Marc Faber: China Puts Global Markets at Risk

Marc Faber, managing director of Marc Faber Limited and the author of the widely read monthly investment newsletter “Gloom, Boom & Doom” report, said weakness in China’s economy could spell big trouble global markets.

Faber said that if the Chinese economy grows at 3 or 4 percent—or even not at all, which he sees as a possibility—it will have a huge, negative affect on industrial commodities and the incomes of countries that produce them. In turn, he said, if countries such as Russia, Brazil or nations in Africa, Central Asia or the Middle East have less income, they’ll buy less from China, Western Europe and America, leading to very little earnings growth or an earnings contraction for those more prosperous economies.

China preferably would show trend line growth of 10 percent, as it has done for the past 20 years, Faber said. - in Yahoo Finance

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 : The Economic Slowdown Is More Pronounced Than Official Statistics Show

Marc Faber : All these indicators (electricity production to Macau gaming revenues and consumer spending habits to appliance and air-conditioning volumes) do not necessarily suggest that the Chinese economy is collapsing, but they reliably do suggest that the economic slowdown is more pronounced than official Chinese statistics would have you believe. In addition, these indicators do not imply that the Chinese stock market will decline further (but it could). Perhaps the weak performance since 2008 has already discounted much of the slowdown in economic growth. - in Market Shadows

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 recession in China

Marc Faber : ..recession in China could be a technical recession , if you go and slow down from a growth rate of say ten percent to a growth rate of three percent then there is a recession , also I do not believe in the growth rate that China publishes , because if you had adjusted nominal GDP for the true rate of inflation then real growth is of course much slower , you know I want to tell you something that disturbs me in all emerging economies and in many other developed economies , from my taste in front of luxury hotels there are far too many Ferraries and Maseraties and Bentleys and this is not a good sign , you should see depression when conditions are depressed . I see a boom everywhere except for the working class and except for the lower middle class , but among the well-to-do people the wealth that is floating around and the prices you pay for high end properties is incredible and I think that will come to an end and a lot of people will lose a lot of money and so I am ultra careful at the present time .  in Bloomberg TV 25 May 2011


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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 and Gold

”Now, just consider what the impact would be if China were to increase its gold holdings from presently less than 2 per cent of its $2.2 trillion reserves to 6 per cent or 10 per cent. Each 1 per cent increase in gold weighting would mean gold purchases of more than $20 billion, or nearly 600 tonnes,” - Marc Faber

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

There are some question marks about the data published by China : Marc Faber

Marc Faber : ....There are some question marks about the data published by China. My view would be that inflation in China is just about the same level as in India. In other words, it is much higher than what the government is publishing. So, real growth and inflation-adjusted growth is probably much lower than what they published. If you look at the bank lending rate and the deposit rate, we have a very negative real interest rate, in other worlds, interest rate adjusted for inflation. That leads inevitably to some kind of a bubble and every bubble bursts. Now, if you ask me when will the bubble burst, tomorrow or in three years, I do not know. I just say that it is a dangerous situation. Moreover, if you have very strong economic growth and the stock market does not perform well and China has been a really bad performer in 2010, then I would be a little bit careful about making large commitments to China. ....
in ET Now

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