Tuesday, November 24, 2015

Marc Faber : I distinguish between Productive Credit & Unproductive Credit

TD: Marc I saw some recent commentary of yours indicating that there’s only so much debt-funded capital investment a person can make in their business before the debt becomes superfluous, unhelpful. Can you talk to that?

Marc Faber : Well, I distinguish between productive credit and unproductive credit. A productive credit is something like—let’s say we start a company. We buy the land. We build the factory. We acquire machinery and inventories and we hire people and then we produce either goods or services.
That credit is then serviced by the cash flow our businesses will generate and by the earnings over time, we will repay the loan.
An unproductive credit is a credit whereby you and I borrow money to go and gamble in Las Vegas, or buy a car. Then every month we have to pay off that loan. So that unproductive credit loan, in the initial stages of society, yes it stimulates economic growth above the trend line because future demand is advanced to today.
Otherwise, people would save for ten years and then buy a car. Now, they can buy the car today and pay it off over time. But unless the wages go up substantially, it’s a very unproductive credit.

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.

Dr Faber studied economics at the University of Zurich and, at the age of 24, obtained a PhD in economics. He publishes a widely read monthly investment newsletter The Gloom, Boom & Doom Report, which highlights unusual investment opportunities, and is the author of several books, including Tomorrow’s Gold – Asia’s Age of Discovery which was first published in 2002 and highlights future investment opportunities around the world. Tomorrow’s Gold was for several weeks on Amazon’s bestseller list and has been translated into Japanese, Korean, Thai and German. A regular speaker at various investment seminars, Dr Faber is well known for his contrarian investment approach. He is also associated with a variety of funds.