Marc Faber Fears "A Vicious Circle To The Downside" Is Just Beginning

Tyler Durden's picture

"It's not just tapering that is putting pressure on markets," Marc Faber warns in thie brief clip. "Emerging economies have practically no growth and we have a slowdown in China that is more meaningful than strategists are willing to believe," he adds and this is "causing a vicious circle to the downside" in inflated asset markets as most of the growth in the world over the last five years has come from emerging markets. Faber suggests Treasuries as a safe haven in the short-term; but is nervous of their value in the long-term as "debt is becoming burdensome on the system."

"A lot of economic growth was driven by soaring asset prices"

On Treasuries:

"For the next three to six months probably they are a better place to be than equities,"


"I don't like [10-year Treasurys] for the long-term because the maximum you can earn is something like 2.65 percent per annum for the next 10 years, but Treasurys are expected to rally because of economic weakness and a stock market decline. In the last few years at least there was a flight into quality – that is, a flight into Treasurys."

On China and shadow banking defaults:

"China can handle it by printing money but it will again have unintended negative consequences... but the

problem is real... but it's not just in China..."

Faber warned of the risks of the present global credit bubble and said another slowdown could follow on the back of rising consumer debt levels – which had previously helped to create growth.

"Total credit as a percent of the global economy is now 30 percent higher than it was at the start of the economic crisis in 2007, we have had rapidly escalating household debt especially in emerging economies and resource economies like Canada and Australia and we have come to a point where household debt has become burdensome on the system—that is, where an economic slowdown follows."

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Ignatius's picture

No boom in the doom and gloom man.

InjectTheVenom's picture

eventually Marc will be right ....

James_Cole's picture

Marc Faber: buy UST

The truth hurts bitchez

akak's picture

Having to strategically pass through the dining room of the Titanic on one's way to the lifeboats does not thereby imply that one should remain indefinitely in the dining room of the doomed ship.

But we know that we can always count on James Cole(ostemy) to be a stalwart defender of the fiat US dollar, and of the corrupt status-quo more generally.

I'm still all but convinced that you are actually Jon Nadler.

BaBaBouy's picture

Fedipulation Continues...

GOLD Back To The Same 1250 Point, AGAIN!!! AND Dow UP...

Same Old Magical Bullshit.

kaiserhoff's picture

I usually aree with Faber, but the risk reward on treasuries sucks.

When someone wants to get out of treasuries, everyone will be rushing to the exit.

"Liquidity is always an illusion."

    Michael Milkin

rosiescenario's picture

"...collecting nickels in front of a bulldozer..." comes to mind... Taleb.


Even Faber displays that almost universal inability to correctly measure risk when seeking a reward....those boarding the Titanic believed the ship to be unsinkable.

new game's picture

there is a parking spot with your name all over it.

you are mr. bond? well than park that bitch!

Crisismode's picture



Something's happening here,

What it is, ain't exactly clear,

There's a man with a gun over there,

Telling me I've got to beware . . .


Well now, ain't that the truth.

Nehweh Gahnin's picture

The rhythmic chime of Buffalo Springfield.  Ahhhh...

They succeeded more than they knew.  They became the enemy, but at the same time taught their nemesi.

MeelionDollerBogus's picture

LULZ. Americans will try to be illegal immigrants to CANADA & all over the world during the Empire collapse.

New_Meat's picture


"Fedipulation Continues..."

  • Gravity
  • Taxes
  • Death

Yep, got it ;-)

- Ned

James_Cole's picture

I'm still all but convinced that you are actually Jon Nadler.

Nope, Jon is too busy running Barrick these days to hang out on zh.

akak's picture

Newsflash, James: Jon Nadler (and/or his ilk) HAVE been running The Evil Empire, a.k.a. Barrick Gold (sic), for nigh on three decades now.

By the way, what was that little revelation from Barrick oh, around ten years ago, in the Blanchard case about trying to claim sovereign immunity for suppressing the price of gold on behalf of the US government?

James_Cole's picture

There's an interesting endpoint to your logic which seems to have escaped you. If everyone is suppressing the gold price on belaf of the US .gov - including no less than the worlds biggest gold producer - what does that suggest about gold as investment vs. ust?

Note, I'm not making that argument but you are lol

akak's picture

There's an interesting gap (well, the latest of many) in your 'logic' which seems to have escaped you.

In what way does Barrick constitute "everyone"?

Oh, and there is another interesting gap in your 'logic' which seems to have escaped you: how many market distortions and manipulations have lasted indefinitely, or forever?

Indeed, you are looking more and more like Jon Nadler all the time.

James_Cole's picture


In what way does Barrick constitute "everyone"?

Everyone important: all the exchanges, futures, etfs, biggest gold producer (no doubt to your mind many of the other producers), the WGC... the list is exhaustive. Seemingly the only ones you are certain aren't supressing the price are a few internet sites + Schiff and his buddies lol


akak's picture

That's quite a netfull of red herrings you've dredged up there, james.

For the record, I have never implicated nor even discussed the exchanges, futures market, or ETFs as part of the official campaign of suppression of the price of gold.  The WGC most certainly has an anti-monetary gold bias, but again, is not part of the price suppression.  For that matter, most if not all 'establishment' organizations and mouthpieces are part of the anti-gold propaganda campaign, but do not and can not take part in the obvious gold price manipulation, which is presumably mostly in the hands of the US Federal Reserve and certain other central banks and their lackeys (i.e., JP Morgan).

James_Cole's picture

For the record, I have never implicated nor even discussed the exchanges, futures market, or ETFs as part of the official campaign of suppression of the price of gold.

My memory isn't good, but it's not that bad. 

akak's picture

And the weasel squirms when confronted by his (latest) lies.

Carpenter1's picture

I live in Canada and we have coined a term here; "Nillionaires"

Nillioanires are everywhere, they have leased cars, maxed out credit lines, and own million dollar houses with 5% down. They look like millionaires but have NIL in the bank.


It's epidemic, Canadians are absolutely clueless as to the reality of this world. Canada will be hit especially hard, since consumer debt is far higher per person than it was in the US in 2007.


Canada is doomed.

gmrpeabody's picture


Doomed may be a bit strong..., but in for a rude awakening seems to fit.

(along with the rest of us)

DoChenRollingBearing's picture

I would NOT have guessed that Canadians were more in debt than Americans!!  Thanks for that piece of "weird but true" news.

EARLPEARL's picture

only because they can borrow easier than americans.

pain_and_soros's picture

There is not an insignificant number of (socialist) Canadians who view themselves as being smarter than the "typical" American (redneck)....

After all, Canada avoided the worst of the "financial crisis" in 2008 since their banks were much more conservative (i.e. risk averse) than their US counterparts...our health care system is "superior" to the US system that serves only the rich, blah, blah, blah

There is a certain (completley unjustified) snobbiness to a large element of Canadian society (the socialists) who will be in for the shock of their lives when their treasured social programs are completely gutted by economic reality coming soon to indebted governments the world over...

Instead of learning from the mistakes the US (banks & consumers) made, Canadians are determined to prove they are "smarter" & in so doing, will prove they are just as dumb, if not dumber.

akak's picture

You know, I have liked almost every Canadian that I have ever met, but you are exactly right, there IS a certain snobbishness among many Canadians, along with their well-known nationalistic insecurity that is continually manifesting itself by Canadians constantly trying to convince themselves that they are SO different from the USA, when 99% of the time they (or their products) are just Americans with a red maple leaf slapped on somewhere.

Rock On Roger's picture

 You damn right.

Canadians are just about like americans except we lack the greedy liar gene. You know, the gene that makes americans invade, pillage, and murder in foreign lands so they can steal the natural resources of those lands.

So ya, Canadians are different from americans.

Stay the fuck off my lawn.


Stack On



Professorlocknload's picture

My favorite thing about Canada has a gold maple leaf stamped on it.

Rukeysers Ghost's picture

My favorite thing about Canada has a gold maple leaf stamped on it.


Gordon Lightfoots ass?

401K of Dooom's picture

Ya don't mind sucking up to Fidel?  Why brag about how wonderful you are now?

MeelionDollerBogus's picture

Fidel Castro was a fine man compared to almost any American leader, except JFK. Kennedy was a decent President.

MeelionDollerBogus's picture

It's not the products, it's the culture. We have a culture which is NOT built on corruption upon each other, though, if you ask any First Nations people, especially those stuck on reserves, they will have a deserved differing opinion.
We also have more land to work with than the USA so our future looks bright so long as we can keep the illegal American immigrants down to a decent input-stream. Useful: come on in. Racist, nazi, right-wing bible-thumper: don't bother crossing our border.

holgerdanske's picture

careful with double negatives 

401K of Dooom's picture

Ya wanna see Canuck pride at work?  Listen to the Howie Carr show at AM 680 WRKO, from Boston MA.  There is a guy named Steve, who iwll call in from Montreal everyonce in a while.  He is always giving the leftie line and bragging about Canada's health care system.  He is the perfect example of Canadian arrogance and makes ya want to vomit!

MeelionDollerBogus's picture

You're an idiot. Our healthcare system delivers more & costs less. Period. Americans always pretend wait-times are  years but they aren't. Wait times are manageable & the only situation I've ever seen go really wrong was a friend of mine who needed a heart transplant. He wouldn't stop smoking & he can't get a transplant until someone's ready WITH a compatible heart & no amount of money in the world will get you that faster unless you're willing to find a donor & kill him/her early. We don't do that & far as I know, Americans don't either.

MeelionDollerBogus's picture

Gutted? So far we have the tax dollars to pay for it. Show me the job losses & I'll agree with you. Those jobs pay revenue into healthcare & while transfer payments happen between Federal & Provincial, each province runs its own firewalled healthcare budget. That means if one province can do better it will do better even if another falters for a healthcare budget.

Plus there's prevention: I've been smart enough that I haven't needed to have a doctor at all since age 8.
I don't depend on the healthcare system but if a broken leg happens it's nice, though rare, to have an affordable fix-up.

MeelionDollerBogus's picture

Perhaps it's consumers trying to keep up with the latest iCrap & xBaux.
Or maybe cars? Dunno. Housing isn't in a bubble in every city, Toronto & Vancouver, Winnipeg don't represent the entire country.
On the other hand, we also don't have giant medical debt to deal with. Our healthcare system is very cost efficient per person, even per taxpayer, so the typical American model of 3 mortgages to pay for medical care isn't how we do things here.
I carry no debt. I don't know about everyone else but around me it looks like cars & houses are what does it. Student loans may be the case too but education costs far, far less in Canada than the USA.

The Gooch's picture

I think you mean the "North American Union".


PhilofOz's picture

Hmmm, a good term to use as far as the majority of Australians are right now. We can get so far into debt we can buy a house full of shit and not even commence payments for three years, by which time that shit you brought is already falling to pieces.

kaiserhoff's picture

I've been meaning to ask.

How can I get my ass deported to Australia?

mt paul's picture

dress up like a big kangaroo

ask for asylum 

Squid-puppets a-go-go's picture

the easy part is to steal a loaf of bread.

The hard part is to get a time machine to take you back to Ireland 200 years ago


spdrdr's picture

You will find that your donkey is ineligible for transit to (and agistment within) Australia or New Zealand, if it emanates from a Rabies-prone jurisdiction.




Rock On Roger's picture

I live in Canada and I've never heard of a nillionaire. Must be a eastern canada thing. Where I live the millionaires drive old pick up trucks and wear rubber boots. There is no keeping up with the jones. My debt is very low, my stack is growing higher and I woke up quite a while ago.

Eastern Canada is doomed.


Stack On

MeelionDollerBogus's picture

Agreed: I've never heard of it & see little of the Jones'town syndrome.
With the high incomes though I'd hope people would know better than to go so deep into debt. I guess not.
Let the good times roll & imagine it can never end. I didn't know Alberta & Manitoba had so many unicorns & leprechaun hunters.

MeelionDollerBogus's picture

Not this Canadian: stocked food, gold, silver, no debt, no excessive bills, reliable job & ability to just move on if needed.

Meremortal's picture

Hey bud, this is just business as usual. One of my favorites is when they analyze charts. Charts of the 'manipulated/controlled' market, be it gold, stocks or whatever.

It never occurs to them that charts derived from manipulated markets are meaningless.

But this is the place where you can have it both ways! Important charts from false and manipulated markets.




MeelionDollerBogus's picture

Charts derived from a manipulated market show the timing & degree of manipulation.
That's not meaningless, that's critical. Same as how NANEX charts fraud in quotes. Hunsader is not telling you how the market ought to move, he's showing forensic evidence of a crime scene.

MeelionDollerBogus's picture

No, the biggest gold producers will be China, a country, not a company.
The etf's don't even matter at all & Barrick certainly is NOT in charge of those.