Thursday, October 31, 2013

Words of wisdom - Jealousy, Envy

According to Lucy Kellaway
"There is benign envy, which motivates you to be better than the person you envy. And there is malicious envy that makes you want to take them outside and do something unspeakable to them."
There are several reasons why I am bringing up the envy and jealousy issues here:

First of all, if you are strongly inclined to these emotions you will suffer all your life working in organizations, which are a breeding ground for jealousy and envy. You will lead a much happier life working on your own or managing your own business.

Secondly, what is frequently overlooked is that envy also arises because of a sense of fairness, justice, and impropriety. In a society, envy also comes up if some people benefit greatly from some economic policies, but at the cost and the detriment of the majority.

Therefore, once again, I am touching on increasing wealth and income inequality and its impact on the economy and on society.

As Will Durant explained,

“In progressive societies the concentration [of wealth] may reach a point where the strength of number in many poor rivals the strength of ability in the few rich; then the unstable equilibrium generates a critical situation, which history has diversely met by legislation redistributing wealth or by revolution distributing poverty”

Wednesday, October 30, 2013

Government does not care about the people

"We have today governments in Brussels and also in Germany and in Switzerland, basically everywhere, where they do not represent the will of the people. In other words they don’t care about the people. They care about themselves."  

Read more at:

Tuesday, October 29, 2013

We need monetary stability, not instability by governments

Recently, there was a professor in Germany who argued that the problem are the well-to-do people and that they should be taxed, very heavily penalized and that part of their assets should be taken away. I don’t think that the well-to-do people per se are the problem. I think the money trading by central banks is the problem and the expected debt growth, credit growth by governments and also on the household sector level and the unfunded liability. So, essentially, one of the solutions to the problem – and there is not going to be a solution that is not very painful – there will be pain and people will have to cut back on their consumption and also review their future benefits from pension funds and from social security, health care and so forth and so on.

We've lived beyond our means in most countries and to solve that problem is not going to be without significant pain. But effecting the right direction would be to take the depression away from central bankers to increase and cut the money supply and to intervene into the free market essentially with monetary measures. 

I think that would be the first step in the right direction because if you look at what has happened in the economy, one of the safest goals of central banks is price stability. Well where has there been price stability over the last 15 years? 

Monday, October 28, 2013

A good time to buy Gold

Gold is a commodity that drives sentiments to the extreme and personally I think Marc Faber has been spot on specially over the last decade in buying Gold. He recently said in an interview about why he thinks gold is still cheap.

"Well, the problem with zero interest rate policies and money printing is that it distorts all evaluation models, it’s very difficult to value something. I could say, okay, this house in Mayfair or on Park Avenue or Madison Avenue in New York is expensive if I compare it to, say a quantity of money that’s been floating around the world, but maybe it isn’t. Is a Warhol painting expensive or cheap? Well it’s up, say 12 times over the last ten years, so it’s gone up a lot but the quantity of money has also gone up a lot and the number of billionaires around the world has also expanded and so forth and so on. So I can say, maybe gold relative to a Warhol painting or relative to the U.S. stock market is not that expensive or relative to Hampton property. Obviously those are up from 250 Dollars in 1999 to now over 1.300, so, expensive or cheap is a very difficult concept in the present environment."

Via -

Thursday, October 24, 2013

Chinese tourists in Thailand up 100 percent

We all know China is a growing economy and market for almost everything. Well this now also includes the tourism export industry as the Chinese people are now travelling to international destinations more frequently due to ease of getting a passport and their own increasing wealth. Here Dr Marc Faber talks about what he observed while he was in Macao and other parts of Asia.

"The Chinese tourist group is the largest group in the world. 90 million Chinese travel overseas every year. They first go to Macao to casinos. Gradually they are moving to other countries in South East Asia, by the way also US and Europe. For instance in Thailand arrivals from China was up 90 percent. In some months they were up 100 percent.


Wednesday, October 23, 2013

Weakening consumer confidence

Marc Faber clearly is still feeling rather bearish on the stock markets and specially on the US stock market. He comments on the consumer confidence.

"With what is going on consumer confidence is going to worsen further. Any common sense man, he looks at congress sees a dysfunctional government, is not going to rush and buy out goods. Secondly, according to the Feds own statistics the money that was printed by the Fed has gone to 5 percent of the population. Maximum 50 percent of the population household wealth is still down more than 40 percent from 2007 peak."

Tuesday, October 22, 2013

Faber Interview: Inflation leads to deflation

Earnings in 5 years to moderate

"We are coming into the earnings season. The earnings are likely to dissapoint. The markets are not cheap according to many valuations. The returns over the next 5 to 10 years will be very moderate."

source: Faber Blog

Monday, October 21, 2013

Apple stock could crash

"I'm not saying it will go bust," but "it could go bust eventually" - source article

Thursday, October 17, 2013

Wealthy people benefited more from money printing

In an ideal world money printing from the Fed would flow evenly into all sectors. The fed probably do believe that their money printing program is working just fine. Others like Marc Faber are skeptical.

"The problem is that the money doesn't flow evenly into the system but it flows into some sectors at different times and it creates booms in some sectors of the economy."

Monday, October 14, 2013

Financial system may not heal

Most of us people are optimists and we would like to believe in a better world and a better future for all. However sometimes we have to be realistic. Marc Faber gives a wake up call to us dreamers. He said in a recent interview.

"Well I think we have unprecedented government interventions with fiscal and monetary policies. For me it’s not really a question, it won’t work but miracles do happen, and maybe based on the bailouts and huge monetary inflation that the central bankers have created, maybe it is possible that the financial system heals and that the global economy resumes a, say, trend line growth such that we had in the 90’s and the early parts in 2000 and 2005. But I very much doubt that."

Source Article

Friday, October 11, 2013

Fed will lose control of stock market

The US Federal reserve along with other central banks pumping money as fast as they can is in itself a dangerous experiment. There is no such historical precedent. We can only pray and hope it ends well for all of us and not lead to the breakdown of the financial world. Marc Faber thinks the markets are extended and the Fed is showing signs of losing control.

"The markets are overbought and the fed has already lost control of the bond market. The question is when will it lose control of the stock market."

Marc Faber is an world famous contrarian investor known for his accurate predictions of the stock markets around the world.

Wednesday, October 9, 2013

Monetary inflation creates a huge pool of liquidity

For the last four years, the US Fed Fund Rate has been essentially zero, and we have a massive money-printing, monetary inflation that creates a huge pool of liquidity.

Basically, what we have seen in the world are the consequences of the crisis the US and world faced in 2008-09 caused by excessive debts brought about by artificially low interest rates.

Marc Faber is an world famous contrarian investor known for his accurate predictions of the stock markets around the world.

Tuesday, October 8, 2013

Responsible people should own gold

Gold has been a controversial relic for many investors. Some love them and others hate them. Mr Faber is on the side who love them although I dont think he is a Gold bug. He is simply a realist.

"I always buy gold and I own gold, I dont even value it. I regard it as an insurance policy. I think responsible citizens should own gold period. Eventually it Gold prices will go up."

Marc Faber is an world famous contrarian investor known for his accurate predictions of the stock markets around the world.

Monday, October 7, 2013

Money Printing end game is a total collapse

The end game is a total collapse but from a higher diving board. The fed will continue to print. If the stock market goes down ten percent they will print even more. They don't know what else to do. They boxed themselves in a corner where they are kind of desperate.

Marc Faber is an world famous contrarian investor known for his accurate predictions of the stock markets around the world.

Sunday, October 6, 2013

Friday, October 4, 2013

Few american's own shares

The majority of people do not own stocks. Only eleven percent of Americans own directly shares.

Thursday, October 3, 2013

Fed has lost control of interest rate direction

The [US Federal Reserve's] goal is to lower long-term interest rates via the massive asset-purchase programmes called quantitative easing [QE], but it seems it has lost control of the interest-rate direction.

Wednesday, October 2, 2013

Marc Faber video interview with Thai TV

We are in QE Unlimited

We are in QE unlimited. The people at the fed are professors, academics, they never worked in a single life of business of ordinary people. They don't understand that if you print money, it benefits basically a handful of people, not even 5 percent of the population, 3 percent of the population. 

Tuesday, October 1, 2013

Possibly invest in emerging markets

Many emerging markets are down 50 percent from their highs post recovery 2009. Where do you invest ? The case can be made to should one want to invest in equities he will choose the depressed markets.