Marc Faber on Bloomberg
Marc Faber was interviewed on Bloomberg yesterday. He had some fantastic thoughts on markets and the global economy. I strongly suggest that you watch the video and/or view the summary.
- Markets have had a huge move from the July 2010 lows. A shake-out in commodities & equities is likely.
- The global economy is slowing down & earnings estimates are excessively optimistic.
- QE3, 4, 5 etc. will come after a 20% decline in US equities (see video below).
- The inflation trade is stretched.
- The S&P 500 will probably only collapse in real terms.
- The Chinese must be stirred by the recent Allied invasion of Libya. They must view it as a move against China’s expansion in Africa.
- Once the Chinese bubble collapses, they will be the world champions in money printing.
- Treasuries & the dollar could be a good place to be for the next 3 months.
- US real estate is cheap.
- The mania toward social media companies is probably another bubble. People may eventually get tired of facebook etc.
- Emerging market economies are extremely extended – there are too many Ferraris outside luxury hotels in EM countries.
- The Fiscal position of the US is dire.
For a nice explanation of the Fed’s obsession with the S&P 500, see the following interview with David Einhorn (start the video at around 1 minute).
Recommended: Charting the Federal Reserve's Assets - 1915 to 2012