Sunday, July 24, 2011

Marc Faber : at least in China they use credit to make capital investments not to to buy McDonalds hamburgers

Marc Faber : We have a credit bubble (in China ) . Credit has been growing at an annual rate of 30% and they had a huge stimulus package  . But if you start with rapid credit growth with a debt-to-GDP of 100% is a different story than if you start from a debt-to-GDP of 600% if you include Fannie Mae and Freddie Mac. So yes in China they have excesses, they have mal-investments and oversupply in some industries. But at least in China with credit they do something. They build railroads and roads and bridges and infrastructure and education and so on. In the United States credit is mostly used for consumption and that's a huge difference. Whether you use credit to make capital investments or you use it to buy McDonalds hamburgers or SUVs 'made in China !!!  - in Yahoo Finance Tech Ticker
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Dr. Marc Faber author of the Gloom, Boom and Doom report is a world class Investor, Doctor Faber 's typically controversial and contrarian views have earned him the label of Dr. Doom. Doctor Doom also trades currencies and commodity futures like Gold Natural Gas and Crude Oil.Even his harshest critics must admit that he's been unerringly correct in his market forecasts over the past three decades . Marc Faber is a Swiss investor.He 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. Between 1970 and 1978, Dr Faber worked for White Weld & Company Limited in New York, Zurich and Hong Kong. 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, which acts as an investment advisor and fund manager. Faber is publisher of the Gloom Boom & Doom Report newsletter and is the director of Marc Faber Ltd which acts as an investment advisor and fund manager.