that caused his family to distrust paper money and taught him the importance of precious metals as a safety net.

Faber remembers how his father talked about rich people as millionaires. “That, in the ‘50s and ‘60s and ‘70s, was a lot of money. Today, a million is nothing at all—small change. Unfortunately. When people talk about, ‘Oh, there is no inflation in the system,’ this is nonsense. Compared to assets, money has lost a tremendous amount of purchasing power.”

After working on Wall Street for over two decades, Faber’s assets consisted mainly of bonds, equities, and real estate. He says it was in the 1990s when he realized that “it’s good to have a diversified asset outside the banking system and not financially related” and began to purchase some physical gold every month.

The Fed largely ignores gold as an asset, he says, because “gold is an embarrassment to central banks.”

…click on the above link to read the rest of the article…

Dr. Doom’s Back: Marc Faber Warns Markets Will Fall “Like An Avalanche… Trump Can’t Stop It”

February 27, 2017

Dr. Doom’s Back: Marc Faber Warns Markets Will Fall “Like An Avalanche… Trump Can’t Stop It”

“One man alone cannot make ‘America great again’. That you have to realize,” warns Marc Faber, the editor of “The Gloom, Boom, & Doom Report,” reminding the world that the US stock market is vulnerable to a seismic sell-off that won’t be caused by any single catalyst. His argument: Stocks are very overbought and sentiment is way too bullish for the so-called Trump rally to continue.

“Very simply, the market starts to go down. As it goes down, it will start triggering selling, and then it will be like an avalanche,” said Faber recently on CNBC’s Futures Now. “I would underweight U.S. stocks.”

Faber, a supporter of President Donald Trump, isn’t blaming the new administration for his bearish forecast:

“Trump, unlike Mr. Reagan, is facing huge, huge headwinds — including a debt to GDP that is gigantic, as it is in other countries.”

Faber lists rising interest rates and record earnings and margins as additional risks to the historic rally.

The Dow Jones Industrial Average closed at a record level for a twelfth consecutive session today with the S&P 500 to see the fewest declines in February than in any month since May 1990.

The investor said that markets in Mexico, Brazil, and Asia also have been picking up significant gains so far this year. However, Faber doesn’t expect the worst-case scenario for all countries that have been benefiting from a strong run.

“China looks quite attractive. For the next three months, money can flow into China. The economy, surprisingly, has begun to do quite well. We see that in retail in Hong Kong. We see that in the hotel industry, and we see that in demand for commodities,” he said.

Faber says that resource commodities such as copper and gold would probably bring the traders solid profits this year.

“When you look at Trump and his administration, and the way the budget is, I think further money printing down the line is inevitable,” he said, stressing that such a policy could push commodities even higher.

We’ve Reached the “Zero Point” of Debt Creation

September 2, 2016

We’ve Reached the “Zero Point” of Debt Creation

Hurtling toward a massive financial crisis.

Forty-five years and counting: We’ve been on a debt spree since the early 1970s when we went off the gold standard, covering every possible angle. Trade deficits, government deficits, unfunded entitlements, private debt – you name it! Our total debt has grown 2.5-times GDP since 1971.

How could economists not see this as a problem? How is this the least bit sustainable?

It isn’t. We’re hurtling toward a massive financial crisis, and all we have to show for it are financial asset bubbles destined to burst. And when they do, they’ll wipe out the artificial wealth they’ve created for many decades… in just a few years, as they did from late 1929 into late 1932!

The chart below shows the common-sense truth.

As with any drug – and debt is a financially enhancing drug – it takes more and more to create less and less of an effect. Eventually, you reach the “zero point” where there is no effect and the drug kills you from its very strain and toxicity.

We’re rapidly approaching that zero point, after every dollar of debt has produced less and less GDP steadily since 1966:

Note that the anomaly in the chart after 2008 was due to the impact of unprecedented QE. Ever since that disruption, the trends have pointed back down – making a beeline toward that zero point again.

Back in 2002, Swiss investor and market prognosticator Marc Faber published a similar chart. His findings showed the zero point for debt creation would occur around 2015. With updated data, we now see that the zero point will hit around the beginning of 2017.

…click on the above link to read the rest of the article…

Albert Edwards Hits Peak Pessimism: “S&P Will Fall 75%”, Global Recession Looms

January 13, 2016

Albert Edwards Hits Peak Pessimism: “S&P Will Fall 75%”, Global Recession Looms

2016 has thus far been a year characterized by remarkable bouts of harrowing volatility as the ongoing devaluation of the yuan, plunging crude prices, and geopolitical uncertainty wreak havoc on fragile, inflated markets.

With asset prices still sitting near nosebleed levels after seven years of bubble blowing by a global cabal of overzealous central planners with delusions of Keynesian grandeur, some fear a dramatic unwind is in the cards and that this one will be the big one, so to speak.

December’s Fed liftoff may well go down as the most ill-timed rate hike in history Marc Faber recently opined, underscoring the fact that the Fed probably missed its window and is now set to embark on a tightening cycle just as the US slips back into recession amid a wave of imported deflation and the reverberations from an EM crisis precipitated by the soaring dollar.

One person who is particularly bearish is the incomparable Albert Edwards. SocGen’s “uber bear” (or, more appropriately, “realist”) is out with a particularly alarming assessment of the situation facing markets in the new year.

“Investors are coming to terms with what a Chinese renminbi devaluation means for Western markets,” Edwards begins, in a note dated Wednesday. “It means global deflation and recession,” he adds, matter-of-factly.

First, Edwards bemoans the lunacy of going “full-Krugman” (which regular readers know you never, ever do):

I have always said that if inflating asset prices via loose monetary policy were the route to economic prosperity, Argentina would be the richest country in the world by now ?and it is not! The Fed?s pursuit of negligently loose monetary policies since 2009 is a misguided attempt to boost economic growth via asset price inflation and we will now reap the whirlwind (the ECB, Bank of Japan and the Bank of England are all just as bad).

…click on the above link to read the rest of the article…

China Has A “Colossal Credit Bubble” And No One Knows How It Will Unwind, Marc Faber Warns

January 6, 2016

China Has A “Colossal Credit Bubble” And No One Knows How It Will Unwind, Marc Faber Warns

A little over a week ago, Marc Faber dialed in from Thailand to chat with Bloomberg TV about the outlook for US equities, the American economy, and USTs in the new year.

The US is “already in a recession,” the incorrigible doomsayer said.

Stocks will head lower in 2016, Faber continued, taking the opportunity to mock the sellside penguin brigade for adopting a universally bullish take on markets going forward. “Well, I don’t think that the U.S. will continue to increase interest rates,” he concluded, before predicting what we’ve been saying for years, namely that in the end, the Fed may be forced to do an embarrassing about-face and return to ZIRP and eventually to QE. “In fact, given the weakness in the global economy and the deceleration of growth in the U.S., I would imagine that by next year the Fed will cut rates once again and launch QE4.”

On Wednesday, Faber was back on Skype with Bloomberg to chat more about his outlook for 2016.

Asked why he believes the US is already in a recession, Faber says all one need do is “look at exports, look at industrial production and the slowdown in credit growth.”

As for what’s likely to work as an investment now that central banks have created bubbles everywhere you look, Faber says the following:

“With the exception of those that held Bitcoins, the performance of all asset classes has been poor. The Fed has created an atmosphere where the future return on assets whether it’s stocks or bonds or art will be poorer.”

Next, he bemoans the lack of market breadth, and warns that although the “indices are holding up well, the majority of market is already down 20% or more.” The S&P, he says, peaked in May and will fall 20-40%.

…click on the above link to read the rest of the article…

Marc Faber Fears No Soft-Landing Of China’s “Credit Bubble Of Epic Proportions”

October 26, 2015

Marc Faber Fears No Soft-Landing Of China’s “Credit Bubble Of Epic Proportions”

“Investors should (and most don’t) realize China is a credit bubble of epic proportions,” warns an anxious Marc Faber during a brief Bloomberg TV interview. “China is not just a country, it’s an empire,” Faber adds, and warns that while some sectors may have growth (“just ask Yum Brands” he jokes), “but other very important sectors like industrial production aren’t growing at the present time.” In fact, Faber warns “I don’t think China’s economy is growing at all,” and while policy-makers may be able to “cushion the downturn somewhat,” he warns that achieving any soft-landing will be “very difficult,” even as he expects China to continue devaluing the Yuan.

Faber speaks to Bloomberg TV’s Stephanie Ruhle,

Some key excerpts…

On the mythical soft-landing…

FABER: I think it’s very difficult if you had the kind of bubble like you had in China, and the credit bubble, to then engineer a soft landing. You could maybe cushion the downturn somewhat, but the fact is I don’t believe that the economy isn’t growing at all, but I think that I have argued and this for the last 18 months that the economy was slowing down meaningfully, and that growth would be roughly at three to four percent, which it is at the present time, I would imagine.
Is China an accident waiting to happen?

FABER: Well it depends what an accident is in terms of definition, but I would say this. We have had very heavy capital flight over the last eight, nine months coming out of China. And if I had to bet on someone, the local knowledge or some economy somewhere in the world talking up China and how great it is, I would bet on the locals, who are shifting money out of China at the record level at the present time.

…click on the above link to read the rest of the article…

It’s Not If But When

September 29, 2015

It’s Not If But When

Since the 2008 crash there has been much talk about how the fundamentals have not been dealt with and the fact that the can has only been kicked down the road. Political mavericks and commentators such as Ron Paul have frequently pointed out that nothing has really changed and that we are heading for even bigger disasters ahead if we continue to play ostrich.

Likewise, the economic doom and gloom pundits – such as Peter Schiff, Marc Faber and Gerald Celente have been banging the drum for an unprecedented collapse that will make the 1929 western economic slump look like a tea party. First it was to be 2010, 2012, then 2013 and so on, but here we are still, in the tail end of 2015 and the dreaded collapse has still failed to materialise.

So, I’m sure that some people are probably wondering if these people are just carpet baggers, making a swift buck out of fear of an economic downturn. The truth is that we never left the economic downturn – we are currently in a period of manipulation that’s sole purpose is to mask the fact that there has not been a boom (or recovery if you like) to trigger the next bust.

The world economy is largely sustained by confidence and belief that pieces of paper (or digital records) have some inherent value relative to each other and relative to the physical realities of the world. In truth a paper note is worthless if people do not recognise its symbolic value or believe that the relationship between its value and the value of real-world objects (e.g. commodities) has been perverted or destroyed.

…click on the above link to read the rest of the article…

“It’s A Tipping Point” Marc Faber Warns “There Are No Safe Assets Anymore”

September 3, 2015

“It’s A Tipping Point” Marc Faber Warns “There Are No Safe Assets Anymore”

Markets have “reached some kind of a tipping point,” warns Marc Faber in this brief Bloomberg TV interview. Simply put, he explains, “because of modern central banking and repeated interventions with monetary policy, in other words, with QE, all around the world by central banks – there is no safe asset anymore.” The purchasing power of money is going down, and Faber “would rather focus on precious metals because they do not depend on the industrial demand as much as base metals or industrial commodities,” as it’s now “obvious that the Chinese economy is growing at nowhere near what the Ministry of Truth is publishing.”

Faber explains more… “I have to laugh when someone like you tries to lecture me what creates prosperity”

Some key exceprts…

On what central banks hath wrought…

I think that because of modern central banking and repeated interventions with monetary policy, in other words, with QE, all around the world by central banks there is no safe asset anymore. When I grew up in the ’50s it was safe to put your money in the bank on deposit. The yields were low, but it was safe.

But nowadays, you don’t know what will happen next in terms of purchasing power of money. What we know is that it’s going down.

On the idiocy of QE…

In my humble book of economics, wealth is being created through, essentially, a mixture of capital spending, and land and labor. And if these three production factors are used efficiently, it then creates a prosperous society, as America became prosperous from its humble beginnings in 1800, or thereabout, to the 1960s, ’70s. But it’s ludicrous to believe that you will create prosperity in a system by printing money. That is economic sophism at its best.

…click on the above link to read the rest of the article…

Government – Designed for Robbery

May 28, 2015

Government – Designed for Robbery

Why I’m Looking Forward to the Next Big Crash

First, the Dow dropped 190 points on Monday – or 1%. It was threatening to close below 18,000 for the first time in almost three weeks. We’ll wait to find out. Yesterday, a London-based magazine and a TV station interviewed us. Both asked if we were “pessimistic.”

“Of course not,” we replied. “We expect today’s financial system to fall apart in a terrible crash and depression. But we’re looking forward to it.”

This was not exactly the answer they were looking for… And there’s not enough time in an interview to explain why this view makes any sense at all. The audience must have thought we had lost our mind.

We also had a meeting with our old friend and editor of the Gloom, Boom & Doom Report Marc Faber yesterday. He helped make sense of our “pessimism.”

“The system is corrupt,” he said. “The government. The banks. The central banks. Big business.”

People always use their wealth and power to try to protect themselves. Sometimes they use it to take wealth and power away from others, too. That’s corruption.

Of course, that’s what government was designed for: to allow one group to rob another. If the elite could take no advantage from it, why would they bother with government at all?

Dirty Work

We baby boomers took over in the 1980s. We have been in charge ever since. Since then, we’ve corrupted the economy, the markets, and government. By the 1970s, some of the dirty work was already done: The Nixon administration had ditched honest money. Now, the coast was clear. We could use this new credit-based money to pervert the whole shebang.

…click on the above link to read the rest of the article…

Diversify With “Physical Precious Metals Stored Outside The U.S.” – Faber – GoldCore United States

January 1, 2015

Diversify With “Physical Precious Metals Stored Outside The U.S.” – Faber – GoldCore United States.

Dr Marc Faber, respected economic historian and author of the respected monthly newsletter, the ‘Gloom, Boom and Doom Report’,has warned that 2015 is set to be very volatile, urged international diversification and owning “physical precious metals stored outside the U.S.”

In another insightful and witty interview with Bloomberg Television’sIn the Loop, with Betty Liu, Erik Schatzker and Brendan Greeley, the ever charming and affable Dr. Marc Faber reaffirmed his long-standing preference for investing in emerging eastern economies, his lack of faith in the dollar and advised Americans to own gold.

Faber fails to recommend a single U.S. stock in 2015 and when asked whether recent events in Greece were a buy or sell signal, Faber began by pointing out that persistent intervention by central banks into markets had made making predictions far more complicated.

Some commodities have soared in the last six months, wheat has doubled, while the price of oil and natural gas had collapsed indicating great volatility. Forecasters surveyed by Bloomberg had been consistently bearish on bonds for years, until this year since treasuries outperformed the S&P in 2014.

Hedge funds generally only generated returns of around 1%. In light of these discrepancies and central-bank induced distortions to the market, Faber emphasises the need for real diversification.

…click on the above link to read the rest of the article…

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