Wednesday, August 28, 2019

Marc Faber : #Trump Changes his mind 5 times a day he is desperate to get reelected in 2020 .

In a recent interview with the economic times of India , Doctor Marc Faber, Editor of the Gloom, Boom & Doom Report talked about what he thinks of Trump , the american and global markets . Quote : first of all I have to say that Mr Trump changes his views about five times a day, but he is kind of desperate to get re-elected in 2020 and that is not that far away. We have the election in a little more than a year and to be re-elected, he has to show a strong economy and not a recession in the US. The US is an asset driven economy. We have an unusual situation in most western equity markets, though not in India, where it is not the economy that drives the stock market but it is the stock market that drives the economy. If the stock market goes up, the economy has performed okay, if stocks drop 10-20%, we will have recession. We are not down 10% from the peak though we are down modestly. So Trump is very conscious about the stock market and he believes that the Federal Reserve by cutting rates could essentially boost equity prices. I am not so sure about that because the equity market nowadays looks at different factors than just monetary factors. If you just looked at monetary factors, the Japanese Nikkei should be the strongest stock market in the world and it is not or European markets that have had negative interest rates for a very long time, should be the strongest markets but they are not. we have the longest economic expansion on record and we have the longest ever bull market in US stocks. So, we are nearing the end of the economic expansion and the stock market cycle. You will probably hear from some market commentators that bull markets do not die of old age, they die of something different, tight monetary policies or a fiscal shock or a political shock or what not. But the conditions today are that investors are heavily invested in equities in the US. They are bullish, otherwise you would not have all these IPOs of companies that do not make any money and they immediately go up in the secondary market and you would not have the high valuations among FAANG stocks. There is a lot of optimism about US equities and cash levels are low. So, any disappointment could lead to a longer term decline in the market. I do not believe you will get the crash like in Argentina where essentially in dollar terms, the stock market performance was down 37% and the currency was down so altogether more than 50% in one day! That is a crash, 50% in one day. I do not think you will get that in the US , end of quote . It is interesting to remind our viewers that Marc Faber was an early endorser of Trump during the 2016 campaign , he announced back then : "I Will Vote For Trump, Because Hillary Will Destroy The Whole World" . You can buy the Singapore stock market with a four percent dividend yield. Singapore is a relatively sound economy. It's diversified and it's well run, unlike the U.S., unless, of course, the U.S. is run by Mr. Trump. Then the U.S. will improve. It is all relative. Given the alternatives, I would vote for Mr. Trump, because he may only destroy the U.S. economy, but Hillary Clinton will destroy the whole world. Look at her nation building in the Middle East, how successful that has been.

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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