Tuesday, June 30, 2015

Massive price drops coming ahead

Basically, we are six years into an economic recovery… there are huge distortions in the markets, where basically financial assets have been going up very substantially, and real wages for the typical household, or real household income, has been either flat or down. So it’s created huge market distortions, and I think eventually this will be resolved by a massive deflation in asset prices.

Wednesday, June 24, 2015

Cost of living rising while wages going lower

Wages in real terms are basically down. The cost of living has gone up substantially — partially also because of this brilliant idea of Obamacare. So all I’m saying is the household is suffering at the present time. That’s why retail sales are not picking up. And while the employment numbers look better, I say that jobs have been replaced by low-paying jobs. In the 70's we had high consumer price inflation, now we have extremely high asset price inflation.

Monday, June 22, 2015

Marc Faber on Asset Diversification [VIDEO]

Marc Faber on asset diversification and his past calls on markets.

Friday, June 19, 2015

Why Chinese economy could outperform USA

Some people are very bullish about the dollar, and think it will stay strong for the next five to ten years. That is not my view. If the dollar continues to strengthen, the U.S. Federal Reserve will initiate another round of quantitative easing, QE4 or QE5, to lower the value of the dollar.

China would probably not take up such policy. If the Chinese currency appreciates against the Japanese Yen or the Euro, I don’t think it’s a disaster for China. Because China buys resources, processes them and sells them to the world. With a strong currency, it will be cheaper to buy resources from other countries. Therefore, my inclination is to think that the Chinese will not print money.

Tuesday, June 16, 2015

Marc Faber prefers China to India stocks

A few prominent economists are critical about India’s growth rate and Rajan [India Central Banker], but they are bullish about the stock markets. 

I am not sure whether India will perform well, if you compare it to China A Shares.

Tuesday, June 9, 2015

Volatility, Affordability in USA, Europe [VIDEO]

Volatility has come back in the markets. The Yen has broken down and I think it will go lower.

[Watch the full interview below]

Monday, June 8, 2015

Emerging markets could face headwinds

Most forecasts show that emerging markets are likely to fare negatively. I have been telling my clients that the growth of emerging markets has slowed down, including in China, and will continue to do so. But I am still of the view that if China and India try to grow by 5 percent, it would be a lot better than trying to reach unachievable targets.

Thursday, June 4, 2015

Raghuram Rajan should get a medal

Most economists believe that Rajan [Governer of Reserve Bank of India] needs to cut rates, but I am not sure if that is what he should do. He may do it because he is under pressure. But he should concentrate on currency stability and a moderate monetary policy. I personally think he has done a great job. He has dared to criticise the US Federal Reserve... he should get a medal for that.

Wednesday, June 3, 2015

China stocks could now see a strong correction

We live in a world with excessive liquidity created by money printing of central banks. That liquidity flows into real estate, stocks, bonds, art and commodities from one place in the world to another.

Relative to the US, China’s stock market has become inexpensive. So, we had recently this huge bull market in Chinese stocks with colossal speculation. It doesn’t mean that the whole thing will collapse and make new lows. But after this burst of volume, we could easily see a significant correction.

I bought China Life Insurance at HK$21, and now it’s close to HK$40. It almost doubled in less than six months. I think it can easily drop 20% to 30%.

Monday, June 1, 2015

Marc Faber was refused Tourist visa in India

To achieve meaningful growth, India has to curtail the power of bureaucracy. 

I had applied for a visa to come to India in January this year, but was refused one. They said that because I am the chairman of the India Capital Fund, I should apply for a business visa. But I was coming here as a tourist.

India has the right intentions to simplify the ease of doing business. But if you look at the numbers, India is not high up there. [India was ranked 142 out of 189 countries by the World Bank Group in 2015.]