Monday, March 18, 2019

Marc Faber buys Bitcoin

After a conversation with @wences (CEO of @xapo), the most well-known Swiss financial market expert Marc Faber has invested in Bitcoin.

According to Dr Faber, “I was tempted to purchase Bitcoin when it was available for $200. But I held myself from purchasing something that I didn’t fully understand.”

One of his reasoning to buy Bitcoin is so he could try to better understand how it worked. Also Marc Faber says Bitcoin prices at $3000 is much more attractive than it was at $20,000.

Monday, March 4, 2019

US political situation is very bad

Marc Faber on disinformation during stock market downturns and on US politics.

Well, I think there is a lot of disinformation, and usually when stocks go down, some fraud comes to the surface. And I expect it to happen, and I mean in a major way. Whether the fraud is related to some corporation, which I think is quite likely, or whether it's related to the fraud that is going on in the pension fund system, where pension funds are grossly underfunded, and, in the future, will either have to increase contributions or reduce distributions. I think these are items that could happen. 

Secondly, the public may start to lose faith in the system because of the political situation. I think the political situation in the U.S. is very bad, and if you read about what has been happening at the FBI, the CIA in Washington, you have to scratch your head whether that is all possible in a system that is supposedly functioning. It's like Watergate, but actually magnified. So, I think there is a possibility that investing public loses interest in financial assets. 

Tuesday, February 19, 2019

Physical precious metals far superior to Cryptos as a Safe Haven

Marc Faber on whether Gold and Crypto currencies should be considered a safe haven....

I don't think that cryptos are safe. Now they may move up and they may move down but I, as an investor for the ultimate crisis, I prefer to be in physical precious metals, gold, silver, platinum.

I think, eventually, these precious metals will come back into the investment portfolios of major institutions and individuals. The major institutions of the world, they hold practically no gold. They have more money in Apple, they have more money in Amazon, than, say, in gold. And I think that will change over time, but I don't know whether it will be tomorrow or in three years’ time, but my view would be that if you really look at the financial situation, the unfunded liabilities, the government deficit, the inflated asset prices, the conclusion is central banks will have to continue to print money, otherwise the system collapses. That, in my opinion, will boost precious metals prices.

-Via Money Metals podcast

Tuesday, February 12, 2019

Both US and China will lose in a Trade War

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Wednesday, February 6, 2019

The most popular form of Taxation is ..............

Marc Faber is out with his February 2019 Monthly Commentary. He talks about the various taxation policies proposed in the US.  Via Gloomboomdoom

Thanks to expansionary monetary policies, US, household net worth has soared over the last twenty or so years.

However, if we look at which wealth group did well and which wealth group lagged behind, we find that the wealthiest of US households reaped all the gains in household wealth. Depressing is the fact that according to the Fed’s own statistics, the median net worth for the bottom 50% net worth group actually fell after 2006.

Given the rise in income and wealth inequality, which was caused mostly because of “money printing,” it is not surprising that the call by politicians for some kind of wealth tax for high income and high net-asset holders is gaining popularity.

I am bringing up these facts because it is quite evident that in future every democratic candidate will call for some tax on the wealthiest income recipients and asset holders. So even if wealthy Americans despise Mr. Trump they may have no other option but to vote for him if asset preservation is the objective.

Personally, I am certain that within a few years we shall have some sort of wealth tax for the highest wealth owners and income recipients in most, if not all Western democracies.

More so, if social-democratic candidates want to take your money and redistribute it to the people who keep them in power there will indeed be more government spending that they can’t afford and there will be more bureaucracy, which will depress economic growth and bring along even more central planning. Equally, a socialist could argue (and I would have to agree) that the elite took money from 90% of the population by having the Fed and other central banks pursue monetary policies that lifted most asset prices and increased wealth and income inequality grotesquely.

I suppose that from an investment strategy point of view, more socialistic US policies mean that investors should reduce positions in the US assets and specifically in US equities, which seem to have an extremely high valuation relative to the rest of the world.

With respect to taxes, I smile at Sir Thomas White’s words who opined that, “In such experience as I have had with taxation – and it has been considerable – there is only one tax that is popular, and that is the tax that is on the other fellow.”

Monday, January 28, 2019

Marc Faber's 10 year economic outlook

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Topics discussed
- It will end in a Debt default or debt forgiveness. It will end in a disaster.

- There is No such thing as a free lunch

- Asset prices have inflated. If you went to Toronto or Vancouver 50 years ago and bought a house, and you looked at the price now, you would say it is inflated.

- Affordability issues for young people to buy certain assets. 

- Wealth inequality and potential social issues.

Wednesday, January 9, 2019

January 2019 Monthly Market Commentary

Marc Faber has posted his January 2019 Monthly Market commentary. See below for the summary via GloomBoomDoom.

At the beginning of this report I am presenting two views of China: one is by China basher Patrick J. Buchanan and the other by my friend Jay Chen who provides us with pictures that contradict most of Buchanan's views.

Concerning asset markets (including stocks, corporate bonds and real estate) the BIG QUESTION that is on every investor’s mind is whether the headwinds for asset prices we saw in the last three months of 2018 will only be of short term duration (brief correction in an ongoing bull market for asset prices) or of a more serious nature, which would imply that what we saw recently was only the first phase of a prolonged asset price downturn that would also be accompanied by a global recession.

I am quoting the views of three friends of mine who share similar views.

Mark Whitmore, CEO of Whitmore Capital Management recently concluded his letter to investors by saying that, "I think the tumult we have seen in financial markets in the 4Q 2018 is but a preview of things to come. Yes, there will be violent countertrend rallies in which the market will attempt to lure investors back in. We saw that as the previous bubbles burst over the last couple of decades. But value-conscious investors who stood on the sidelines patiently waiting for markets to be rid of speculative excesses avoided being duped by these bear-market traps….. of far greater import, I remain convinced that it is all but inevitable that markets will be going much lower in the future."

Alan Newman who is the editor of Cross Currents noted on December 26 that, “Our Nasdaq Climax indicator is ….. shocking. Nasdaq has flipped from bull market to bear market (stocks were down close to 11% last week), yet we still do not see even the slightest sign of panic. Days in which Up/Down volume reach a ratio of 1:9 (or worse) have typically been thought to be solid evidence of capitulation. To date, there has not been any such instance since May 17, 2017."

Finally, Michael Lewitt who publishes the excellent The Credit Strategist comments about credit conditions and specifically about the recent sell-off in the leveraged loan market. Under The Unthinking Consensus he bemoans the fact that publications like Barron's and the Wall Street Journal offer less insight than the week before, something it shares with the rest of the mainstream financial media, "which is one reason why investors were so ill-prepared for the bear market unfolding before their eyes."

I wish my readers a Happy New Year. Remember that just because we had for close to 40 years "asset inflation" it is unlikely that things will stay the way they were. [Bertolt Brecht: "Because things are the way they are, things will not stay the way they are.”]

Friday, January 4, 2019

I wouldnt be surprised if S&P500 dropped to 1500 or so

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