Gold : it makes sense to hold it for diversification

Well, first of all we had the gold bull market from 1999 to 2011 and we’ve been in depression since then. If I compare the credit growth, monetary growth and asset growth among central banks and the whole banking wealth accumulation that we had in the last fifteen years, I don’t think that gold is terribly expensive. I hold physical gold for the reason that one day I may not be able to remit money from one country to another. I don’t know when this final systemic collapse that I am foreseeing will occur but all I can say is that in monetary, inflationary times, when inflation is measured properly, in real terms: stocks usually don’t do particularly well but gold does. Nobody knows how the world will look like in five years’ time. I don’t think that gold investment is the best over the long run, because it doesn’t generate cash flows and doesn’t “grow”. But I think it makes sense to hold it for diversification. My business depends on financial markets, so I own stocks, bonds etc. Most of it is in “paper” and I want to be diversified out of paper into something that is not the liability of someone else. In the bank account, I depend on the bank. If I own corporate bonds, I depend on the corporation to pay me back. In the case of physical gold, I don’t depend on anyone to pay me back, but I do rely on well-established property rights. All governments now largely consist of bureaucrat socialists that are anti-wealth – and this also goes for the Swiss bureaucrats. If a proposal to collect all the gold from banks and Swiss owners of gold comes up, they are likely to follow through. I think that the collection of one’s gold by the bureaucrats is the largest risk we have today.

When you print money it benefits few people

When you print money it benefits few people. Those with assets such as property and stocks get richer, while the rest see their cost of living rise while their wages do not go up commensurately. I believe we are in the midst of the generation that for the first time in Europe, US and Japan will die poorer than their parents.

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 wants his investments diversified hoping to avoid huge losses

I have always argued that we don't know how the world will look in five years' time. Maybe the S&P is at 3,000, but it could also be at 1,500—we just don't know. 

There's a lot of manipulation through fiscal and monetary policies. So I want to be diversified. I want to own some gold, I want to own some shares. I own the most in Asia and some in Europe because I think in Europe they are still better value than in the US. And I own some bonds, cash and real estate. I hope when the collapse happens, I'm only going to lose 50 percent of my 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.

Rising Rates to hit Asset Prices

I think the beauty of today unlike 1999 until March 2000 when we had the tech bubble; at that time the majority of old economy stocks were cheap, commodities were in-expensive, today the good news is we have a bubble in everything everywhere and with very few exceptions. And eventually there will be a problem when these asset markets begin to perform poorly. The question is what will be the catalyst, it could be a rising interest rates not engineered by the Fed, because I think they will keep the interest rates at Zero on the Fed funds rate for a very long time. Bond markets, something very unusual, French government bonds were yielding last week 1.3 percent. Spanish, Italian bonds as much as US 10 year treasuries. We could essentially have a break in bond markets at some point. We also could have a strong dollar. A strong dollar has already happened in the last two months signifies that international liquidity is tightening and when that happens its usually not good for asset markets.




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

We have been in a Correction since 2011

 “Basically, we’ve been in a correction since 2011, some informed observers they think that the market is manipulated, I don’t know. But I have always argued, we don’t know how the world looks like in 5 years’ time, maybe the S&P is at 3000, but it could also be at 1500, we just don’t know. There’s a lot of manipulation through fiscal and monetary policies. Now, I want to be diversified, I want to own some gold, I want to own some shares, I own the most in Asia, and some in Europe because I think in Europe there’s still better value than in the US, and I own some bonds and cash and real estate. So, I hope that when the collapse happens, I’m only going to lose 50% of my 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.

I would rather buy Gold than Bitcoin

I know people who are very positive about Bitcoin, and I think its a currency that has a lot of future. But there will be competing bitcoins. And I personally when it comes to having some money into an asset or into cash that cannot be multiplied, I prefer a precious metal such as gold, silver, platinum, palladium. But of course you have to store it in the right place, not in the US. The best is probably a safe deposit box in Singapore or Hong Kong or in your safe in 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.

Rich have gotten richer

Credit expansion and money printing hasn't filtered much to ordinary people. It's boosted asset markets, real estate and stocks. So well-to-do-people have done very well. High-end restaurants are packed. Now, some money flows to people who are serving there, because well-to-do people give generous tips, but ordinary people have a much higher cost of living increase than 2 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.

Financial Markets should pay attention to Middle East Crisis

Today, we find ourselves with the same anti-free market interventionists who set up the Federal Reserve, the US Treasury and the US government. These same incompetent professors and academics also run foreign policy in America and then go and intervene in the affairs of Libya, Syria, Egypt, Iraq or Afghanistan. And as can be expected, they mess up just about everything. We have this Wolfowitz Doctrine that says they don’t want to tolerate any other major power such as the Soviet Union or China. So they want to contain these countries. When these countries become economically more and more important, the tensions, in my view, are only going to increase. I think it’s unlikely that the West will take any action. First of all, they don’t have the money. Second, a survey done by the US military stated that over 71% of their youth are unqualified to join the military for a number of reasons, including educational, behavioral and health conditions. So, if 71% of American youth are not qualified, it means the US doesn’t have the labor force to actually implement its foreign policies. And so they resort to private contracting companies that create more problems than solutions. I’m very negative about the Middle East. I think the whole region will blow up. Eventually Iraq will be divided into three different countries: the Kurds, the Sunni in the North and the Shiites in the South. All I can say is that, in general, financial markets are not paying sufficient attention to this.

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

In The End we will have a Collapse in Markets

Eventually we’ll have a collapse or deflationary bust in asset markets. That’s inevitable. Printing money can postpone such a collapse but eventually the bust will occur. Every inflation, whether consumer price inflation or asset inflation, eventually comes to an end.



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

Bitcoin vs Gold

I know people who are very positive about Bitcoin, and I think its a currency that has a lot of future. But there will be competing bitcoins.
And I personally when it comes to having some money into an asset or into cash that cannot be multiplied, I prefer a precious metal such as gold, silver, platinum, palladium.
But of course you have to store it in the right place, not in the US. The best is probably a safe deposit box in Singapore or Hong Kong or in your safe in 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.

A Bull Market frequently goes on for longer than expected

The market hasn't had more than 11 percent correction since October 2011. A bull market frequently goes on for longer than expected. The current bull market is very old, we have been going up since March 2009. This bull market is more than Five years old. The one thing I can say is we are in an ageing bull market, and the economic recovery has lasted longer than the typical recovery or expansion phase over the last 100 years. Now can the bull market go on for a while because of additional money printing...possible... but in my view for asset prices to go up, the Federal Reserve actually has to increase the asset purchases and not taper and that is quite difficult politically to do. - See more at: http://www.marcfabersblog.com/#sthash.kKEuDGN0.dpuf





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

India stocks doing reasonably well

I just looked at the statistics of the revenue per shares of companies and in India we have a situation where revenue per shares has been rising significantly more than in other emerging economies in the last few years.
Now at the same time we have in India, pressure on corporate margins, profit margins, and if there is an environment where profit margins can improve, corporate profits could rebound very strongly. And so its conceivable that the stock markets in India, which have been one the best performing markets in the world year to date, that this performance continues for a while.


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

Markets are Mispriced

We've had relatively low volatility in bonds and in equities and in currencies and I think in the next 6 to 12 months will be characterized by far more volatility.
What we had since essentially early April was the Euro strength and since then the Euro has been weakening and then until July we had Yen strength and now its weakening. And bond prices have continued to go up. Its interesting that at the present time, Spanish government 10 year bonds yield less than US treasury. Spanish bond yield 2.25 percent and US 10 year note yields 2.4 percent. I believe all the markets are grossly mis-priced because some people say intervention, I say central banks have manipulated interest rates to artificially low levels and so you have this complacency in the market place.
We are more than 5 years in the bull market. Can the market go up another 10 percent or so, yes its possible. Since August 7th, up to today the S&P is up roughly 100 points, at this rate(in one month), the S&P in the next 12 months will be up 1200 points. I dont think its very likely. And if there is a strong blow up phase, it will be followed by an equal sharp downturn. - in Bloomberg interview




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 Global Economy is Weakening

When I travel and look around economies, I don’t see the global economy strengthening, I see it weakening. In Asia, we don’t have a recession per se, it is just economic growth has slowed down meaningfully or there is no growth at all .
We are now in the fifth year of an economic recovery which began in June 2009 in the U.S. and we’re more than in the fifth year of a bull market that began on March 6, 2009. This is a very mature economic recovery...it would seem to me that the monetary policies that central banks pursue are negative for economic growth, but they are positive for asset price increases. As a result of asset price increases, lots of goods have become unaffordable for the typical household.



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

Society in general has turned into an Entitlement Society

Generally, in small societies, democracy is more successful than in large societies.
In countries like India or the United States, the federal government has become so large that they take decisions that are not necessarily in the interest of the individual. This is different from Switzerland, where we have municipalities, “Gemeinden”, and states, “Cantons”, with a lot of decentralized power, which I find very desirable. Basically, over the last, I would say, 100 years, the Keynesians and the Neo-Keynesians thereafter propagated their view that the larger the government and the more the interventions the better a society becomes. They have managed to discredit the Austrian School of Economics. As a result, society in general has turned into an entitlement society where we have an insurance policy for everything and the government is expected to pay the bills. And so, the freedom of the individual is undermined. But with
freedom comes responsibility, personal responsibility. This has been pushed aside and people don’t realize that they can’t be free if they don’t take on responsibility. Adam Smith said the government should be in charge of a well-structured legal system, low taxes and defense and nothing else! Instead, we have more and more socialism and state planning, which diminishes people’s freedom. I believe we need to have a huge change in society to make people understand that if you want to have freedom you also have to take on personal responsibility.



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