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.
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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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Dr. Marc Faber Tomorrow's Gold

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.