Monday, April 7, 2014
US Stock Market to Decline by 20 per cent to 30 percent minimum.
There is a view that US interest rates may climb up in the next one year. What impact will this have on the global equity markets?
Marc Faber : It appeared US bond markets or interest rates had bottomed out in July 2012, before US Federal Reserve implemented the QE3 and QE4 programme. Since then the yield on 10-year treasury note has risen from 1.43 per cent to over 2.7 per cent, so, in other worlds, interest rates have already started going up.
My sense is in 10 years, interest rates based on long US bonds will be higher than they are today... Since we have a huge rally in the US stocks since October 2011, I suppose the next move in the US stock markets may be from higher levels - they will be down quite significantly, about 20 per cent to 30 per cent minimum.
And, at that stage, money will first move to US treasuries. So, in the near-term for next 6-9 months, if you buy US treasury notes between 2.7 per cent and 3.0 per cent, I think you will make money.
- in economictimes.indiatimes.com
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.
Posted by Nicole Bourbaki