Thursday, February 2, 2017
Marc Faber on Mexican Peso, Volatility, Travel ban
I wanna talk about Mexico because I'm 0:02 really interesting comments over the 0:03 weekend from carlos slim the being there 0:05 thinking they could be done with a magic 0:07 moment now for mexico which is 0:09 controlling call birthday was saying 0:11 well it's so negative of the drop them 0:13 and pay so when all the reaction for the 0:15 protection of him but he said you seen 0:17 this 0:17 are you the first time mexicans are 0:19 united together in the type of challenge 0:21 they face against the state do you think 0:23 there is a way for Mexico to actually 0:26 withstand the onslaught from Donald 0:28 Trump protectionism is there a way for 0:30 investors to do well out of Mexico or 0:32 differences even in the country that 0:34 problem is that a quickie say that are 0:38 in the ETF or in the Mexican fund these 0:42 are good companies you know like poker 0:46 for friends are and divorce but their 0:48 valuation is relatively high about 25 0:51 times earnings but i believe the Mexican 0:54 people at this level is very undervalued 0:58 and can rebound strongly how much 1:01 undervalue believe that properties in 1:03 Mexico now our bargain so how much 1:07 undervalued for mexican peso just for 1:08 the record that ten percent weight 1:10 percent when everyone how much 1:12 undervalued what the undervalued and 1:14 evaluating while arguing scatter it 1:16 could the rebound very quickly by ten 1:18 percent bring the currency markets ten 1:22 percent is quite a big move but I think 1:25 that's quite likely equally you see for 1:28 instance the singapore dollar have been 1:31 weak against the US dollar i think that 1:34 this level if I had a five-year you i 1:39 would probably be long 1:40 singapore access not grow the economy 1:44 the world the way it was 20 30 years ago 1:47 but it's a very safe stable and 1:52 prosperous country so i think that 1:56 Singapore assets are quite reasonably 1:58 priced and as i said in Mexico 2:00 properties are probably a bargain i live 2:02 in ages so i'm not going to buy your 2:04 property in Mexico but the valleys stay 2:06 in the US i will probably buying 2:08 properties in Mexico good things coming 2:11 to and I feel like your point taking 2:12 point where money goes it 2:13 you're safe harbor now and be with no 2:15 longer that safe harbors and they noted 2:18 a harbor anyway but i would say i think 2:24 people will have second thoughts about 2:26 how owning accepting the US or the 2:28 Europeans number to Asia is relatively 2:33 safe now 2:35 property rights are maybe not as well 2:37 established that they here in Britain 2:40 especially when it comes to properties 2:43 but in some cases they are very good 2:45 like in Hong Kong or Singapore and I 2:49 think that more and more people around 2:51 the world will look at Asia because we 2:53 have a lot of the problems that Europe 2:56 has are absent in asian and we have 3:00 relatively young societies that have 3:04 different priorities than being 3:07 politically correct 3:10 all we're going to continue to get very 3:11 very quiet market or I should result in 3:13 to pick up 3:14 no I think that the volatility will pick 3:16 up massively and as i said i would draw 3:20 the NGO luong foreign markets than the 3:22 US and you know one thing that people 3:25 hardly talk about this japan japan is 3:28 relatively depressed in terms of 3:31 valuations japanese companies have 3:34 diminished the leverage their very well 3:37 run in some cases there are at 3:40 reasonable valuations and Japan at the 3:44 country does not have many of the 3:47 problems that we have in the Western 3:48 world we don't normally have seen 3:50 demographic issues with it they have a 3:53 shrinking population but because the 3:57 population is shrinking 3:59 there's no growth ok that we agree at 4:03 the same time they have a very high 4:05 quality population like South Korea and 4:09 when you have a shrinking population is 4:13 GDP stays at zero or at one of the gdp 4:19 per capita goes up like during the time 4:23 in the 14th century of the Black Death 4:26 gdp per capita went up to love because 4:29 thirty percent of the people were no 4:31 longer there 4:32 yeah yeah so you understand that their 4:34 closet these are negative aspects Japan 4:37 doesn't have an immigration problem i 4:38 can't tell you what about the volatility 4:41 we saw in the end as well as acting 4:43 investment all right way back up to WM 4:46 115 as well but the the N Sync 4:48 incredible move over the last 12 months 4:51 absolutely but nobody knows for sure you 4:54 know that common view is basically the 4:57 end will drop 262 the US dollar that 5:00 would not be my view I think the end 5:03 will stay relatively strong will go very 5:06 strong against the US dollar stay around 5:09 this level 5:10 who knows but I don't seed weakening 5:12 very substantially just quickly given 5:15 all your expertise on training 5:16 emerging-market currencies would you see 5:18 clear some of the smaller one for 5:19 instance around Taiwan given from the 5:21 protection of stance 5:22 just trade some of the bigger am 5:24 currently exists is they're fearing 5:26 around us 5:27 yes but that you see I believe this 5:31 protection is measures of the US will 5:35 actually encourage China and other 5:39 countries to work to trade more with 5:42 each other state 5:43 the Chinese are only eighteen percent of 5:47 the exports go to the US exports to 5:50 emerging markets are much larger or to 5:54 the exports imports from Southeast Asia 5:58 are larger than to the US and so if 6:01 there is really a trade resection with 6:05 respect to the u.s. in my view it's the 6:08 u.s. that will lose out not China 6:12 as we going to 2017 the consensus of 6:17 these interest rates will go up there 6:21 Trump inflation trade you know that you 6:23 want to be in assets and avoid bonds and 6:26 cash and you want to be long the US 6:30 dollar and socks in the US and 6:33 eventually overweight the u.s. 6:36 overweight the US dollar and overweight 6:39 AZ care stops but i think and it's not 6:45 about the travel ban but the travel ban 6:48 add a different dimension about which 6:50 I'll talk about in a second but 6:52 protectionism I guarantee you is not 6:56 going to be very good for the u.s. that 6:59 for sure not and the travel ban and 7:03 protectionism what does he do the us 7:06 basically have a trade and current 7:10 account deficit that is not the issue 7:12 today but the accumulated deficit are 7:17 and issuing the sense that the world has 7:20 a huge supply of dollars floating around 7:24 sometimes this is a global liquidity get 7:27 wiser 7:28 sometimes it expands that in general the 7:32 US dollar position and assets in the 7:36 u.s. depend on one factor is confident 7:39 of foreigners investing in the US and 7:42 what do you think that he do if I'm at 7:45 the european or chinese IC suddenly a 7:48 travel ban on lifetime if I'm a China 7:50 investors well especially given the fact 7:53 that the lower implants in the 7:54 allocation to us treasuries previously 7:56 as well yet but not for damage to saying 7:59 the private citizens 8:00 yeah they see a travel ban on Muslims 8:02 anyone with any brains people think well 8:06 what about these tomorrow there is a 8:08 travel ban on Chinese that i own a 8:10 property in the US or I own access in 8:14 the US and that I can't access my assets 8:17 in the u.s. so I think that actually the 8:20 travel ban psychologically will have a 8:23 very negative impact in the long 8:25 Iran the US dollar and us after taking 8:27 out like that again then cover the 8:29 modern religious you know the 8:31 protectionism 8:33 I what I just came arrived yesterday 8:34 from Mexico from the city 8:37 I've never heard of that before but you 8:39 may be you jiwe because of the small 8:43 dogs and you probably just happy just to 8:46 see this late 8:47 the price level is now unbelievably low 8:50 so a lot of countries like Turkey and 8:54 Mexico but even in Asia because of the 8:58 depreciation of the currency is against 9:00 the US dollars they have become quite 9:03 reasonable in price also for the first 9:06 time in many years I noticed yesterday 9:08 at the bar the price level here in 9:11 London is lower than in America because 9:15 the chapter standard dropped in sterling 9:18 that be area is maybe twenty percent 9:20 lower settings from a little ticket
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