Marc Faber

Dr. Constantin Gurdgiev, a non Executive member of the GoldCore Investment Committee, has again analysed the data of US Mint coin sales in  Q1 2012 and has looked at the data in their important historical context going back to 1987.  He finds that the data regarding gold coin sales in Q1 2012 confirms that there is “no hysteria and no bubble here”.  Dr Gurdgiev finds that while volume of sales in Q1 2012 fell from the quite high levels seen Q1 2009, 2010 and 2011, demand was much stronger than “in the pre-crisis average for 2000-2007.” Also of note is the fact that despite the worst financial and economic crisis the modern world has ever seen being experienced since 2008 demand has remained below the record levels seen in the aftermath of the Asian debt crisis and unfounded Y2K concerns.  Interestingly, Dr Gurdgiev finds that the historic data (since 1987) shows that the "gold price has virtually nothing to do with demand for US Mint coins - in terms of volume of gold sold via coins." He finds that the demand for gold coins has little to do with the price in general and that “something other than price movements drives demand for coins”.

Mark Faber was on Bloomberg TV earlier, presenting his latest outlook on markets and the economy, but first he summarizes 2011's first quarter which as repeatedly observed here before has so far been a mirror image of 2012, with the only different that while it ran up on 2010's QE2 back then, now it has surged on the transitory flow (not stock) impact of two back to back $1.3 trillion LTROs. "I think that if you look back at a year ago we made a peak of 1370 on S&P on May 4 and then dropped sharply to 1074 on October 4. Then we recaptured the lows in November and December. Since then, the first quarter has been very powerful and has surprised investors because of its strong performance. And I think now the expectations are very high. The market is no longer oversold the way it was in December. And everybody thinks that the race is on, go along with equities, the hedge funds have positioned themselves on the long side and optimism is high. I would be very careful at this stage." As for his outlook, he is "reluctant to short" in a money-printing environment, believes that Japan will provide the best equity futures returns (more easing from the BOJ appears imminent), is confident margins will roll over (as they already have) on the back of record for this time of year input costs, and thus thinks earnings will disappoint, sees inflation running 5-10% more than a year earlier, and is still accumulating gold every month. Overall, mostly as expected from the pony-tailed one.

Marc Faber does not mince words. He believes the money printing policies of the Federal Reserve and its sister central banks around the globe have put the world's currencies on an inexorable, accelerating inflationary down slope. The dangers of money printing are many in his eyes. But in particular, he worries about the unintended consequences it subjects the populace to. Beyond currency devaluation, it creates malinvestment that leads to asset bubbles that wreak havoc when they burst. And even more nefarious, money printing disproportionately punishes the lower classes, resulting in volatile social and political tensions. It's no surprise then that he's feeling particularly defensive these days. While he generally advises those looking to protect their purchasing power to invest capital in precious metals and the equity markets (the rationale being inflation should hurt equity prices less than bond prices), he warns that equities appear overbought at this time.

All you need to read.

Swiss money manager and long term bear Marc Faber, aka "Dr Doom", says political risk in the Middle East has increased significantly with war between Iran and Israel “almost inevitable”, and precious metals and equities investments offer some safety. "Political risk was high six months ago and is higher now. I think sooner or later, the U.S. or Israel will strike Iran - it's almost inevitable," Faber, who publishes the widely read Gloom Boom and Doom Report, told Reuters on the sidelines of an investment conference. Brent crude traded near $123 per barrel in volatile trade on Tuesday on fears of a disruption in Iranian supplies. Israeli Prime Minister Benjamin Netanyahu showed no signs of backing away from possible military action against Iran following a Monday meeting with U.S. President Barack Obama. "Say war breaks out in the Middle East or anywhere else, (U.S. Federal Reserve chairman) Mr Bernanke will just print even more money -- they have no option...they haven't got the money to finance a war," said Faber. "You have to be in precious metals and equities ... most wars and most social unrest haven't destroyed corporations - they usually survive," he said. He said that Middle East markets had largely bottomed out, though regime changes from the Arab Spring revolutions were unlikely to be investor-friendly.

While Marc Faber shares the usual stock of insightful market commentary, together with timing inflection points, and extended thoughts in the attached Bloomberg TV clip, it is the fact that he has officially joined Bill Gross, and so many others, in supporting the candidacy of Ron Paul as president. It is rather sad that only those who see beyond the surface of the current pyramid scheme facade, are bold enough to endorse the only man who is right for the White House. Fast forward to 15 minutes into the video to hear Marc Faber: "Ron Paul would be a very good president."

The only thing that is as consistent as Marc Faber's message to get out of government bonds ahead of a bout of global hyperinflation which will arrive once the vicious cycle of printing to pay interest finally dawns (which in turn would happen once central planners lose control of an artificially created situation, which by definition, always eventually happens), is the passion with which he repeats it over... and over... and over, like a man possessed, if ultimately 100% correct. In an interview with Bloomberg's Sara Eisen and Erik Schatzker this morning, he does what he does best - cuts to the chase: "if you think it through and you are as bearish as I am, and you think the whole financial system will one day collapse, we don't know if in 3 years, or 5 years, or 10 years, but one day there will be a reset, and everything will be essentially started anew, then you are better off in equities than in government bonds, because a lot of government bonds will either default or they will have to print so much money that the purchasing power of money will depreciate very rapidly." When asked if he feels uncomfortable predicting a calamity in bonds again, as he did back 2009, Faber is laconically empathic: "it is true that last year the 30 year bond returned 30%, and i owe David Rosenberg a bottle of whiskey" but analogizes: "from August 1999 to March 2000, the Nasdaq doubled, but at no time in that timeframe was it a good buy. And after it people lost a lot of money. We have now a symptom of monetary inflation and this is record corporate profits, and the second symptoms is essentially a bubble in high quality bonds: people seem so insecure and so much worried, they would rather be in a US bond with no yield, than in bonds that may not repay me, or in equities that may drop 30%. But it does not make them a good buy longer term." Yep: only Faber can get away with calling the bond market the second coming of the Nasdaq bubble and look cool doing it.

Dr. Ben Bernanke went to school and never left. He is an academic who has never worked in the private sector yet controls the fate of trillions of Dollars, Euros, Yens and Pounds. Today he is smiling. Dr. Marc Faber also went to school, but he didn’t stick around. He has worked exclusively in the private sector and today is considered one of the most prescient investors on the planet. Today he is also smiling. To better appreciate all the smiling, one must understand exactly what happened or better still, what didn’t happen in Brussels last week. In the eyes of Dr. Bernanke and Dr. Faber, the historic 17th emergency summit meeting by the Europeans to solve their money problems went off without a hitch. Not only did the Euro-Elite fail to resolve their debt crisis, they failed miserably at even coming close to recognizing the problem. It’s this distinct lack of recognition that is turning frowns into smiles. Dr. Bernanke is smiling of course because he is a money printer. The continuing inability of the Euro-Elite to solve their problems virtually guarantees a 2012 recession in the Old World. In return, this will also create a recession in the US which will provide plenty of excuses for Mr. Bernanke to once again print money under the guise of QE3. Dr. Faber’s uncanny ability to understand the big picture and foresee the response from financial markets allowed him to predict the 1987 crash, the 2008-09 crash, and the resulting 2009 stock market rally. Dr. Faber is smiling today not because he agrees with Dr. Bernanke’s fondness for money printing, but rather because the global financial system is developing exactly as he has envisioned. This vision of course is a money maker for both him and his clients.

It has been a while since the Marc Faber graced Zero Hedge. It is time to remedy that. Providing his traditional dose of snark, tragedy and realism, the Gloom, Boom and Doom report author spoke to Bloomberg TV, and when asked what his outlook for the euro is, dispensed the following pearl: "I have a very special stock tip for you. The symbol is g-o-l-d. That is what I prefer to hold. Both the euro and the dollar are long-term undesirable currencies, especially given zero interest rates in the U.S. Equities to some extent become like cash because they become a store of value compared to cash at a zero interest-rates. Paintings become a store of value, stamps become a store of value." Needless to say, this is the kind of response that will get him banned from CNBC for life when Bartiromo breathlessly asks him, "ok, you think the world is ending, so what five stocks would you buy." As for his latest report, "It's actually quite gloomy but if you're very gloomy what do you invest in: Treasuries, Italian bonds or commodities or equities?  I happen to think U.S. equities are not terribly expensive, so relatively speaking to other assets, they may for a while actually do quite well." Considering the ridiculousness of the market over the past two weeks when it has gone up on nothing but lies, Faber just may have a point. 

It was Washington and the lobbyists who created the system that Wall Street uses to profit.  So Occupy Wall Street should move to DC and Occupy the Federal Reserve on the way. 

Once again, the latest fire and brimstone sermon by Marc Faber is absolutely spot on, starting and ending with his "policy" recommendation for what the US needs: "I will tell you what the US needs.  The US needs a Lee Kwan Yew who stands in front of the US  and tells them, listen you lazy bugger, now you have to tighten your belts, you have to save more, work more for lower salaries and only through that will we get out of the current dilemma that essentially prevents the economy from growing." No money printing, no extensive protests, no excuses. Of course, this would have to accompany a global overhaul of the system, something Zero Hedge has been advocating since day one, as it is impossible to reform this broken system from within: "The problem i have with the investment universe is that i find it difficult to envision how the US and western Europe can return to healthy sustainable growth without a complete purge of the financial system and some type of catalyst. Something that restores some measure of social cohesion among people;  it could be hyperinflation, a complete credit market collapse, widespread sovereign defaults, civil strife, major military confrontation.”   Alas, in that he is also correct, and as we said back in early 2010, when the current episode of extend and pretend ends and the can kicking exercise finally fails, next up is war.

Anyone trading gold and silver most likely had a heartattack this morning. Of that subset, anyone who survived and traded with conviction made a killing, following an impressive surge in both metals, which saw silver soar from $26 all the way back to $30, after it was made clear that there was no behind the scenes liquidation of the metal but merely more piggybacked margin hikes this time out of China as was first reported by Zero Hedge. Another factor that helped was Marc Faber's appearance on CNBC earlier, who said that gold is now "quite oversold" and that he would be adding to the yellow metal in the "next two days." In retrospect, he should have been adding today to his existing holdings. However, since he already has 25% in gold, he is forgiven. Mutual funds which, however, have about 1% in gold, are not.

In his inimitable manner, Marc Faber describes to ThomsonReuters why it is time for Greece to leave the common currency, claim bankruptcy, and allow its citizens to live decently even if European leaders (and bankers) have to suffer. Furthermore, he reflects on how the stock market sell-off indicates real concerns about the global economy and in an unusual moment for the author of the Gloom, Boom, and Doom report, believes the Fed was right (but only in so much as they limited the scope of Operation Twist).

Marc Faber was on Bloomberg TV dispensing his traditional sarcastic and sardonic wit in copious quantities. Among the traditional topics touched upon are stocks and specifically trading ranges, "I think a lot of people will say the markets formed a double low and we have some technical indicators that are going to turn positive, so we could rally around 1,250, but as I said before, for me, we reached a high on May 2, 2011. 1,370 on the S&P--that we will not go through", on Operation Twist part 1 (already announced) and part 2 (coming): "To some extent we are in midst of QE3 already, because by announcing the Fed will keep zero interest rates until the middle of 2013, they basically encourage financial institutions to borrow short-term and to buy 10-year Treasuries" on a contrarian outlook on stocks: "I am the greatest bear on earth, but if you compare Treasury bond yields and equities, equities look reasonably attractive", on why Insider "buying" just as we have said repeatedly, is far too much ado about nothing: "Compared to all the selling in the last six months the buying is relatively muted" and lastly, like a gracious loser, Faber admits he was wrong and Rosenberg was right "David Rosenberg was right and I was wrong. The 30-Year has not made a new low.  The low in December 2008 was 2.53%.  Now we're around 3.4%"... although with a caveat: "Basically we have an artificial market." Alas, no strategic observations on what particular precious metal one's girlfriend would appreciate the most in the current gold-platinum parity environment.

In a Bloomberg TV interview following today's quixotic "QE3/non-QE3 announcement, which is Operation Twist 2, but not LSAP, and ushers in economic recession, even as it sends risk assets soaring, and somehow pushes the 2 Year a whopping 20 bps tighter so buy,buy, buy" and is really very much ado about nothing, the always outspoken Marc Faber had some very choice words about life, the universe and especially the residents of the Marriner Eccles building. While there still appears to be some confusions as to whether today's Fed decision to peg rates at zero for 2 years is QE3 or not, Faber believes that the decision to not enact more Large Scale Asset Purchases is "the right thing" although when it comes to the market, it "is more likely to move still lower. We are very oversold. We can have a rebound like we did today, maybe we'll have a rebound next week or so, but in general I think we will test the July lows of last year, the S&P at 1,010.  After that, probably we'll get probably a QE3 announcement." Naturally, Faber does not think gold is in a bubble, and as to what one can do with gold, his response is that "you give your girlfriend copper rings and I give them gold rings and I keep them longer." Indeed, no bubble there. Last but not least is his suggestion what the Fed should do: "The best [the Fed] could do for markets would be to collectively resign." Precisely, which is why it will never happen.