Tuesday, January 28, 2014

Marc Faber reflects on bubbles and gold

Marc Faber speaks on the importance of the Chinese economy to emerging economies, and specially to its neighboring Asian countries:

"To clarify a point about the size of the U.S. economy and its importance in the world, China imported 12% of global metals consumed in 2000. Now it imports up to 47% a year. China's growth has a major impact on emerging economies. The U.S. has no impact because it is a service economy. China has gone from sending less than a million travelers overseas in the mid-1980s to 100 million now. You hardly see American tourists in Asia any more."

Marc Faber on finding investment ideas currently and why Gold could go higher:

"All asset prices are in the sky, whether it is Picassos or Warhols or the flat that Steve Cohen is trying to sell. We are in a bubble. We are the bubble. It is only a question of which asset is in a lesser bubble. The U.S. is expensive, compared to the European market and especially emerging economies. Based on the level of today's secular adjusted P/E, returns in the next seven to 10 years will be minor, if not meaningless. The Mexican stock market went up 343 times between 1984 and '87 because of money-printing. Then the currency collapsed. The dollar can't collapse, so gold will come to the forefront."