Tuesday, October 21, 2014
Everybody is now Bullish on the U.S. Dollar. so expect a powerful contra-move
HAI: The U.S. dollar has been rising and hit a four-year high earlier this month. Is the dollar going to continue to rally from here?
Marc Faber : The trade and current account deficit of the U.S. has been coming down because the balance in the energy trade has improved a lot. The U.S. is almost oil self-sufficient. It's become the largest crude oil producer in the world.
And even though the U.S. economy is not doing particularly well, it's in a slightly better position than the European economy. Thus, there are some reasons the dollar should be stronger.
That said, based on sentiment figures, everybody is now bullish on the U.S. dollar. Usually when you have this kind of consensus, what can happen is a powerful contra-move. In other words, the dollar could weaken for a while. That would be good for stocks and precious metals.
Additionally, if the Fed finds that the dollar is too strong, it can print money. But you just don't know what these academics will eventually decide to do. That's why I recommend investors have a diversified portfolio, because nobody knows what the world will look like five years from now.
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.
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.