Marc Faber: When Negative Rates End, It Will Be Total and Complete Destruction
Marc Faber has been a student of markets since 1970, and has learned that the stock market is largely distorted and manipulated. The markets are no longer trading on sound fundamentals in a system where the quantity of money is relatively limited. The liquidity bubble created by central banks, paper money, interest rates, and quantitative easing are examples of this manipulation.
He says we are essentially trading in a virtual reality fantasy land that is driven by the insane money-printing professors at central banks. In looking at the trade deficit, and the current account deficit, Marc’s sense is that the US dollar will not continue be a strong currency. The trade balance of goods has been deteriorating continuously.
The US is not very competitive, and many services including accounting, auditing, and software can be provided at a much cheaper cost than in the US. The reasons the market in the US has gone up is due to money printing and stock buy backs, but there is no revenue growth, and no earnings growth.
He recommends staying out of US equities in general, although he feels the gold, mining, coal, and fertilizer sectors in the US are inexpensive. Comparing the price of gold, platinum and silver to all this increased paper money created out of thin air by central banks, precious metals seem inexpensive. Following another correction he thinks precious metals will have further upward moves.
Talking points from this week’s interview:
• Fed fund interest rates have been close to 0% for 8 years
• We’re close to record low interest rates in US treasuries
• Europe has over 12 Trillion in negative yield bonds
• The Clintons are a corrupt and devious couple
• There is a colossal credit bubble in China
Dr Faber publishes a widely read monthly investment newsletter “The Gloom Boom & Doom Report” report which highlights unusual investment opportunities, and is the author of several books including “ Tomorrow’s Gold – Asia’s Age of Discovery” which was first published in 2002 and highlights future investment opportunities around the world. It was on Amazon’s best seller list for several weeks and is being translated into Japanese, Chinese, Korean, Thai and German. Dr. Faber is also a regular contributor to several leading financial publications around the world. A regular speaker at various investment seminars, Dr Faber is well known for his “contrarian” investment approach. He is also associated with a variety of funds and is a member of the Board of Directors of numerous companies.