“If Brexit is used as an excuse, the central banks will print more money, QE4 in the U.S. is on the way and the depreciation in the purchasing power of currencies will continue,” warned a vociferous Marc Faber said in a Bloomberg TV interview today from Hong Kong.
"In that situation, you want to own some gold," he explained, carefully noting that central planners will be forced into this move because, despite all their extreme experimentation, "global growth has contracted, in other words, growth rates have been reduced and many countries are in recession already."
This has nothing to do with Brexit, stated the Gloom, Boom & Doom Report editor, "Brexit is actually not about an end of globalization. On the contrary, it’s about people that rebel against the arrogant elite in the financial centers."
On supporting "Leave" in the Brexit campaign...
Yes. Well, first of all, I'm Swiss, so I'm the wrong person to ask, you see. We have a constitution, and already in 1291, in other words, in the 13th century, we swore that we would not pay taxes to a foreign leader and we would never accept foreign judges, and that's basically what European countries have done. They transferred their sovereignty to essentially unelected bureaucrats in Brussels.
And I believe that countries function better if they're small countries. I always believed the U.S. would be a better functioning economy if it would consist of say 50 different states. There's just one federal government running the place.
On the stock market's rebound post-Brexit...
Basically, we became very oversold the day before yesterday, and now we are rebounding. I don't think markets, by and large, will make new highs. But you understand, we have to be very careful when we talk about markets because there's so many different markets. So this year, for instance in dollar terms, Brazil us up 30 percent. The S&P is still down. Thailand is up close to 15 percent this year, Vietnam, 9 percent, Indonesia, the Philippines, 11 percent. So depending on which market you're talking, the performance is very different. The bond market over the last twelve months and this year has been very strong. Gold share market, all the gold shares are up 100 percent or more over the last 6 months, so we have to look at different sectors and we'll have to look at different countries.
On Global growth...
Well, global growth has contracted -- in other words, the growth rates have been reduced, and many countries are in recession already. That has nothing at all to do with Brexit.
The global economy has begun to slow down 18 months ago. The U.S. economy began to slow down at the end of 2014. That's why bonds have been so strong in 2015, because the bonds market knew the economy was weakening.
On what happens next?
[A UK recession] is possible -- but it could be possible that it would be in recession without Brexit, in other words, if they had remained in the E.U. Growth has slowed down everywhere and I'm telling you why. Basically, the growth that we had post-2009 has been very artificial. It's been driven by money printing by central bankers that lifted asset prices. And when asset prices, stocks and bonds and real estate, goes up, there's the so-called trickle down effect. And Brexit is actually not about an end of globalization. Quite on the contrary. It's about people that rebel against the arrogant elite in the financial centers.
Because if you go to England, London is doing well. The financial sector in London is doing well. The asset economy is doing well. But ordinary people aren't doing well. It's the same in Hong Kong. Why did we have demonstrations here? The people that owned the assets, like you and me, were doing well, for people that work at Bloomberg. But ordinary people, they're not doing well. The cost of living have gone up. Look at the rents and the rest. So there is dissatisfaction with the system, and this is what the vote is about. And I believe it would be better if the arrogant bureaucracy in Brussels would be contained and reduced in size.