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Marc Faber: China Crisis Deniers Believe "The Market Is Wrong, And Government Is Right"
"Excessive credit growth eventually leads to a crisis," Marc Faber tells CNBC Asia, warning that "it has always happened and will again." The Gloom, Boom, & Doom editor briefly explains how the facts are that China is growing at no more than 4% per annum (if one looks beneath the government's manufactured data) and in the case of China "we have a gigantic credit bubble." Reflecting on recent price action (and the potential for social unrest), Faber exclaims, to deny the problems is to believe "the market is wrong and the government is right."
While this low-growth scenario rases concerns of social disorder and chaos in the nation, Faber is much more concerned about the unrest that will occur due to the expectations that speculative investments in the nation will always go up but appear now to possibly be going down...
"if everything is so great, why are Chinese stocks declining?, why are copper prices collapsing, why is iron ore dropping? The people who are benying these will be problems and stimulus will save the day are the same people who have said buy Chinese stocks for the last 4 years..."
"This is just like Japan..."
"Some Chinese stocks may be cheap... but they will get cheaper"
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China is dilusional
They (the Chinese) will deny to the end and won't even look over their shoulder.
Just build it...........dammit!
US aint no different, its just that instead of BUILD IT, they PRINT IT.
I rather have something tangible than not so the US is worse off than China.
China prints it too. Leveraged to nosebleed levels. They make the City of London jealous.
To think the whole world could end because I flooded the market with 50 lbs of copper is a scary thought.
The rehypothecation of industrial metals over there and using it to secure loans it is mindblowingly scary.
pods
True but at least they have used the credit bubbble to construct infrastructure (such as roads, dams, etc) that maybe useful down the road.
What has the USA done? Have you seen the infrastructure here? Its outdated and breaking down everywhere.
Its like the USA decides not to fix up the infrastructure in cities like Chicago because there is no point of doing it now when we are heading to a war soon.
Oh not trying to say our shit don't stink.
We do have construction going on though. Cookie cutter houses in the desert and the ongoing 20 year rebuilding of I-81 through Scranton PA for two examples.
pods
Has it only been 20 years?
Down my way there are simple intersections that have taken that long to revamp. In Delaware- Rt. 141 heading south connecting Rt. 52 to I-95. I think I was like 18 when they started widening a couple mile stretch of that road from 2 lanes to 4. Just finished last year.
well, what is more stupid?
1./ eat the capital instead of investing?
or
2./ iinvesting it in infrastructure, where there is no need and use for it?
in 1./ your weight goes up, you build some fat you can use in bad times
in 2./ your weight goes actualy down from all the work but you can watch nice pictures of empty roads and houses owned by cleptocracy
The word of the Chinese government vs. the word of Marc Faber...? Hmm, I´ll go with Faber
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Agree, pods, re industrial metals, gold for me.
What is it about Chinese stocks that make me want to buy more of them only an hour after having bought some?
Betting governments are right and the market is wrong has worked pretty well for a pretty long time now.
"This is just like Japan..."
Well if China takes a dump and consumption slows down, Japan and major Japanese manufacturing firms are toast. They will lose one of their greatest trade partners right as they post historic deficits. Could be the last blow to really set off their trade balance and we will see how well they can manage their spot as greatest debt to GDP nation.
China crisis deniers...Ukraine crisis deniers...Fukushima crisis deniers...Credit bubble crisis deniers....
So you deny that you are a denier?
So you deny that he denies he is a denier?
and youre not even alive for i am a distant echo of ur past·
i deny that comment
You left out the big one, climate change deniers.
They are very much like Spain. They build houses people speculate on and, despite a lot of people from the outside are warning about a pending collapse, they insist everything is fine until it isnt. Just several times the size and magnitude of Spain and there are few people that would not prefer a flat on the costa del sol to somewhere in the Chinese hinterland...
Considering the Chinese have something like 54,000,000 sq meters of developed and unoccupied real estate, I would say the Chinese bubble is a magnitutde of scale greater than the Spanish bubble. The bigger they are, the harder they fall.
This on cnBULLSHITc?
FAIL....said to empty headed perma-bull watchers (all 24 of them), and the corporate dick sucking cheer leading anchortwats......
and....a commercial following!
FUCK cnbc - scroll the data/mute the fucking noise emulating from the box..if you must watch this....
Turns the brain into mush..........
To the polluted Chinese Hinterland...to boot...but the Chinese have loans on loans it seems.....I thought they were all cash buyers...guess I was wrong...remember the big developers are usually connected to the governemnt somehow...by blood or by denands.....they will be bailed out in the end and own all the peasants stuff....the 1% will grow in China
House of cards, all of it, here, there, everywhere. As if I needed another reason to accumulate ammo and physical pm's....
Those CNBC guys are dumb as rocks. They just cannot accept simple truth.
I'm beginning to think that the citizens of the world should disconnect and learn to live like the Amish ... real fast. The world's leaders (political, banking, business) appear to be steering the entire advanced world toward a cliff in that direction.
Of course, most of the world is built on a massive pile of USD credit. China included. They needed to put their slave labor/environment polluting earned cash into something, so they put it in treasuries (mainly to dick with the exchange rate) And some of it went into all the b.s. projects back at the mainland..
Likely that the whole world's gonna crash. The winners will be those who crash less.
At least the Chinese seem to be investing in some productive projects overseas and in PMs.
As that old saying goes: "The one eyed man is king, in the land of the blind."
....and I have a feeling that may not be so much a choice in the future, but the reality...
china economy is analogous to a chinese buffett. looks good on the coupon but once you actually see the food you learn that it is old, poor quality, and too expensive. its only a matter of time until their counterfeit economy implodes. the world can afford only so many fake guccii hand-bags.
And might I add...analogous to that same buffett, China's economy may look like it offers much variety but it all seems to taste the same when you're eating it...
Credit growth is as dangerous for you as jumping out a window. It is not the momentum that is the problem. It is the sudden stop at the end that causes all the problems
The Arizona sky
The sky is bigger there
It took my breath away
That doesn't happen every day
Faber is pure editorial. I agree with his basic Austrian theories, but he simply issues scary predictions based on headlines. You don't get deep analysis from him.
True, and with the NWO push into the final terrorities of Asia not under their control, as well as the rest of the world such as Venezuela, it probably won't matter. Mother Nature is set to do some 'spring cleaning' and it no one will care about the market, as everything will soon be crashing.
True, and with the NWO push into the final terrorities of Asia not under their control, as well as the rest of the world such as Venezuela, it probably won't matter. Mother Nature is set to do some 'spring cleaning' and it no one will care about the market, as everything will soon be crashing.
Oligarchy run Markets vs CB controlled state financial sector and commodity price controls ...
We are heading thataway as the East-West divide hottens up and the New COld War makes markets subservient to command economy strategies in all regional markets, as this spiral boomerangs in all directions and is now gonna rock the world.
Heading for the 30s bigtime as the inherent sociopolitical asymmetry will oblige producers n consumers, creditor and debitor nations, all talking Tower of Babel lingo, to fall out of step and pull the rug from under their competitors.
When thieves fall out and blind spots abound...
This heralds the end of NWO CHindia vs EU/USA/JAp trilateral deal initiated under Bush/Reagan oligarchy -- as follow on to Dear Henry construct-- outsourcing "dollar for cheap tshirts" bonanza, post Berlin Wall collapse; the Walmart consumerista poster child of US fiat hegemony and Reaganomics FIRE model infamy.... Our money your problem, our big stick your chicken shit, our consumerista dysentry your constipated worker factory... meme is now gonna look jaded.
As Putin now sings like Newman as the pool Hustler : I'M BACKKKK !
Collateral DAMAGE...?
Big rush to Africa and REfortressING ME MONARCHIES, BIg time; to ring fence the RM resource RACE TO WHAT HASN'T ALREADY BEEN STOLEN IN THIRD WORLD.
What does that do to defence spending of Debtor nations....Will the resulting export boom for guns justify more MIC spending at home...?
Mutti will be caught between two inclinations : Schroeder's Ost politik of Gazprom and US/Nato prodding to encourage Putinistan bashing. Good luck with that.
Cameron will be looking yellow around the gills...My CIty ...my dream.
As for Hollande he now has Renzi stoking the fires of South/south race to making the 1000 euro generation into 500 euro deniers like in Greece and Andalusia.
Play on the "blind spotted" kings of dystopian world.
The Shanghai index has already lost 2/3rds of its value. Is the suggestion, really, that another leg down is coming?