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Faber Favours Commodity Stocks In India, Asia … and Gold
Faber Favours Commodity Stocks In India, Asia … and Gold
Respected economic historian and author of the “Gloom, Boom and Doom Report,” Dr Marc Faber has warned about the continuing and coming decline of western economic power.
He believes that the generation of young people starting to work today will be the first in two hundred years to have a lower standard of living than their parents had. He believes dividend paying Asian stocks will grow wealth in the coming years and remains an advocate of owning physical gold.
In a video interview with Barron’s, Dr Faber states,
“I meant that with respect to western societies and Japan where essentially the younger people – today’s generation – will earn less than their parents and they will have less wealth than their parents, inflation adjusted.”
“[This is] because we will have wealth taxes, we will have more estate taxes and we have essentially declining real median incomes in the western world and Japan.”
Faber has consistently warned since the late 1990s that this dynamic would come to pass as the West and the U.S. in particular exported its industrial infrastructure and binged on consumer junk fuelled by easy credit while the emerging economies of east Asia used the proceeds to focus on production rather than consumption to become industrial powerhouses.
He went on to say,
“In the countries that opened up post breakdown of the socialist/communist ideology – China, Soviet Union, Eastern Europe - and India of course we have an entire generation who will earn much more and will have a better standard of living than their parents had.”
He highlighted certain factors that are leading to this lower standard of living for young western people. Banks now generally charge more to hold one’s money than the interest they pay out. He cites the yields on Swiss ten year bonds at 0.46% as an example of how people, and especially young people, are disadvantaged relative to previous generations.
“These people will not enjoy the compounding impact that I enjoyed having started to work in 1970 when bond yields were 6% and they went to 15% and so forth. So during that period of time wealth was accumulating very rapidly plus we had a huge boom in real estate and in equities and bonds between 1980 and 2007.”
“That is not going to happen again.”
Agricultural commodities including palm oil and Asian companies processing agricultural produce is where Dr. Faber currently sees value. Some of these companies in Malaysia and India, for example, pay dividends between 2% and 4%.
The young people who invest in these types of company will see their wealth steadily rise as opposed to their western counterparts who rely on the casino of rising paper asset prices.
Faber also likes the stock market in India and thinks it could see gains of 15% next year. The new government is free market and enterprise friendly and Faber believes the central bank in India is the “world’s best central bank.”
Dr. Faber is a long time proponent of owning physical gold. He has consistently urged people to act as their own central bank in acquiring bullion coins and bars as financial security and he believes that storing gold in Singapore is the safest way to own gold today.
Dr Faber has said that in the long term, he thinks gold could rise to over $10,000 per ounce.
More importantly, he continues to emphasise the importance of owning physical gold as part of a diversified portfolio in order to protect against a coming stock market correction and the possibility of another global financial crisis and crash.
The short Barrons Interview with Dr Faber can be seen here
Our recent comprehensive Webinar with Dr Faber can be seen here
MARKET UPDATE
Today’s AM fix was USD 1,219.50, EUR 980.94 and GBP 778.24 per ounce.
Yesterday’s AM fix was USD 1,228.25, EUR 991.88 and GBP 783.82 per ounce.
Spot gold fell $2.20 or 0.18% to $1,227.40 per ounce yesterday and silver climbed $0.04 or 0.24% to $17.08 per ounce.
Gold in Singapore ticked marginally lower and this trend continued in London. Gold is down from Wednesday’s seven-week high as the dollar and European shares firmed, leading to a decline in a safe haven bid for gold.
The precious metal is still on track for a 2.6% weekly gain so far, its strongest since mid-October, as safe haven demand and short covering have given support.
Gold remains just below its highest in more than six weeks as investors weighed the possibility of deflation contributed to by falling energy prices against signs of rising demand.
Chinese demand saw volumes on the Shanghai Gold Exchange (SGE) for gold of 99.99% purity rise for a second day yesterday to 28,152 kilograms. This is the highest since November 18 in the world’s biggest gold buyer.
An improvement in sentiment was seen in the holdings of SPDR Gold Trust, the world's largest gold exchange-traded fund. The fund saw inflows of nearly 3 tonnes on Wednesday, bringing total holdings to 724.80 tonnes.
Silver continues to consolidate above $17 per ounce, while platinum rose 0.4 % to $1,238.25 an ounce and palladium gained 0.5% to $814.70 an ounce - the highest level since September.
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ZH followers are Davidians, and Tyler is David Koresh.
On a long enough timeline, they will all burn out in hell with their worthless gold
Where is the Au from the Shanghai vault going? Into the PRC central bank coffers?
I just spent 6 mos in India. The market there appears to be a good buy, but the SENSEX has gone up in tandem with the NY exchange, which makes me nervous. I am very tempted to invest, but I feel there must be a correction coming, so I may wait a while.
Modi has announced a national program to install water in homes. Kitchens and toilets. This kind of infrastructure project will be a boon for pipe, fixtures, and construction companies. A Spanish company has invented a new kind of water pipe highly resistant to accidental puncture. They are marketing it heavily in India.
Also, after the break with Honda, the motorcycle market is going to continue to boom. The Indian Royal Enfield is ramping up production. Also, the govt has decided to build its own arms industry. They tried building a modern tank, but ended up having to buy tank kits from Russia to assemble in India.
I will say if you are in the Banda Kurla area, you will have a hard time counting the cranes; you have to watch your step less you trip over a pile of rebar.
China, though, is still communist, so I disagree with him on that one. Also, why store your PMs in Singapore unless you also reside there? What are you going to do, hop a jet every month and go check on your stash? The only way to make that work would be to have a trusted Factor there to check on it at unpredictable times w/o notice to the vault.
Going to silver beaches as usual...Nicaragua. Gonna meet Snowden for a cuppa.
The American and world economy is in uncharted water and weird crosscurrents are clouding our economic future. Last quarter America's GDP came in at a strong 3.5% but the fact that a 10% jump in federal spending, mostly on Pentagon hardware bolstered growth and was very much behind the numbers.
This "pre-election" spending was the biggest increase in federal spending since 2009 when the Obama administration put in place a huge economic stimulus package. Mix in an upbeat November number concerning job creation, falling oil prices and ever higher stock market prices and new record highs and many people have the impression we are on a roll. The truth is if this market is as over extended and distorted as many people think a crash may occur at any time. The article below delves into some of the many crosscurrents at work that could bring the economy to an abrupt halt.
http://brucewilds.blogspot.com/2014/12/crosscurrents-cloud-future-economic.html
The stawk market is going to crash because that's what it does. it's boomed, and now it's going to crash. There are no Elliot Waves.
I believe that the market will decline but not crash. The Fed will pump it up. QE infinity!...
Why couldn't they just do that from Sept 17th 2008 to March 6th 2009 then?
Smart money is selling gold when it bounces to buy it back at 700$
The paper price may go to $700...but no one will be able to source any physical at that price....
you're an idiot. The price crashed from 1900$ to 1220$ and theres plenty of physical for sale. Just ring your favourite broker.
There may be none for sale to idiots like you who dont have a cent or penny left to buy cause you overleveraged yourself buying shining piece of crappy metal at way higher prices. you would have bought SP at the time, you would have been a richer man, and with a better oriented mind
Not my smart money. And not a lot of anyone else's smart money, etiher. In fact, you're full of shit. I'm going on record as saying that Silver has made it's low for the '14-'15 year; and now you can all laugh at me again when I'm wrong; but seriously, I'm beginning to believe that;s the case. T he Silver price chart has been a real defensive brick wall; and something has changed in the tone of these markets. I think Silver will close Dec. '15 much higher than it's trading now, and it won't violate it's recent intra-day lows around $15.50.
lets be serious, Goldcore said Smart money was buying on a dip starting from 1900$; 1800$, 1700$, 1600$, 1500$, 1400$, 1300$...
the no-smart money has sold and is richer than the so-called smart money...
Goldcore analysis is BS. They are just a broker feeding on naive ignorant people.
the anti-faber and by that anti ZH comments are justified
they've been trotting out the same old hyperinflation crap for years now and all it has been for is to help dealers sell their bullion so they can pay to post ads here.
lot of people here have lost money. PM's 10% of portfolio , not 90%.
some time its hard to admit bernanke and his kazars sorted out the mess created by blankfein and his ashkenazis as well as could be expected.
Going to take your advice this time and actually have a few drinks this New Years BD, I expect a very rough year to follow.
better to wait for the Dumb money to start buying than catch a falling knife which could go to 700$
MF continues to be mesmerized by Asia EM economies. These places are infested with crony governments. A continuing stream of companies including resource based companies ripping off share and bond holders.
The laws governing property rights and contracts are pathetic. At times of economic stress, protectionism rear that destroy long term foreign investments.
His casino of papers is also much alive in Asia EM markets
And the US is not a 'crony government'? Wake up sheeple!!
Faber is welcome to his infamous Asian Stocks; I wouldn't touch them with your dick; but I think the metals are kind of rolling over in their sleep and getting ready to wake up.
We are approaching Peak-Fraud. Soon there won't be enough easy to extract fraud to go around to sustain the markets, leading to collapse.
If the next stock market crash is big enough the only things left of value will land and Gold/Silver, all other companies will soon have no value left in them, and soon be bankrupt.
So people will no longer need to eat, buy products, and so on? No companies will exist to farm, produce food, produce transportation, sell fuel, etc? Pretty bold prediction.
*trashed double post*
Faber doesn't have any idea what to buy or sell, and neither does anyone else if Phoenix Capital is right:
"No matter how sophisticated your analysis is, if your data inputs are garbage, your forecasts are garbage. We now know that the prices in just about every asset under the sun are garbage. Good luck computing with that."
Before I retired my living depended on predicting economic cycles and their effect on consumption and investing.
If the above is correct, nobody knows anything. Which means looking at all the pretty charts here is a waste of time. Forecasting collapse is a waste of time too, since there is no way to tell how near or far away the next one is. IMO, there is no crash coming because we are in the crash now. Things could get worse, but this is the long-predicted crash.
Ah, but there is "clean" information available that can predict major crashes in assets as well as consuming patterns, booms, inflation, deflation, etc. It can forecast far into the future. I learned how to apply it in college, and later studied it more in the early 90's. At that time it predicted a real estate crash and financial crisis in 2009. That's pretty close, all things considered.
The same method applied now predicts that we will grow out of the current problems by 2023-2025 and we will be back to what we used to think of as a typical economic cycle. That general pattern will hold for decades.
The data are demographic statistics, which are available from multiple private sources, from local to global.
The Tylers should get hip to that. People could actually profit.
aahahhaha! ... seriously quotes Phoenix Capital!
FAIL
faber is a clown with the hershey squirts coming from his mouth
We;re going to need a time stamped reference to your public post predicting the 2009 crash; IMO; you're full of shit.
So 8 to 10 more years of misery. Wow, that is really something to look forward to. People profited from slavery too...
There may not be a major quick crash, and if not, there will be a long slow death of the stock market, and paper currency.
Far too few people understand Fiat Currency at present, but the masses are learning more, and at a quicker pace, and this will continue as the downturn continues. At some point we will reach critical mass, at this time, Weimar will be understood. Gold will be the only Money as it has been all along.
The only people that prosper from fiat currency is the Bankers and the Political Elite. The people will always have their wealth stolen by the use of it.
Right, the asset price of gold is garbage because the value of the dollar throughout it's lifespan has always trended one way, up.
https://www.youtube.com/watch?v=IGYaFMFU63U
At least temporarily, Gold will work out fine. Longer term, however, it has some downside left...
http://www.globaldeflationnews.com/gold-elliott-waves-forecast-a-multi-m...
This is from April? Really? With all the videos out there you come up with an April video?