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Marc Faber On Global Food Inflation And His Stock Market Outlook

Tyler Durden's picture


Marc Faber appeared yesterday on CNBC and explained why he is the latest adherent of the "reverse decoupling" theory, whereby the emerging markets are to underperform the developed countries. Of course, anyone who has seen the action in the Shanghai Composite in the past 3 months does not need to be convinced of this. Faber, then proceeds to share some perspectives on Chinese geopolitical ambitions in light of the Hu visit (thank you $19 billion China-US Boeing arrangement which has already cost 1,000 US jobs), and evaluates the impact of rampant money printing on the cost of living in developing countries. To the latter recent riots, and occasional revolutions, across Africa and the Middle East probably frame the issue best. Here is Faber's take: "My concern is this - we have money printing around he world, and in particular in the US, and that has led to very high inflation around the world, and in very low income countries, energy and food account for a much larger portion of disposable income than in the United States. So these countries are suffering from high inflation and that reduces the purchasing power of people, so I think that monetary authorities in emerging economies will have to tighten, or they will have to let inflation to accelerate, both of which are not particularly good for equities." Well, yes, but who cares: after all it is only a matter of time before someone on CNBC pitches the tremendous stock market return in such stunning examples of monetary prudence as Zimbabwe and Weimar Germany.



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Thu, 01/20/2011 - 15:16 | 890671 tellsometruth
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Anyone here going to buy the fucking dip in phys silver right now?  Or will the friday close be the best time as usual...

Thu, 01/20/2011 - 15:21 | 890685 Jason T
Jason T's picture

I sold covered calls on SSRI back when was 20 at the 22 strike in like Oct.  Am planning to buy SSRI back.. under 23 i hope and will wait till early next week most likely.  

Thu, 01/20/2011 - 15:32 | 890689 Salinger
Salinger's picture

it is only a matter of time before someone on CNBC pitches the tremendous stock market return in such stunning examples of monetary prudence as Zimbabwe and Weimar Germany.


old news... (while not mentioning Weimar or Zim the CNBSers point out the dynamics of the wedding season in India as a drive of gold)

Thu, 01/20/2011 - 16:07 | 890877 dark pools of soros
dark pools of soros's picture

not seeing much of a dip from sellers..  the spot price seems fake

Thu, 01/20/2011 - 16:42 | 891060 Jaw Knee Cash
Jaw Knee Cash's picture

I'm picking up some physical silver today or tomorrow; picking up the rabbits from the Lunar II set also to keep my set going.

Thu, 01/20/2011 - 15:18 | 890678 SayTabserb
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I've been reading Zerohedge a long time now (since before it acquired its own prop. dotcom) and one development I really like is that increasingly ZH demonstrates "soul" in its analysis.  Not "liberal," not "conservative," but humane and on the side of civil liberties and social justice.  This is good stuff.  Makes me feel good that this is my favorite site.

Thu, 01/20/2011 - 15:29 | 890711 andybev01
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+ number one soul brother.

Thu, 01/20/2011 - 16:11 | 890904 Pants McPants
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Agreed and agreed.  I am in awe of the intelligence of the majority of contributors and commenters on this site, too.  I've learned a ton.

Thu, 01/20/2011 - 16:29 | 890982 rosiescenario
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Thu, 01/20/2011 - 23:54 | 892327 rocker
rocker's picture

+1,  A+,  Simply the Best.   ZH Rules.   Tyler is the Best.

Thu, 01/20/2011 - 15:19 | 890681 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Marc Faber is a machine sent back through time to kill Keynesian economics.

Thu, 01/20/2011 - 15:21 | 890686 suteibu
suteibu's picture

They didn't send him back far enough to have prevented this crap.

Thu, 01/20/2011 - 15:32 | 890720 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


Thu, 01/20/2011 - 15:54 | 890815 suteibu
suteibu's picture

But I believe that, as a species, human beings define their reality through suffering and misery.  Agent Smith, The Matrix

Thu, 01/20/2011 - 17:20 | 891289 synonym
synonym's picture

Very funny Jimmy.

Thu, 01/20/2011 - 16:31 | 890997 Jaw Knee Cash
Jaw Knee Cash's picture

'They' tried to send him back to 1912, but his head was too large for the time-transport-transmogrifier.

Thu, 01/20/2011 - 16:34 | 891016 Don Birnam
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He has, however, a formidable adversary in the form of the T-1000 "Tim" model mimetic poly-alloy monetary nanomorph.

Thu, 01/20/2011 - 16:45 | 891083 Jaw Knee Cash
Jaw Knee Cash's picture

Interesting note: that particular T-1000 "TIM" model has the updated DORK programming.

Thu, 01/20/2011 - 15:25 | 890691 HamyWanger
HamyWanger's picture

Very solid bounce in equities today.

I've just bought all the AAPL shares I sold tuesday, and sold the rest of my gold.

The SPX will be at 1350 before May.

Thu, 01/20/2011 - 15:32 | 890702 plocequ1
plocequ1's picture

I did the same thing a couple of months ago. I sold and bought back. Since then, I do not look at the stock. I will hold APPL till i retire

Thu, 01/20/2011 - 15:55 | 890818 onlymyopinion
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After todays strong buying, I doubt this market see's 1250 again.  Glad I added this AM.  These types of pullbacks will be short lived.  The saying in '11 is going to be buy high, sell higher.  IMO, dips won't last more than 48 hours.  Too much cash waiting to get on the train.  Next stop for the Dow-locomotive, 12,000 within 2 weeks.

Thu, 01/20/2011 - 15:55 | 890819 Robot Traders Mom
Robot Traders Mom's picture

Why do you say shit like that? You need money to buy gold and you are a troll that is probably about 22 years old and unemployed. Nobody believes any of your stupid bullshit about owning a home decor store.

Thu, 01/20/2011 - 16:37 | 891034 Don Birnam
Don Birnam's picture

This is the "Hamy" iteration. Hamy runs a deli in Queens.

Thu, 01/20/2011 - 16:57 | 891154 Bendromeda Strain
Bendromeda Strain's picture

I thought he ran queens in Delhi...

Thu, 01/20/2011 - 17:01 | 891182 Don Birnam
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That one would be the "Wanqer" iteration.

Thu, 01/20/2011 - 17:14 | 891264 Calmyourself
Calmyourself's picture

Whew, almost replied thank gosh I checked the spelling first...

Thu, 01/20/2011 - 19:38 | 891744 huggy_in_london
huggy_in_london's picture

hmmm more likely to be 10% lower in 8 weeks

Thu, 01/20/2011 - 15:24 | 890694 erik
erik's picture

Soft commodities are all making a huge comeback today so far, the majority of them are now green.  Treasuries still selling hard.

Recent history still suggests that the highs will be re-visited.  Probably by Monday at the latest, provided that BAC or Wikileaks don't spring any surprises.

Thu, 01/20/2011 - 15:35 | 890715 DR
DR's picture

Did you read the latest thoughts from the China kiss asser, Immelt?

China to replace U.S. as top economic power says GE CEO

"despite any risk of handing over advanced technology -- will mean sharing some of the most sophisticated airplane electronics.

"It is going to be the biggest economy in the world," Mr. Immelt said of China. "The only question is when."

Yea, Immelt, like China is going to keep you around once they steal the needed technology to wipe your ass out in the global markets.

What a dumb ass--and this guy is on Obama's President's Economic Recovery Advisory Board!

Thu, 01/20/2011 - 16:39 | 891045 Don Birnam
Don Birnam's picture

Frankly, traitorous.

Thu, 01/20/2011 - 15:35 | 890731 Sudden Debt
Sudden Debt's picture

I was just thinking.

People are starving and we are talking about how much sence the stockmarket still makes.

Who are the assholes now?

Thu, 01/20/2011 - 15:46 | 890776 Woppopotamus
Woppopotamus's picture

So why don't you go feed the starving people instead? Maybe you'll solve the problem with refeeding syndrome.

Thu, 01/20/2011 - 15:54 | 890813 hedgeless_horseman
hedgeless_horseman's picture

Let them eat AAPL.

Thu, 01/20/2011 - 15:49 | 890788 Dagny Taggart
Dagny Taggart's picture

I thought we were talking about how much nonsense the stock markets make?

Thu, 01/20/2011 - 16:59 | 891168 Captain Kink
Captain Kink's picture

when the market had rebounded to flat, S&P even up fractionally, my entire screen was still red.  And i have everything on there, from tech to banks, healthcare to commodities.  WTF.

Thu, 01/20/2011 - 18:35 | 891558 StychoKiller
StychoKiller's picture

Do something about it:

Alleviate some suffering.

Thu, 01/20/2011 - 15:38 | 890744 Rockfish
Rockfish's picture

light of the Hu visit (thank you $19 billion China-US Boeing arrangement which has already cost 1,000 US jobs),

I went to that link read the article but there was no reference to $19b china us Boeing deal. I would be surprised if there were nodeal. I assume we are shipping more jobs out of the country to further enrich our 1% crowd so they"ll buy more coach bags and this will in turn create a tinkle down your leg affect.

Thu, 01/20/2011 - 16:29 | 890983 sourgrapesson
sourgrapesson's picture

If the deal was inked for sure I don't know either however my neighbor works at the Long Beach plant and he is getting laid off along with 899 other Long Beach C-17 Boeing workers.

So much for job growth........................

Thu, 01/20/2011 - 15:40 | 890752 john-zh
john-zh's picture

I would call this a funny outcome.

Faber kept telling us,
A) that the asian markets are to prefer to the western economies, and
B) that price inflation ist dead sure to come due to relentless money printing.
Why did it take so long to reason that these countries will be the first to suffer from crazy price increases in food and clothing?

Thu, 01/20/2011 - 16:09 | 890890 Spitzer
Spitzer's picture

Why did it take so long to reason that these countries will be the first to suffer from crazy price increases in food and clothing?

All these soft pegs and the Chinese dollar peg could export this inflation back to the US so fast that Mish would hang himself. They could revalue the RMB by 50% in 15 minutes.

Thu, 01/20/2011 - 15:50 | 890791 alter ego
alter ego's picture

1Billion people to feed vs 300 million.

Who is in a better position, US or China?


Thu, 01/20/2011 - 16:12 | 890907 dark pools of soros
dark pools of soros's picture

ours weigh 4 times as much....

Fri, 01/21/2011 - 05:52 | 892690 shortus cynicus
shortus cynicus's picture


additionally they may switch more to vegetarian food - feeding animals is a big wasting of nutrients

Thu, 01/20/2011 - 17:42 | 891380 Jaw Knee Cash
Jaw Knee Cash's picture

In light of the recent "food safety and modernization act", the answer is China.

Thu, 01/20/2011 - 15:50 | 890795 puntme
puntme's picture

This guy should be hung for treason. 

Thu, 01/20/2011 - 15:54 | 890814 HarryWanger
HarryWanger's picture

Meanwhile, SPX has gone green. Looks like a nice turnaround day. Still think we'll see 1250 fairly soon but I'm pretty impressed with the turnaround today. Nice intraday move for those dip buyers earlier today.

There was no fundamental reason for the market to be down today. All the data was good to very good and earnings this morning with Morgan putting up really impressive numbers. All and all, no reason for the market to be down and the dip buyers came in and snapped up cheaper shares.

Thu, 01/20/2011 - 15:58 | 890839 onlymyopinion
onlymyopinion's picture

1250 is an ALL-IN print.  I'd love to see it but sure ain't betting on it.  20% cash left plus a whole slug of margin waiting to pounce. 


Recovery gaining lots of steam and tons of cash waiting to get in the game.  1400+ is E-Z Moola. 

Thu, 01/20/2011 - 16:02 | 890851 Woppopotamus
Woppopotamus's picture

Hey Harry,

I'm sure this has been addressed previously. But are you Johnny Bravo? Something very familiar about this post and JBs old ones.

Thu, 01/20/2011 - 16:11 | 890900 HarryWanger
HarryWanger's picture

No. Contrary to what the fringe here thinks, I have only one avatar and it's HarryWanger. 

Also, contrary to what the fringe here thinks, I do own a small consumer discretionary retail business and reported throughout the fall that we were seeing a big pick up. Of course, that was dismissed here but as we saw retail sales and the market steadily went higher.

January, typically one or our slower months, is off to a great start. It will be the best January in the 9+ years this company has existed.

Thu, 01/20/2011 - 16:16 | 890923 Woppopotamus
Woppopotamus's picture

I thought zerohedge was the fringe. Maybe I'm at the wrong place.

Thu, 01/20/2011 - 17:18 | 891280 Calmyourself
Calmyourself's picture

No kidding, if this isn't fringe I took the wrong pill I want a do over.. By the way, wifes 401K is doing very nciely thanks Harry.  When we pull it out to buy food would we be better off just eating the check itself at that point?

Thu, 01/20/2011 - 16:13 | 890906 Spitzer
Spitzer's picture

who is bearish on stocks other then the deflationist dollar bulls like Mish, Prechter and Denninger ?

Name one inflationist that is bearish on stocks.

When Tyler writes DOW 36000, he means DOW 36000.

Thu, 01/20/2011 - 16:22 | 890947 SRV - ES339
SRV - ES339's picture

There was no fundamental reason for the market to be down today.

I guess it's just a coincidence stocks and PMs are hit prior to a Treasury Auction... this is so predictable it IS a fundamental factor. The "nice turnaround" simply means the auction is over... but please use it to prove your point of how "healthy" the market is.

Is that you Liesman... Steve, what's up?

Thu, 01/20/2011 - 15:56 | 890828 gloomboomdoom
gloomboomdoom's picture

GOLD is a bubble? Or is it China? Or is it Illinois? Or is it New York?


Thu, 01/20/2011 - 16:31 | 890999 blackhearts REI...
blackhearts REIGN gold's picture

Thanks. Love your site... Have it as my homepage at work

Thu, 01/20/2011 - 16:01 | 890848 cxl9
cxl9's picture

The stock market in Weimar Germany actually did not do all that well on a purchasing-power adjusted measure. For one thing, companies were not paying dividends, or not enough to keep up with inflation, and were instead hoarding wealth in foreign countries or using their cash to purchase hard assets domestically. Speculative excess also led to wild and random fluctuations on the stock market, and of course the resulting misallocation of capital. Most "investors" were simply reduced to gambling in a market which was being battered by massive distortions caused by outside forces.

Thu, 01/20/2011 - 16:09 | 890891 Deathtöngue
Deathtöngue's picture

You broke the rules. Every post mentioning "Weimar" and "Zimbabwe" must also use the word "fiat".

Thu, 01/20/2011 - 17:17 | 891279 jackplata
jackplata's picture

Buy the dip in silver.

Thu, 01/20/2011 - 17:21 | 891294 silver is money
silver is money's picture

That is what Jim Rogers was saying from while ago...(regarding commodity prices)

Thu, 01/20/2011 - 18:13 | 891481 Obnoxio
Obnoxio's picture

Maybe the Dollar devaluation is necessary to crush foreign currency pegs. Multinationals don't seem to care about losing intellectual property and technology to China. In the end capitalists and corporations want to find workers to be exploited cheaply. The US and Canada have plentiful food, water and natural gas. If the solar/wind/battery infrastructure ever gets going oil dependence will be a thing of the past. Water and food may eventually be more valuable exports than oil. The part that is diifficult to stomach is that bankers get paid based in Federal Reserve policies not any skills or knowledge.

Thu, 01/20/2011 - 18:53 | 891608 silver is money
silver is money's picture

we might want to invest in foods that can store for a long period of time such as Cheese and wine. 

Thu, 01/20/2011 - 19:56 | 891789 chump666
chump666's picture

dip buying on inflation style panic sells?  probably bull traps galore, from commodities through to stocks.

there is fat finger sell coming up.

Thu, 01/20/2011 - 21:23 | 891978 prophet
prophet's picture

PM stock prospectors:  Try a put selling strategy during times like these - you either get in at your price or pick up some proceeds for having tried. 

Do NOT follow this link or you will be banned from the site!