Sunday, April 10, 2011

Marc Faber on CNBC

Marc Faber is one of my favorite investment analysts out there. Here is a quick bio:

Dr Marc Faber was born in Zurich, Switzerland. He went to school in Geneva and Zurich and finished high school with the Matura. He studied Economics at the University of Zurich and, at the age of 24, obtained a PhD in Economics magna cum laude.

Since 1973, he has lived in Hong Kong. From 1978 to February 1990, he was the Managing Director of Drexel Burnham Lambert (HK) Ltd. In June 1990, he set up his own business, MARC FABER LIMITED which acts as an investment advisor and fund manager.

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. “ TOMORROW'S GOLD ” was for several weeks on Amazon's best seller list 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.

Faber is famous for correctly forecasting market rises and crashes. He is famous for telling his clients to get out of US stocks one week before the 1987 crash. He has made numerous other calls that have come to pass. Faber is extremely negative on US government debt and the US dollar. He also calls Bernanke "a money printer" on a regular basis.

Here is the latest interview he gave on CNBC on April 8, 2011.

What I love about Faber is that he not only talks about investments but also discusses economics in a simple manner that almost anyone can understand. In this interview he says that there is "inflation everywhere except at the federal reserve" lol.


  1. So whats the solution? Where to invest with some ability to withdraw the value as it is?needed to survive.

  2. anon @ 1:31

    This is a very difficult investing environment. Due to all the intervention and distortions, everyone is forced to speculate. For example, news just broke that Pimco, the worlds largest bond fund, is now short US treasuries! Others are betting that a deflationary scenario will break out again with the end of QE2 in June 2011 and are buying up treasuries. Personally, I'm holding off on metals purchases and preparing to add short positions on silver (ETF: SSIL) in the event of a commodity market sell off.

    The theory that is making the rounds at the present time is that commodities are in a crack up boom with all the liquidity and leverage that has been applied. I follow this simple rule: markets don't move in a straight line. They do move one way for a while, but never get caught up in the hysteria.

    The best place to invest in right now is yourself. Learn as much as you can, stay healthy, save as much as possible.

  3. What do you think about the commodities theory you described?

    In what type of investment should we put the money that we "save as much as possible"?

  4. @ 9:16

    Things are so fucked up right now wrt "investments" I prefer to call it "speculating' because at this point no one has any clue what is going to happen. I'm fortunate in the sense that I piled into gold and silver in late 2008 and in 2009. I haven't added any positions in the last 6 mos. Some pros are calling for a commodity market correction, similar to the crash of 08. In that crash, crude oil fell from $145 a barrel all the way down to $25. I personally avoid commodities like the plague due to their volatile moves. WRT to silver/gold, im long term bullish, short term bearish.

  5. I just finished Dmitry Orlov's "Reinventing Collapse". It's a must-read. Orlov draws parallels between the collapse of the Soviet Union and the U.S. today, which he says is on the verge of collapse, mostly due to Peak Oil.

    His analysis of the U.S. educational system is Spot On. My fear is that if there is a collapse, then with all the money printing in the context of a major economic contraction, then inflation runs wild. By the way, "collapse" is defined as "...the inability of production to meet the maintenance requirements of existing capital." If the suppy of energy (particulary oil) constricts, then the economy contracts.

  6. Orlov in his book "Reinventing Collapse" talks about defunct institutions that need to be discarded. A good example would be "Law School". Unemployed US law graduates need to wake up, cut their losses, and go on and learn a skill. In addition, they need to adapt psychologically to finding a place in a very different world. The economy is not going to "recover", you will....

  7. Guys,

    I'm preparing to BUY gold and silver; I'm preparing to buy as much as I can. Why? Because we have a repeat of the Carter years when gold reached approximately $850/ounce. Stagflation is back with a vengeance! That said, there are a couple of important differences.

    One is that we're in much WORSE economic shape than we were then; in terms of the deficit, debt as a % of GDP, and oversupply of money, we're much worse off than we were in the late 1970s of Carter's malaise. We have the lowest percentage of Americans working since 1983, the height of the early '80s recession. Secondly, there is no knight on a white horse, a la Ronald Reagan, to save the day this time. When you look at the likely Republican and Democratic candidates for office, none of them impress me. Thirdly, the Republican leadership in Congress is just too GUTLESS to do what's right WRT cutting the budget; after the CBO went through the recent budget deal, they'd cut a whopping $352 million dollars-wow! When we're running annual deficits in the 1.5 trillion dollar range, that's not going to get it done, folks! We need to be cutting hundreds of billions, minimum, to show the public, investors, and other nations that we're serious about getting our financial house in order. The fact that we cut such a pittance is scandalous!

    Having said all that, after adjusting for inflation, gold would have to reach about $2,700 an ounce or thereabouts to equal its 1970s era record of $850/ounce. I thought and felt that, if gold could get above $1,400 an once and stay there (and it has), then the sky is the limit. I'm betting on $3,000-$4,000 an ounce before it's all said and done; if nothing is done (and our politicians do NOT have the necessary political will to make the necessary cuts in spending), gold could soar higher than $4,000 an ounce. I figure that if I get in soon (and I will), I still have the chance to at least double my money before it's all said and done.

    That, and gold is the only reliable store of value we have. Real inflation (i.e. inflation that INCLUDES food and energy prices, which the oft quoted CPI does not) is at least %10-%10! That's a lot! That means that it'll take twice as much money to buy necessities a little more than seven years from now. To put it another way, your savings and investments will be worth little more than HALF of what they are now, because yields will NOT keep pace with that inflation rate.

    Unlike the 1970s, when I wasn't in position to take advantage of the economic turmoil, I am now. I'm going to emulate the rich, and I'm going to take advantage of this opportunity to make money. The rich find a way to make money no matter what the economy does. This is my chance, and I intend to make the most of it. I just wish that I'd gotten in when gold was only $1,000 an ounce...



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