Saturday, March 16, 2013

Marc Faber : We Have Stock Market Bond Market and Government Debt Bubbles Developing

Marc Faber in MacAlvany recent interview : We Have Stock Market Bond Market and Government Debt Bubbles Developing

Marc Faber: The big change is that four years ago on March 6, 2009 the S&P was at 666, and now we are at around 1550, so we had a huge upward move in equities and many equity markets around the world have gone up much more than the S&P 500. Markets like the Philippines, Indonesia, and Thailand, are up 4-5 times from their lows.
What has also changed is sentiment. Whereas as investors felt that the world was coming apart in 2009, now they are very optimistic. So whereas I was rather positive to invest in equities in 2009, and I still believe that the lows in 2009 were long-term lows, in other words we are not going to go below these lows, but I think that the valuations are no longer compelling.
Whereas the 2009 stocks were very oversold, sentiment was very negative, and everything looked horrible, now, in my view things still look horrible, but in the U.S. they look relatively okay compared to the rest of the world. I have my reservations, but as you know, many people talk about the U.S. energy self-sufficiency, and that low natural gas prices will make the U.S. more competitive.
As I said, I have reservations, but in general, I think we have gone from a sentiment that was doom and gloom, to now, essentially euphoria. I am not implying that the market will collapse tomorrow, but we are moving into a very speculative environment, where essentially, markets are held up, or pushed up, by money printing, and this money printing has, for the last 20 years, numerous consequences, including the NASDAQ bubble.
But the NASDAQ bubble burst. Then we had the housing bubble, and the housing bubble burst. Then in 2007-2008 we built the commodities bubble, and it also burst. And now we have again a stock market bubble, and a bond market bubble and a bubble in government debt and I think this will all end badly.


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