Marc Faber News Blog Investments and Trading Ideas - A Tracking Blog About Dr. Gloom Boom & Doom Marc Faber , Daily Tracking of Dr. Marc Faber Investment Strategy , Market analysis , Outlook & Media appearances
Saturday, March 29, 2014
Marc Faber : A Financial Crisis doesn't happen accidentally
Marc Faber : ........Simply put, a financial crisis doesn't happen
accidentally, but follows after a prolonged period of excesses
(expansionary monetary policies and/or fiscal policies leading to
excessive credit growth and excessive speculation). The problem lies in
timing the onset of the crisis.
Usually, as was the case in Asia in the 1990s, macroeconomic
conditions deteriorate long before the onset of the crisis. However,
expansionary monetary policies and excessive debt growth can extend the
life of the business expansion for a very long time.
In the case of Asia, macroeconomic conditions began to deteriorate
in 1988 when Asian countries' trade and current account surpluses
turned down. They then went negative in 1990.
The economic expansion, however, continued — financed largely by
excessive foreign borrowings. As a result, by the late 1990s, dead
ahead of the 1997-98 crisis, the Asian bears were being totally
discredited by the bullish crowd and their views were largely ignored......- in daily reckoning
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.</