How to Cure the Indian Rupee

The Indian government has created a huge problem, as it has under-reported the rate of increase in the cost-of-living or inflation. And by not measuring inflation properly, the government has kept interest rates negative in real terms. What the government can do or should do is, though it can be painful, it should increase rates substantially, stabilize the rupee. To increase rates would imply lot of pain in the economy temporarily, but in the long term, it would be desirable.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

I am not convinced that someone in the US really sits and thinks

I think that’s an issue. I am not convinced that someone in the US really sits and thinks, “What if we lose reserve currency status?” Clearly the US has a huge advantage in the sense that they can print money. Let’s say they go to war in Afghanistan, they actually do not pay for it, they just print the money. They go to war in Iraq, for now, they do not pay for it. The government prints money, creates large deficits, and the Fed buys this. It will have unintended consequences in the future, but for now it is OK. Other countries cannot do that. If you are a member of the EU, let’s say you are Greece or Spain, you cannot do that. If you wanted to do that you would have to leave the EU. In emerging economies if you print money, then the currency collapses and then you have import inflation. So the US has an advantage from the US dollar being a reserve currency. My view is that the dollar will stay as the reserve currency for a while, but I mentioned that in my view that eventually the financial system will collapse and we will move towards a new kind of arrangement with, most likely, the backing of some precious metals for currencies or with automatic stabilizers so that you have countries that are forced to essentially have a contraction if they have trade deficits and an expansion if they have trade surpluses to balance the trade surpluses and deficits. Today we have a huge imbalance in the world with the US having huge deficits externally and the rest of the world with surpluses. - in The Prospect Group

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Dr Faber not optimistic about India

I am not very optimistic about India on the macroeconomic front, and it has to do with the government policies. The economic policies of the government are by and large a disaster; the government could have done more. The government in India, through its incredible bureaucracy, has retarded economic growth in the last 20-30 years by at least 3% per annum in real terms. It's a miracle that the Indian economy has performed well, considering the quality of its government.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The US has a huge advantage in the sense that they can print money

I think that’s an issue. I am not convinced that someone in the US really sits and thinks, “What if we lose reserve currency status?” Clearly the US has a huge advantage in the sense that they can print money. Let’s say they go to war in Afghanistan, they actually do not pay for it, they just print the money. They go to war in Iraq, for now, they do not pay for it. The government prints money, creates large deficits, and the Fed buys this. It will have unintended consequences in the future, but for now it is OK. Other countries cannot do that. If you are a member of the EU, let’s say you are Greece or Spain, you cannot do that. If you wanted to do that you would have to leave the EU. In emerging economies if you print money, then the currency collapses and then you have import inflation. So the US has an advantage from the US dollar being a reserve currency. My view is that the dollar will stay as the reserve currency for a while, but I mentioned that in my view that eventually the financial system will collapse and we will move towards a new kind of arrangement with, most likely, the backing of some precious metals for currencies or with automatic stabilizers so that you have countries that are forced to essentially have a contraction if they have trade deficits and an expansion if they have trade surpluses to balance the trade surpluses and deficits. Today we have a huge imbalance in the world with the US having huge deficits externally and the rest of the world with surpluses. -in The Prospect Group



 Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Investors have Unrealistic expectations about returns from the Indian markets

Over the past few years, investors have built exaggerated, unrealistic expectations about returns from the Indian markets. If you look at India's macro economy, it has not done well compared to China. But on the corporate level, many Indian companies have done well and have rewarded shareholders. If you ask me, India as an investment destination, there are still opportunities. I have maintained my outlook that in 2013 the markets will not perform well because they had a strong rebound from the 2008 lows to hit the 2011 peak. After that, economic conditions began to disappoint investors, but it has not disappointed me because I expected it to worsen.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The Keynesian policies

One of the goals of so-called Keynesian policies would be to stabilize economic activity. In other words, you don’t have huge business cycle fluctuations and you have relative price stability. But please, tell me, where is economic stability nowadays, and where is price stability? Oil prices move up and down like crazy, home prices move up and down like crazy, and the stock market does the same. There’s far less stability than there ever was before, complementary of the Federal Reserve and essentially of the US Treasuries fiscal policies.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The FED Knows Nothing Else but to Print

I don’t pay much attention to what the Fed publishes. When you read their statements, they are completely confused and very vague. In other words, all is data-driven. If the stock market dropped ten, 20 percent, for sure there would be more QE programs. On the other hand, if the economy is very strong, they may taper off somewhat. You get the picture. The worse the situation is in the US, whether regarding asset markets or the economy, the more QE there will be. The Fed doesn't know anything else.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

I don’t think they will come to their senses

I don’t think they will come to their senses for the simple reason that insane people don’t realize that they are insane. They think they’re doing a great job. I talk to these people from time to time, and I know some of them. If you have a serious discussion with them, they lean towards the view, “Had we not implemented the QE programs, we would be in the greatest depression ever, so we’ve done a fantastic job.” The view is also, “If anything, we need to do more, not less.”

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Marc Faber : I think The FED is Completely Clueless

I think that the Fed is completely clueless. It is composed by a group of academics. Most of them, or I would say 95 percent, have never worked in a regular job in their lives. They all went to universities and then they went to the Fed or other financial institutions. They have no clue what makes an economy move.
Having printed this much money, and we are essentially in QE4 and QE unlimited, the results have been very dismal. I think the Fed is scratching their head at the present time and can’t believe that when their objective was actually to lower interest rates from July 25 of last year, the ten year Treasury note yield has gone up from roughly 1.4% to, a few days ago, 2.7%. We have an almost doubling of the interest rate because of their QE programs. I think that really makes them scratch their heads and wonder, “What did we do wrong? What do we need to do? Do we taper, or do we have to increase asset purchases?”
-in Sprott Money Ask the Expert


Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

I believe that the Doveish members of the Fed will print more money

I don’t think they will end QE. I rather think they will have to increase it because as you print money or as you purchase assets, from a central banking point of view, it loses its impact over time. In order to keep the impact going, you have to essentially increase it. I believe that the Doveish members of the Fed will print more money. Especially after the resignation of Mr. Bernanke early next year, when he will be replaced, there will be even more Doveish members.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Gold correction was deeper than expected

To tell you the truth, I was expecting gold to be in a correcting mode after 2011, but I didn’t expect the price to come down this much because had I expected it to happen and had I been sure about it happening, I probably would have sold my gold and bought it back more recently. Equally, I have an asset allocation and I don’t feel comfortable holding cash with banks. I don’t feel comfortable with any paper currencies, so at all times, I want to have some of my money in metals. Whether it will go lower or not, that I don’t know. Actually, my physical gold, I don’t even value. I know that I have it, and whether it goes up or not, it doesn’t change the fact of my decision to own it or to sell it. My decision is to at all times hold gold.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

I Dont know the end game

I don’t know what the end game will be, and whether we’ll still be alive or whether we’ll be in wars or in revolutions as the worst. That’s why I want to hold some physical gold. There’s no point to hold physical gold somewhere in the sky. I would hold some physical gold in my proximity. In other words, I own some in Thailand and some in Hong Kong. I still have too much in Europe, but over time, I will move it to Asia.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Every inflation leads to deflation

At some stage, every inflation leads to deflation in that particular sector, whether it’s housing, the NASDAQ, the NIKKEI, or whatever it is. I believe one day, paper money and financial assets will be destroyed, but I’m not saying tomorrow. Maybe it happens from a market capitalization that is much higher. Someone said to me, “The DOW Jones will go to 100,000.” Yeah, it’s possible. If you print money, everything is possible.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The FED Will Print More Money

I don’t think they will end QE. I rather think they will have to increase it because as you print money or as you purchase assets, from a central banking point of view, it loses its impact over time. In order to keep the impact going, you have to essentially increase it. I believe that the Doveish members of the Fed will print more money. Especially after the resignation of Mr. Bernanke early next year, when he will be replaced, there will be even more Doveish members. - Source, Sprott Money:

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Every Inflation leads to Deflation

At some stage, every inflation leads to deflation in that particular sector, whether it’s housing, the NASDAQ, the NIKKEI, or whatever it is. I believe one day, paper money and financial assets will be destroyed, but I’m not saying tomorrow. Maybe it happens from a market capitalization that is much higher. Someone said to me, “The DOW Jones will go to 100,000.” Yeah, it’s possible. If you print money, everything is possible.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Gold correction was deeper than expected

To tell you the truth, I was expecting gold to be in a correcting mode after 2011, but I didn’t expect the price to come down this much because had I expected it to happen and had I been sure about it happening, I probably would have sold my gold and bought it back more recently. Equally, I have an asset allocation and I don’t feel comfortable holding cash with banks. I don’t feel comfortable with any paper currencies, so at all times, I want to have some of my money in metals. Whether it will go lower or not, that I don’t know. Actually, my physical gold, I don’t even value. I know that I have it, and whether it goes up or not, it doesn’t change the fact of my decision to own it or to sell it. My decision is to at all times hold gold.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

I Dont know the end game

 I don’t know what the end game will be, and whether we’ll still be alive or whether we’ll be in wars or in revolutions as the worst. That’s why I want to hold some physical gold. There’s no point to hold physical gold somewhere in the sky. I would hold some physical gold in my proximity. In other words, I own some in Thailand and some in Hong Kong. I still have too much in Europe, but over time, I will move it to Asia.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

How gold can be confiscated ?

They won’t confiscate it and not pay anything. That would be, I guess, completely against the law. But say the price today, say around $1,200-something, then what they can do is they could essentially say, “Okay. We collect all the gold and pay $800.” More likely is that they would first try to depress it to $800 and then do it, then they’ll pay $800. Once they collect all the gold, like in 1933, they reevaluate to say, $10,000.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Money printing created financial wealth, impoverished the working class

For investors, Bernanke comes out very well as the man who saved the financial system. Why did we have a financial crisis in the first place? Because the central bankers, mostly the Fed in the US but also the Bank of England and incidentally, also in Canada and Australia, they paid no attention to excessive credit growth, and so you end up with an over-leveraged system and with boundless speculation in financial assets.

Then the crisis happens and they print money, and everybody applauds. Of course, they applaud the funds manager because the water level in the bathtub has increased by money printing. The asset values of portfolios go up and the fees fund managers earn also go up. So they’re all very happy.

But the man on the street, he’s a little bit less happy because his wage is going up less than the cost of living increases. In real terms, he’s losing out. That’s why, if you look at, say, corporate profits, they are extremely elevated in the United States as a percent of the economy.

On the other hand, wages and salaries as a percent of the economy are at record lows. So you have, essentially, through money printing, created financial wealth and impoverished the working class, like you and me.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

1987 Style Crash is Coming

"In 1987, we had a very powerful rally, but also earnings were no longer rising substantially, and the market became very overbought," Faber said on Thursday's "Futures Now." "The final rally into Aug. 25 occurred with a diminishing number of stocks hitting 52-week highs. In other words, the new-high list was contracting, and we have several breaks in different stocks."


Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Marc Faber predicts another "Black Monday" by the end of the year

Marc Faber again makes pessimistic forecasts, writes MarketWatch. , Known as Dr. Doom, author of The Gloom, Boom & Doom Report, warning investors to prepare for a drop in the markets of 20% or more by the end of 2013 Faber predicted market crash like the one seen in 1987

"In 1987 we had a significant increase in stock prices. Profits, however, did not grow at a stable rate. Markets were overvalued. There was a sharp decline, and on August 25 was the last day on which a large number of shares registered 52-week low. In other words, the number of shares that rose, curled up and saw a number of disruptions to trade with different shares, "said in an interview with CNBC Marc Faber

October 1987 was a period that investors can not so easily forget. YTD broader index S & P 500 added 20% to its value. Faber comparison with 1987, when the market grew by 30% at the same time of year.

On October 19, 1987, the day known as "Black Monday", S & P 500 index dropped sharply by 20%. This event remains forever in the history of Wall Street as the biggest loss suffered in exchange for one day. It was the end of five years-long period of appreciation of the shares.

Faber notes that in just two days this week, when the S & P 500 hit historic high of 1,709 points, there were 170 issues, which were trading at 52-week lows. This means that only a few companies moving market.

Back in February, and then a few more times, Marc Faber make such negative predictions, but none of them came true. Analysts wonder how much longer he will play the role of the false shepherd before something actually happen?

Analyst at Schaeffer's Investment Research Ryan Detrick did make quite a different conclusion. According to him, just as in 1987, and now the index Dow Jones Industrial Average has almost doubled. Today, however, market participants behave differently compared to the year in question.



Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

China vs The United States

 This is quickly becoming the favorite geopolitical parlour game. The Prospect Group put the question to Marc Faber and he was more than happy to oblige them with his thoughts on the subject.

Faber’s take on the two is the gap is narrowing but the US still remains the military superpower in the world. It is just quickly losing its perch as the number one market in the world. Which is to be expected according to Faber. China’s population warrants such a perch.

It would be odd for them not to be the leader in the mobile phone market of the refrigerator market if the country was fast growing.

What will cause the most tensions is the pivot towards Asia by the United States. With China flexing its military muscle, the US has been more willing to push out with its fleet and that has caused tensions to flare. Already, territorial disputes have erupted between Japan and China over an island chain.

Faber’s thought is that the US should let the countries resolve it on their own, but seeing as the US has strict alliances with countries such as Japan, that is unlikely. Plus, it is in the US national security interest to keep sea lanes open and controlled essentially by the US Navy.

Overall, the interview is an interesting listen and runs a pretty good clip. Clocks in at around 9 minutes so you’re not subjected to a lot of fluff. Plus this is Marc Faber. You know you’re going to get a steady diet of how he sees the world unfolding.

- Source, Trade the News



Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Has The FED Been Effective?

It is interesting that the money that has been printed essentially has not flown into the pockets of the workers or the middle class. We have precise statistics about who benefited from the money printing. Asset inflation has benefited a maximum of 3% or 4% of the population. It has benefited less than 1% meaningfully because if you look at real estate prices last year in the Hamptons, they were up 35% to record highs. Sandy Weill bought a condo in New York in 2007 for $43m at the peak and he sold it for $88m last August. Steve Cohen, a hedge fund manager, bought a condo for $24m on the East side and he is now putting it on the market for $115m. That price has gone up, the Mayfair economy or the luxury economy has gone up. But if you look at Las Vegas, or anywhere in the US that is not high end, it has recovered somewhat, but it is still way below the peak. But we also see this say in Asia. Recently I was in Bangkok and I have never seen such a big Ducati agent in the world. A Ducati is an expensive toy by Thai income standards. Driving around Thailand, you see a large number of Bentleys and Maseratis and Ferraris and BMWs and the works. These are expensive cars in this country because there is a 100% import duty on these cars. Whereby I think a lot of well to do people did not pay the import duty. - Source, The Prospect Group


Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The Stark Contrasts Of Mongolia's Economic Boom

Mongolia is in the middle of an economic boom. In the last ten years the GDP has more than doubled, and Marc Faber has said it could be the "Saudi Arabia of Asia" due to its tremendous mineral resources. But all this growth hasn't come without problems, namely the "resource curse" where economies become unstable because of over reliance on one sector. Political problems are emerging, and neighboring China's thirst for gold is leading to so-called "ninja miners" who work, dangerously and illegally, under the cover of darkness... - in The Business Insider
Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

A Financial collapse of dimensions

Like the aristocracy in Europe in the 18th Century, they didn’t give up just the power. They kept that power, same as the aristocracy in Russia in the 19th Century. They didn’t give up the power. Eventually, they were slaughtered. I believe what will eventually happen is that you have a financial collapse of dimensions so bankers can’t do anything.



Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

China vs The United States

This is quickly becoming the favourite geopolitical parlour game. The Prospect Group put the question to Marc Faber and he was more than happy to oblige them with his thoughts on the subject.

Faber’s take on the two is the gap is narrowing but the US still remains the military superpower in the world. It is just quickly losing its perch as the number one market in the world. Which is to be expected according to Faber. China’s population warrants such a perch.

It would be odd for them not to be the leader in the mobile phone market of the refrigerator market if the country was fast growing.

What will cause the most tensions is the pivot towards Asia by the United States. With China flexing its military muscle, the US has been more willing to push out with its fleet and that has caused tensions to flare. Already, territorial disputes have erupted between Japan and China over an island chain.

Faber’s thought is that the US should let the countries resolve it on their own, but seeing as the US has strict alliances with countries such as Japan, that is unlikely. Plus, it is in the US national security interest to keep sea lanes open and controlled essentially by the US Navy.

Overall, the interview is an interesting listen and runs a pretty good clip. Clocks in at around 9 minutes so you’re not subjected to a lot of fluff. Plus this is Marc Faber. You know you’re going to get a steady diet of how he sees the world unfolding.


Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

I dont trust any government

I don’t trust any government, period. The debts are too burdensome for the system, and then it leads to all kinds of symptoms. In other words, if you can’t pay your debts, you may print money, or you default, or you increase taxation, or you take things away from the well-to-do people, the evil people that make so much money. Well, the Federal Reserve enables them to make so much money. That is a key difference. They didn’t abuse the system; they just took advantage of a situation of money printing so their wealth increased more than the wealth of the middle class and the lower classes. In the Western world, they’ll go after these well-to-do people and people that own gold. In Asia, I’m not so sure this will happen because Asia is increasingly coming under the umbrella, our own umbrella of China. The Chinese government has actually encouraged people to accumulate gold, and themselves, they are accumulating gold.


Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Marc Faber predicts another "Black Monday" by the end of the year

 Marc Faber again makes pessimistic forecasts, writes MarketWatch. , Known as Dr. Doom, author of The Gloom, Boom & Doom Report, warning investors to prepare for a drop in the markets of 20% or more by the end of 2013 Faber predicted market crash like the one seen in 1987

"In 1987 we had a significant increase in stock prices. Profits, however, did not grow at a stable rate. Markets were overvalued. There was a sharp decline, and on August 25 was the last day on which a large number of shares registered 52-week low. In other words, the number of shares that rose, curled up and saw a number of disruptions to trade with different shares, "said in an interview with CNBC Marc Faber

October 1987 was a period that investors can not so easily forget. YTD broader index S & P 500 added 20% to its value. Faber comparison with 1987, when the market grew by 30% at the same time of year.

On October 19, 1987, the day known as "Black Monday", S & P 500 index dropped sharply by 20%. This event remains forever in the history of Wall Street as the biggest loss suffered in exchange for one day. It was the end of five years-long period of appreciation of the shares.

Faber notes that in just two days this week, when the S & P 500 hit historic high of 1,709 points, there were 170 issues, which were trading at 52-week lows. This means that only a few companies moving market.

Back in February, and then a few more times, Marc Faber make such negative predictions, but none of them came true. Analysts wonder how much longer he will play the role of the false shepherd before something actually happen?

Analyst at Schaeffer's Investment Research Ryan Detrick did make quite a different conclusion. According to him, just as in 1987, and now the index Dow Jones Industrial Average has almost doubled. Today, however, market participants behave differently compared to the year in question.






 Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Gold Price Manipulation by The FED

One of the reasons I would be inclined to believe in some manipulation would be, let’s say you’re a central bank, like the Fed. You don’t have the gold that you declared and you know that you have to buy it back at some point. Then, you may wish to manipulate the price down until you can cover your short position in gold at a reasonable cost. There will still be losses, but you can cover them at a reasonable cost. That is really the only reason I could see why a central bank would want to depress the price of gold.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

No Rush To Buy Emerging Markets Stocks

Investment Guru Marc Faber says that one should be selling emerging markets when the foreigners are heavy buyers and vice versa. "So investment banks turning negative on India is indeed a positive for country," he says, adding that US may outperform EMs.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Never Trust the Governments

Worldwide, you shouldn’t believe governments, period. I think you should believe market action. When markets go up, they give you a message, and when the markets go down, they give you a message. The only problem nowadays is that the messages from markets have been distorted by very significant government intervention into the free market, so you can’t rely on the information provided by the market participants any longer.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Marc Faber knows Eric Sprott

I’m aware of some people, including Eric Sprott, that believe that there is manipulation in the system. Where I tend to agree with him is that maybe central banks don’t have all the gold they claim they have, because something must be funny. The Germans have asked for the gold to be returned to Germany. Why would it take eight years to do that? There’s no reason. You can do it in three months.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Fed statements are vague

When you read their[Fed] statements, they[the Fed] are completely confused and very vague. In other words, all is data-driven. If the stock market dropped ten, 20 percent, for sure there would be more QE programs. On the other hand, if the economy is very strong, they may taper off somewhat. You get the picture. The worse the situation is in the US, whether regarding asset markets or the economy, the more QE there will be. The Fed doesn’t know anything else.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Read between lines of China statistics

If you read between the lines of the hard-core statistics in China, in my view, they don’t match with the public statistics about GDP growth. The economy is growing at say, maximum 4 percent per annum, not 7.5 percent or 7.7 or 7.6 percent.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The Rejection of Personal Responsibility leads to the Submission to the Authority of the States

Much of public policy these days seems designed to eliminate personal responsibility. The widespread acceptance by intellectuals of the belief that government should play a larger role in economic and private affairs; [is] the triumph … of the philosophy of the welfare state. Friedman opined that “today, governmental measures constitute the major impediments to economic growth in the United States … What we urgently need, for both economic stability and growth is a reduction of government intervention not an increase…"

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The Shadow Banking System

I have argued for many years that because of easy monetary policies, we had rapid credit growth in the Western world and also in other countries, whereby, after the Asian crisis, there was some de-leveraging in Asia. But in general, if you look at the world, say compared to the 1950s, 1960s, and even the 1970s, it is very clear that financial markets, official and less official, have grown disproportionately to the real economy. In other words, you have say, a global GDP of $60tr or whatever it is and you have financial markets that turn $60tr around in a week or less. I believe that one day this financial bubble will have to adjust on the downside. Either it will adjust on the downside because we have an inflationary burst or because we have a collapse of the system. We do not know exactly how the end game will be played. But in general, I cannot see how the derivatives market will continue to exist for the next 5,000 years. It has got to end one day and when it ends one day, either through war or through a financial collapse, it will be very painful. - Source, The Prospect Group:

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Fed statements are vague

When you read their[Fed] statements, they[the Fed] are completely confused and very vague. In other words, all is data-driven. If the stock market dropped ten, 20 percent, for sure there would be more QE programs. On the other hand, if the economy is very strong, they may taper off somewhat. You get the picture. The worse the situation is in the US, whether regarding asset markets or the economy, the more QE there will be. The Fed doesn’t know anything else.

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The Fed is clueless

I think that the Fed is completely clueless. It is composed by a group of academics. Most of them, or I would say 95 percent, have never worked in a regular job in their lives. They all went to universities and then they went to the Fed or other financial institutions. They have no clue what makes an economy move. Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Marc faber Thinks the fed is scratching their heads

Having printed this much money, and we are essentially in QE4 and QE unlimited, the results have been very dismal. I think the Fed is scratching their head at the present time and can’t believe that when their objective was actually to lower interest rates from July 25 of last year, the ten year Treasury note yield has gone up from roughly 1.4% to, a few days ago, 2.7%.

We have an almost doubling of the interest rate because of their QE programs. I think that really makes them scratch their heads and wonder, “What did we do wrong? What do we need to do? Do we taper, or do we have to increase asset purchases?”

 

 

 

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.