Wednesday, July 17, 2019

Marc Faber: Global Economy is on the Cusp of a Recession

  • According to Dr. Faber, the global economy is on the cusp of a recession. Investors are advised to batten down the hatches.
  • A global / domestic economic maelstrom of epic proportions where paper assets denominated in the reserve currency lose up to 80% is possible.
  • Few asset classes will endure the economic storm ahead, however, safe havens include gold, silver, PMs shares and cryptocurrencies.
  • Despite the remarkable increases in modern productivity given quantum leaps in access to technology and information, living standards are sagging.
  • Incomes have not matched increases in the cost of living.
  • The duo concur that the erosion of the standard of living is directly correlated to profligate money expansion, which acts as a reverse “Invisible Hand.”
  • Both the guest/host advocate diversification of asset classes, increasing the weighting of safe haven, hard money assets in the coming years to shield wealth from potential economic volatility.
- Source, Gold Seek Radio

Monday, July 8, 2019

Politicians Like to Blame Everyone Else For the Problems They Created

Referring to China, Kyle Bass claimed at a recent investment conference that, “Right now, there is no trust and no rule of law. The Chinese government lies, cheats, and steals as a national ideology.”

I heard that the audience rewarded his candid statements with applause.

Blaming the Chinese for everything appeals to the Democrats and the Republicans alike, and that is what counts for President Trump ahead of the 2020 elections. In fact, I find the applause following Bass' accusations deeply disturbing given the relatively high social standing and knowledge of the conference attendees. It also reminds me of so many other occasions in history when leaders blamed other people (usually minority groups and foreigners, or whosoever is convenient at the time) for their own shortcomings and failures.

Not long ago, Elaine Chao (the current US Secretary of Transportation) opined that, "Smoot and Hawley ginned up the Tariff Act of 1930 to get America back to work after the Stock Market Crash of ’29. Instead, it destroyed trade so effectively that by 1932, American exports to Europe were just a third of what they had been in 1929. World trade fell two-thirds as other nations retaliated. Jobs evaporated."

I think it is fair to say that the Smoot–Hawley Tariff did not cause the depression (there were numerous other factors at play), but it certainly accelerated the downturn and prolonged the global economic slump as global trade collapsed. Currently, the global economy (including the US) is already weakening badly (many sectors are already in recession) and the trade war will aggravate the economic downturn. US economic weakness is indicated by strengthening US Treasuries. It is also confirmed by the decline in oil and lumber prices. Furthermore, the US Markit manufacturing PMI just dropped by 2 points to a near-recession 50.6 level.

In general, I believe that Wall Street strategists and economists grossly underestimate the downside risk of equities. I concede that the US stock market is becoming near-term oversold and, therefore, could rebound in June and July (traditional summer rally). The US stock market is, however, far from oversold from a longer-term perspective. My advice: Sell the rallies and reduce equity positions.

Finally, remember regarding the constant China bashing that, as Daniel Kahneman observed, “A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth. Authoritarian institutions and marketers have always known this fact.”

- Source, Marc Faber

Thursday, July 4, 2019

Marc Faber: Massive Asset Inflation, Central Banks Confusion

Jason Hartman talks with Marc Faber, editor at Gloom, Boom & Doom Report, about what's going on in our economy with the massive asset inflation that's hit in the past few years. The two examine what central banks will have to do in order to deal with the looming shortages and what investments can buck that trend when it arises.

Saturday, June 29, 2019

Marc Faber on US China Trade War, the Japan Trap

With global markets struggling for direction after a rocky start to the year, Dr Doom has been conspicuously absent from the conversation. Investment adviser Marc Faber, 72, who adopted the nickname in 1987 after a newspaper column highlighted his contrarian outlook on markets, has had a quiet six months.

Faber – a once regular guest on business news shows such as CNBC’s Squawk Box and Bloomberg Television – has faded from view since the publication of his October newsletter The Gloom, Boom & Doom Report for comments that were condemned as racist. This included a passage where Faber used offensive racial references in laying out a bleak picture for the US if its early immigration flows had been from Africa rather than Europe. He has since been dropped from the booking lists for programmes at Fox News and CNBC, according to Reuters.

At the time, Faber told Canada’s Global & Mail he stood by the remarks, saying in an email exchange that he did not regret writing the passage and that he had a free right to express his views.

When This Week in Asia spoke to Faber at his suite at the Grand Hyatt in Hong Kong this year, he sounded resigned to the loss of his appearances on business television.

“Everything in life and the universe has a timeline, it is transient. In other words, what you have today, you may not have tomorrow,” Faber said.

Known for a keen interest in history, and the works of innovators such as Russian “wave theory” economist Nikolai Kondratiev, Faber has slipped from the public spotlight just as global markets have entered a period of heightened volatility.

Faber was widely considered media gold at times of crisis for his tendency to speak candidly, tapping a pragmatism that seems tied to his upbringing in Zurich.

Faber also has a solid record in calling the market correctly. Among Barron’s Roundtable members in 2002 to 2011, he scored the second highest annualised return of 23.4 per cent among the eight annual stock-pickers, according to Pundit Tracker.

In February, the current market turmoil had not set in, yet Faber foresaw what was to become a major turning point for the markets, spelling out a gloomy forecast just days before the Dow Jones Industrials would record its largest single-day point decline.

“I don’t think markets will be very attractive this year and I want to own some cash,” Faber said at the time.

On May 1 he wrote in a monthly commentary that January’s high of 2,872 for the S&P 500 was a “major top”.

He advised investors to consider US government bonds, even as he cautioned in the long term that the US dollar was a “doomed currency”.

“My view is that a cash portfolio is safer with Treasuries than with banks,” Faber said.

In April, Faber told This Week in Asia he still favoured US Treasuries at the current yield on the 10-year near 2.9 per cent.

“The whole investment community, with a few exceptions, is negative on Treasuries. I have a different view,” Faber said. He holds about 30 per cent of his own investible assets in US government debt...

Saturday, June 22, 2019

Faber: Can’t See Another Bull Market in My Lifetime

Emerging market stocks will outperform U.S. equities when another bull market comes, noted bear Marc Faber contended Tuesday. But Faber sees one problem — he believes markets will not enjoy another bull run in his lifetime.

Still, the Gloom, Boom & Doom Report publisher sees a potential recovery for some emerging market economies, particularly Russia and Brazil, which have endured a recent slowdown.

“There are some that are extremely depressed that could have large rebound potential,” Faber said during a Tuesday evening panel discussion at the Inside ETFs conference in Hollywood, Florida.

Stock prices have broadly fallen worldwide this year, with lower commodities prices and fears of a global slowdown contributing to investor concerns. Economies dependent on natural resources have been hit particularly hard. Brazil and Russia, once stars of the emerging world, have been damaged by oil as well as political issues.

While Faber has made a name on pessimism, he contended that bright spots for potential growth still exist in emerging markets. He pointed to Cambodia and Vietnam, among other Asian economies.

“I wouldn’t take an across-the-board negative view about emerging economies,” Faber said.

Another investor on the panel Tuesday stressed that market watchers should not package all emerging economies into one basket. Marten Hoekstra, CEO of Emerging Global Advisors, is particularly optimistic about growth prospects for India, the world’s second-most populous country.

His funds have attempted to benefit from consumer demand there through consumer discretionary and staple stocks, as well as health care, telecom and utilities companies. While Emerging Global’s India Consumer ETF (INCO) has fallen this year, Hoekstra touted its prospects for long-term investors as consumer spending power grows in India.

He stressed that the Indian economy does not rely on oil or natural resources, which reduces its downside risk if the commodities crunch persists.

“If you’re generally negative on oil, you’re probably bullish on India,” Hoekstra said.

Mark Yusko, founder and CEO of Morgan Creek Capital Management, said during his annual “bold predictions” talk on Monday that India had attracted his attention and would perform better than most emerging economies.

Despite Hoekstra’s optimism, widely followed commodities commentator Dennis Gartman, who was also on the panel Tuesday, said that he had no immediate plans to invest in emerging market economies.

“It is the continued reliance upon commodity prices that causes me a great deal of concern,” he said.

Gartman contended that corruption in some emerging market governments reduces the safety of investing in those locales.

- Source, CNBC

Wednesday, June 12, 2019

Marc Faber: The Coming Pension Crisis And Its Subsequent Fallout

Returning SBTV guest Marc Faber, editor and publisher of “The Gloom, Boom & Doom Report”, warns about the under-funding in public and private pensions. 

Will there be pitchforks when pensioners realize there is no money available for their retirement?

- Source, SBTV

Thursday, June 6, 2019

Marc Faber: What should a Turkish investor do?

After successfully anticipating the 1987 Wall Street crisis, world-renowned investor Marc Faber, nicknamed kanal Doctor Doomsday ', answered the questions of economy journalist Erkan Öz in the Real Economy program on Youtube.

Faber made evaluations about the future of the world economy and Bitcoin.

Faber on the strong appearance of the dollar; While Central Banks like Europe, China and Japan are printing money, the Fed is going to shrink the balance sheet, and in this case, the Dollar remains relatively valuable against other currencies, but US President Donald Trump is not happy with the situation. Or Trump thinks the Fed is making a mistake. Who knows, maybe Fed has made a mistake. Kim

Faber said there was a significant slowdown in the global economy, a similar slowdown was observed in 2015, but this recession did not follow a recession, but this time he saw a high recession. He considered the possibility of recession as ın a higher probability than many people believe Res.

He said the Fed believes it will lower interest rates and that if the exchange rate falls by 10 percent, they will do so.
If you are in Turkey, you may need to keep more horses and silver

Faber reminded that the German economy was in trouble with the inflation between the years 1919-1923 and the Germans, who kept gold and silver in their hands, were lucky. Faber emphasized that he lost most of the population during that hyperinflation period and therefore bölüm It may be a good idea to keep gold and silver ett.

"The question is how much (gold and silver) should keep?" He reminded Faber, "If you live in Turkey, according to those who live in Switzerland or Japan may need to hold a larger amount," he said.

Faber also loved gold, but the central banks of the world compared to the amount of money in gold, silver and platinum performance could not be expected to draw attention.

renowned experts said that investors should be ready to diversify geographically, "If you are in Turkey and Turkey in all of your money if you are in an're more vulnerable to losses in value against the Turkish lira," he said.

Faber emphasized that it would be easier for investors to F hedge orsa themselves in a possible downtrend if part of their portfolio is located in the US, European or Asian markets.
”Bitcoin can become standard“

Faber said that he believes that 20-30 years later, the current children would not use paper money, he said:

Ebilir Blockchain technology is very interesting and Bitcoin can become a standard here. It's worth playing with a small portion of your money.

- Source, Paraanaliz

Friday, May 31, 2019

BITCOIN Bitcoin runs past Stock Market in early half of 2019

In terms of increased valuation and competitive growth, Bitcoin [BTC] has been one of the stand-out performers of this year. The digital asset witnessed major price surges which resulted in a massive hike, breaching the $8,000 range for the first time since August 2018. The digital asset also managed to reform the opinion of former critics of Bitcoin, such as Marc Faber and Mark Mobius, who had earlier criticized the functionality and value of Bitcoin from an economic standpoint.

The improved development can also be verified in terms of numbers and market comparison as Anthony Pompliano, CEO of Morgan Creek Digital recently shared a tweet which demonstrated the early half performance of Bitcoin.

In terms of increased valuation and competitive growth, Bitcoin [BTC] has been one of the stand-out performers of this year. The digital asset witnessed major price surges which resulted in a massive hike, breaching the $8,000 range for the first time since August 2018. The digital asset also managed to reform the opinion of former critics of Bitcoin, such as Marc Faber and Mark Mobius, who had earlier criticized the functionality and value of Bitcoin from an economic standpoint.

The improved development can also be verified in terms of numbers and market comparison as Anthony Pompliano, CEO of Morgan Creek Digital recently shared a tweet which demonstrated the early half performance of Bitcoin.

Pompliano laid out a comparison between the stock market and Bitcoin, where it was observed that the stock market market cap was up by 12 percent in 2019, whereas Bitcoin exhibited a staggering 111 percent growth since January 1, 2019.

It was observed that the surge was particularly dominant between April and May, when the prices of Bitcoin improved by almost $2,000.

- Source, AMB Crypto

Thursday, May 16, 2019

Marc Faber: All Fiat Currencies Will Collapse Against Precious Metals

I just wrote an essay about monetary inflation and the social impact of monetary inflation, because depending how the monetary inflation works through the system… in the case of hyperinflation, Germany in 1922, 1923, the middle class was essentially eliminated. They lost basically most of their savings one way or another. 

But the rich people made a lot of money. And I'm comparing it to the current time, where the middle class hasn't lost money per se, but because the rich people became so rich, the middle class has kind of been pushed down relative to the super rich people. That creates then an unfriendly environment.

The people that vote, they don't understand a lot. But it's very easy for a politician to go to people and say, "You know why you're not doing well? It's because of Jeff Bezos, he's got so much money, and because of Warren Buffet, he's got so much money, and Bill Gates, and so forth. And because of these hedge fund managers, they don't pay any tax or they don't pay much tax," which is actually true. The corporate world in America pays very little tax compared to individuals. If you look at the composition of tax revenues by the government, the bulk is paid by individuals, not by the corporate sector.

And so, through destroying wealth and income inequalities, the mood is in favor of taking money away from the wealthy people and distributing money to the ordinary people. And then they see, the ordinary people, how much is being spent on defense, in the case of the U.S., close to 750 billion dollars a year. And a lot of it is not accounted for. And they say, "Well, this money shouldn't be spent on defense. It should be spent on social programs," and so forth and so on. So the mood, towards socialism, especially we have surveys that showed the millennials, about 60% of the millennials, they are in favor of more government interventions.

The one thing I want to say, that everybody who lived through the monetary inflation of Germany - which ended up in kind of a hyperinflation, but I just want to explain - in the case of Germany, the hyperinflation was also made possible because the other countries didn't inflate. And so the mark depreciated against the foreign currencies, which then added to inflationary pressures. In the present state of monetary policy around the world, because everybody prints money, currencies don't collapse against each other, with very few exceptions like the Turkish lira and the Argentine peso and so forth. But basically, the major currencies, they trade against each other.

So where will the collapse of the currencies come from? In my opinion, they'll all collapse against precious metals. And it is conceivable, and this is something we just don't know, it is conceivable that they'll also collapse against some cryptocurrencies. Now, I think there is a chance, we're not sure - this is a kind of a theory - it is conceivable that Bitcoin becomes the standard, the gold standard of cryptos. But I'm not sure.

All I want to say, investors, in an environment such as we have of money printing, they need to diversify. They need to own some equities. We don't know whether these monetary inflations will end up with a deflationary bust, in which case you may want to own some U.S. Treasuries, or it could lead to high inflation, consumer price inflation, in which case you want to own maybe a farm or some properties overseas. Or you may wish to own some precious metals. I think in any scenario, you should own some precious metals. Or the question is, should you own 3% of your money in precious metals or 90%? That everybody has to decide for himself. I recommend about 20, 25% of your assets in precious metals.

And as to the question, which one is (likely to perform) best? I think platinum is the cheapest at the present time of the precious metals. And I think it has actually a favorable outlook. I think there will be a supply shortage, and that the price could significantly outperform gold and silver.

- Source, Marc Faber

Saturday, May 11, 2019

Marc Faber: The Dollar Should Weaken and the Stock Market Will Follow

I think the dollar is strong because many investors argue that the economy in the U.S. is either better conditioned than European economies. Who knows? But one reason the dollar has been strong is you have all these negative interest rates in Europe. In Germany the 10-year yield is now negative, and in Japan as well, in Switzerland as well. 

And in Spain you have interest rates on the 10-year government bonds of 1%, whereas in the U.S. it's 2.58%. So, I could argue it's logical that if you get more than twice as much interest in U.S. Treasuries than in Spanish bonds, and you're an insurance company in Europe, or sovereign fund in the world, you rather buy U.S. Treasuries than Spanish bonds. I think it's quite logical. So, I think that has supported the dollar.

But I personally, I think the dollar should in due course weaken, and as the dollar weakens it could also trigger weakness in the stock market.

The Chinese had all this excessive credit growth. Now you could argue, well, they have this excessive credit growth because they have also a very high propensity, or rate of capital spending to build apartment buildings and bridges and roads, and the whole infrastructure. 

This is very costly. And so the borrowings are very high. But whether China will go into recession or not is a question also, can in China some sectors be in a recession, like car sales are down this year, and other sectors continue to expand? It's a huge country. It's actually almost a continent with 1.3 billion people. So, different sectors will perform differently. 

But since I live in Asia, my observation is that there has been a slowdown in economic activity. We're not in a recession, but we're in a very low-growth phase. There's very little growth at the present time, and if there is growth it is because of borrowings… but that is also the case in the U.S. Without a trillion-dollar deficit and the debt build-up, student loans and car loans and everything, and credit card loans, the U.S. economy wouldn't be growing either.

- Source, Marc Faber via Seeking Alpha