Monday, April 30, 2018

Marc Faber: Countries Unwise to Let Antagonistic U.S. Hold Their Gold

Marc Faber: I think everybody's interested in the answers and everybody has a different view, but I have maintained that the January 26th high for the S&P up 2,872 was like a mirror image of the low on March 6th, 2009 when the S&P was at 666. At that time, everybody was bearish and leading strategy and I don't want to name who, but they were predicting for the S&P to fall to 400. And what happened is that, because sentiment was so negative, and the market was so oversold, the market turned around and actually on very poor earnings, started to go up. And now, we have, in January, a high, when everybody felt that the market would go higher and what then happened is that on good earnings, stocks didn't move up, but started to go down. So, I think we are in a situation where it is likely, it's not yet a hundred percent sure, in order to get a clearer picture, if a major bear market has started, we would have to make a low below the February low, but that hasn't happened yet. But looking at the market and the market action and the momentum and the number of stock that are actually making new lows, I'd say there is a fair probability that the market will disappoint point very badly.

Marc Faber: Well, I think there is a lot of disinformation, and usually when stocks go down, some fraud comes to the surface. And I expect it to happen, and I mean in a major way. Whether the fraud is related to some corporation, which I think is quite likely, or whether it's related to the fraud that is going on in the pension fund system, where pension funds are grossly underfunded, and, in the future, will either have to increase contributions or reduce distributions. I think these are items that could happen. Secondly, the public may start to lose faith in the system because of the political situation. I think the political situation in the U.S. is very bad, and If you read about what has been happening at the FBI, the CIA in Washington, you have to scratch your head whether that is all possible in a system that is supposedly functioning. It's like Watergate, but actually magnified. So, I think there is a possibility that investing public loses interest in financial assets. You talked about precious metals. I think there has been, just recently, a huge short position in the dollar. In other words, speculators, 15 months ago, they were heavily long in the dollar, and now they are very heavily short dollar. I think the dollar may rebound and as a result, precious metals may not move up right away. I think, eventually, they'll move up, but for the next, say, one or two months, I don't see how precious metals would rally significantly.

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.


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