Marc Faber: Fed's QE2 Could Trigger Market Correction

asiablues's picture

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JimboJammer's picture

Mr.  Faber  ...  Gold  and  Silver  will  not  pull  back...  It  will  shoot  up..

Lots  of  data  says  so...

Quinvarius's picture

The sell QE trade already happened.  The skittish have been already suckered.  Thus, the bull has been trimmed for another rally.

Judge Smales's picture

"Bloomberg interview on Oct. 36." ??

See, we're already getting hyperinflation. The calendar is growing out of control.

grunk's picture

The ruling elites are merely borrowing time from next month. Our kids will be born 45 years old. Live within your means? Let's start with the calendar. No more leap years.

dark pools of soros's picture

you still using the sheeple's calendar? those who run the matrix have many extra days each month

RockyRacoon's picture

The guy apparently makes a lot of money, and all people who make a lot of money are suspect, regardless of whether they are singing our tune or not.

e.g.: Bill Gross, George Soros, Buffet and friends.

DR's picture

Courtesy of the FED, QE* has lifted all asset prices and because of the gains now all investment managers think they are a genius.

Silverhog's picture

Faber sees Democrats--"sadly enough"--would get a shot at still retaining the majority. Did Marc have a stroke? He's talking rag time.

eigenvalue's picture

Nevertheless, since Chinese policymakers are keeping a close inflation watch, and are already taking actions (which is the key), I believe China is heading towards more sustainable growth.  


The writer should do more homework. The Chinese policymakers simply pretend to keep a close inflation watch. Just look at their track record. For years, interest hikes in China have never kept up with inflation. 

There is already suggestion in China to raise the inflation target. Since interest hikes mean huge amount of dud loans, the incumbent Chinese leaders can never have the guts to do that.

DR's picture



State-Owned Bidders Fuel China’s Land Boom

"All around the nation, giant state-owned oil, chemical, military, telecom and highway groups are bidding up prices on sprawling plots of land for big real estate projects unrelated to their core businesses.

“These are the ones that have the money to buy the land,” says Prof. Deng Yongheng at the National University in Singapore. “Because in China, it’s the government that controls the money supply and the spending.”


Mitchman's picture

China is the Mother of All Bubbles.

eigenvalue's picture

Exactly. Jim Chanos has done an indeed thorough research in China. China is Dubai x10000 and US subprime x 100.

asiablues's picture

I've written many posts (on zh and other sites) refuting Chanos, et. al. and will not repeat myself here. 

Mr. Chanos got lucky when Enron came to pass without the usual "bailouts" we now has grown so accustomed to see.  Enron is a company, and China is a country, and a huge one for that nmatter.  He will have to wait at least a decade for that to happen in China (he admitted this much himself as quoted by Reuters ), if it ever takes place, and if his portfolio can meet margin calls along the way.    

China, U.S. and Dubai are like apple, orange and pear from demographics, resources, to market structure.  Two crisis formations do not equal a thirld one in China.       

eigenvalue's picture

Guess you can read Chinese. So please check the following sites. You will have a better idea about the Real China and stop sitting in front of a pile of "statistics" and having pipe dreams.

eigenvalue's picture

I read your "analysis" but I think it is totally trash. Guess you have never lived in China for more than 2 years because your analysis was mainly based on "statistics" provided by the National Bureau of Statistics.

One of my high school classmates currently works at the National Bureau of Statistics. He tells me that these "statistics" are dictated by the "leaders" not collected through surveys. Actually that is already an open secret for the Chinese. One example is that the house prices increased by 1.5% in 2009 according to the National Bureau of Statistics. Anybody in China except those who "made" the number would puke over this number. 

Another argument of your "analysis" is that Chinese officials will do the right thing and avoid the crash. Well, since you are from Taiwan, guess you recognise simplified Chinese. Please google "Ying Di" (Movie Emperor") plus "Wen Jiabao". Wen Jiabao vowed to control house prices every year. But you see the results. 

In terms of demographics, do you know the "one-child policy". The demographic picture in China is far worse than anybody could imagine. Overseas investors now are still bewitched by the story of so-called urbanisation. Young farmers in those poor rural areas "will" continue moving to big cities and working in sweatshops. The cheap labour in China is thought to be endless. That's bullshit. Just go and visit any village in central provinces like Henan or Shaanxi for yourself. What's left in those villages are toddlers and the elderly. That's why food prices keep increasing in China because farming is not profitable! Most of the labour has ALREADY moved into cities.

It is true that Enron is a company and China is a country. However, Citigroup is a company like Enron and Japan is a country like China. Citigroup got bailed out but its stock prices are still below $5, far less from its peak. 

Anyway, we need some gullible people to buy the "China Story" for the clever to make money. Financial markets are a zero-sum game, are they?;)

jeff montanye's picture

to me, another suggestive item for your perspective is that two other times in modern financial history have so large a portion of foreign currency reserves been in one country as are now in china: u.s. 1929, japan 1989.  

eigenvalue's picture

Nowdays, lots of so-called experts on China have little idea how this filthy country works. For them, China simply means those five-star hotels on the Bund and the "statistics" provided by the National Bureau of Statistics. They haven't the faintest idea how precarious China is right now. 

steve from virginia's picture

The key to China's future is the amount the Chinese political elite are leveraged to the real estate bubble.

A the municipal level the leverage is huge with massive 'investments' on both sides of the books. Not only are the figures gigantic but the resulting high- rise piles are effective ads for the scams.  The Chinese property bubble is a currency trap. Letting the bubble deflate would crash the apparatchiks' portfolios, the same folks who hold the levers of power.

Since the Chinese elite won't bankrupt themselves the solution will be for the Chinese banks to continue to lend as they have for the past five years, putting more and more funds into circulation.

I've been calling for Chinese hyper- inflation since last June and with QE looking like a 'go' what is questionable is the rate. 5%? 7%? 11%?

That's the Chinese rate of inflation per day, of course.


mynhair's picture

My next fart could cause a market correction.

Stay tuned.