Rising Rates will hit the Markets Hard

Its interesting that despite all the money printing bond yields didn't go down, they bottomed out on July 25th 2012 at 1.43 % of the 10 year. We are now 2.85 %.

We are up substantially. This hasnt had an impact on stocks yet. Infact it pushed money into the stock market out of the bond market.

But if the 10 year goes to 3 and half to 4 percent and the 30 year goes to close to 5 percent, the mortgage rates go 6 percent, that will hit the economy very hard.

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

Physical Gold is ALWAYS Good Insurance

Marc Faber is back and his New Year’s resolution did not include a dose of optimism when it comes to the economy. He was back on Fox Business for his first interview of 2014, and the themes remain the same. Faber even tosses in a mock congratulations towards outgoing Federal Reserve Chief Ben Bernanke on the job well done.

The interview, while clocking in at under four minutes, was wide ranging. But with Marc Faber, you know the publisher of the Gloom, Doom and Boom Report is going to get back to his central premise of owning physical gold as a form of insurance. Kicking off the interview was the old standby of the resurgent housing market.

Dagen McDowell wanted to know why people shouldn’t jump back into the housing market as a hedge against inflation. Maybe she saw the plunge in mortgage applications and got the word to start pumping people up again. Marc Faber pushed back, saying that all the Federal Reserve has done is rebubbled the housing market with the QE market. Hard to argue the point. Look at mortgage rates pricing people out of the market, and the number of cash-only sales.

Unless there has been a sudden boom of people unearthing caches of cash in their backyards, those are not your typical middle class buyers. Marc Faber maintains that home prices do not represent a great opportunity today, and in fact it forces people into renting at ever increasing rates.

His solution? Diversify. Does he think you can make all your money back on gold if you invested at the beginning of last year? Not necessarily, but that doesn’t mean you do not have some in your portfolio. Add in bonds, equities and real estate for a balanced portfolio. He does not buy into the hype surrounding the ever surging markets.

Actually, for a guy a that is normally thought of as a doomer, his advice sounds more sound than the mainstream who sits around and screams about the next momentum stock. And judging by the way gold is acting today, it is off to a better start this year than last.

- Source, Trade the News Room




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