Notes Marc Faber On Bloomberg Radio- May 24, 2010

• Seeing burning building in Thailand was a shock
• The entire region has become much more “China centric” and that has a concern for the long term
• Market became overbought in April
• Right now, U.S. bonds might be better option than sovereign debt
• Currently doing very little with capital because Faber believe we are in correction period and markets might decline 10-15%

Marc Faber: CNBC Interview May 7, 2010

Notes On Marc Faber’s September 2009 Interview With Bloomberg

• Global economy is recovering or at least stabilized
• Worried about policymakers who were largely responsible for crisis
• Doesn’t like current Bull Market, as it is not based on solid fundamentals
• You cannot build wealth on consumption and the lack of savings

Notes On Marc Faber’s September 9 2009 GoldSeek Radio Interview

• It would be wrong to assume we are in a strong recovery
• We reached bottom of valley in the time being (double dip recession?)
• Ben Bernanke is a total catastrophe
• Housing is an a range where investor could consider buying a house (with good financing)
• Deflation is out of the question at this stage

Marc Faber Lateline Business Notes

• You really have to be dumb to not make money when the government gives you money free at charge
• You should buy banks in the short run
• One stimulus package will lead to another
• A system collapse will occur in approximately 5 years
• Greenspan and Bernanke contained that crisis but also created the crisis

Notes On Marc Faber King World News Interview.

• In a year or two, we should see inflationary pressure emerge
• Expects deficit to increase by 2 trillion dollars next year in the U.S
• This crisis has failed to completely clean the system
• Wouldn’t  be surprise if 15-20% market correction occurs before big run up
• Market might go up due to money printing
• Believes the USD can rebound in the short term, is a “lousy” currency in the long run
• Markets are very overbought

• Estimates China has been growing at 0-3.5% during the current crisis
• On Japan, March 2009 is a secular low for Japan. Japan currently attracts Marc Faber “as a contrarian”
• Expects inflation to come due to huge fiscal deficits
• Doesn’t expect Federal Reserve rates anytime soon

Q: How high can the market go before, if I read your work correctly, America falls apart and takes everything down with it?

A: I’m not sure that the risk/reward now is particularly favorable. The inflationary school of thought says the Federal Reserve has no other option but to print money, and that will lift asset prices. The Standard & Poor’s 500 could get to 1,000 or 1,100 or depending on how much money they print, possibly even higher than that.

Q. You’ve warned that US risks Zimbabwe-style hyperinflation and then more recently said US inflation could reach 10% to 20% in five to ten years. Isn’t there a big gap between those outcomes?

A. We have the worst recession since the Second World War and actually the prices of necessities are still rising, including food and energy. So, one day within the next ten years, when the economy slowly recovers and when further dollar weakness occurs, inflationary pressures will increase. And once you have inflation increasing, it’s not easy to stop it unless you implement tight monetary conditions, which would imply very high real interest rates. And I don’t think that Mr. Bernanke or the US government have any intention whatsoever of having positive real interest rates. Combine easy monetary policies with large fiscal deficits, and the likelihood of much higher inflation is there. Once we go to 10% inflation, 20% becomes quite likely and once we go to 20%, we can easily go into hyperinflation.

Click here for the complete Marc Faber Moneyshow.com interview

I seldom become depressed, but when I consider that prosperity is created by “peace, easy taxes and a tolerable administration of justice” I really think that the U.S. and other Western governments are doing their very best to impoverish their countries.

The article has to parts to it and thus we have linked to both articles at the bottom of the page.

Keynes noted in the General Theory that, according to Gesell’s proposal, “currency notes (though it would clearly need to apply as well to some forms of at least bank-money) would only retain their value by being stamped each month, like an insurance card, with stamps purchased at a post office. The cost of the stamps could, of course, be fixed at any appropriate figure. According to my theory it should be roughly equal to the excess of the money-rate of interest (apart from the stamps) over the marginal efficiency of capital corresponding to a rate of new investment compatible with full employment.” And although Keynes found “the idea behind stamped money sound”, he nevertheless conceded that there would be difficulties in the implementation of this scheme:

But there are many difficulties which Gesell did not face. In particular, he was unaware that money was not unique in having a liquidity-premium attached to it but differed only in degree from many other articles, deriving its importance from having a greater liquidity-premium than any other article. Thus if currency notes were to be deprived of their liquidity-premium by the stamping system, a long series of substitutes would step into their shoes – bank-money, debts at call, foreign money, jewelry and the precious metals generally, and so forth…there have been times when it was the craving for the ownership of land, independently of its yield, which served to keep up the rate of interest; though under Gesell’s system this possibility would have been eliminated by land nationalization. (John Maynard Keyes, General Theory, London, 1936, Chapter 23)

Click here for part 1 of the Marc Faber Daily Reckoning Interview

Click here for part 2 of the Marc Faber Daily Reckoning Interview

Doubling Down

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