Why US Dollar got stronger even with money printing

Well, why did the dollar strengthen amidst the fact that the US has printed money? Well, there are some reasons. 

First of all, maybe the US dollar is not the ugliest among the several sisters, and two, because of the increase in oil production in the United States, the trade deficit has narrowed, and so the dollar can be strong for a while. I don’t think it will last, but the consensus is that the dollar is the strongest currency around. And these other countries, say if Thailand or Singapore or Indonesia would start to print money, then they would weaken their currencies, or that would be the perception.

Anything is possible in Stock market

After 2000, the Nasdaq dropped more than 70 per cent, then the US housing market collapsed for the first time after the Second World War. Never before in the US had housing prices collapsed as it happened in 2007, 2008, and 2009. 

Home prices dropped more than 50 per cent in some of the US markets. And in 2008, oil prices went up to $147 a barrel but within six months it dropped by $32 a barrel in December.

All I want to tell you is that we had a stock market crash in 2007 and 2008 when the Dow Jones dropped by 50 per cent but many financial stocks dropped 90 per cent to 100 per cent because banks had gone bankrupt. When someone tells me markets can't go down, it's ridiculous. Of course, they can go down.

Oil prices have gone down, most commodity prices have fallen 40-50 per cent from their highs. In some markets in Asia, real estate prices have also weakened considerably. Why can't equity markets also drop by 30-40 per cent? 

I would like to see equities down 40 per cent. Then, I would say the stocks are reasonably valued.

Marc Faber on what happens if Greece exits EU

The Greece thing is being swept under the carpet. The problems had begun early on and by 2010 the credit outstanding was so large that it would have been very damaging for the banking system in Europe in case they would have written off. But, in my opinion, they should have written off at that time. Greece should have been kicked out of the European Union or some other political solution should have been found at that time. 

Instead, lenders gave more and more money. Greece's economy is not big enough to support $300-billion worth of foreign debt. There is also a geo-political angle to the Greece crisis. The hardliners in the US are very much aware that if Greece leaves the EU, then the Russians will be knocking on the door of Greece or the Chinese will establish naval bases in Greece; remember, Greece is part of the NATO. The Greece issue is more a political thing than economic. 

Economically, it's very clear that Greece will not be able to pay its debts.

India reform expectations may be too high

The problems for India are Indians themselves. The country needs a leader like Narendra Modi, but he needs to implement the reform policies. In my view that has hardly improved because of horrendous politics, bureaucracy and corruption. Reforms may rather disappoint. That's why I said that we are witnessing the beginning of a market correction. The expectations from reforms may meet with disappointment because they have been very high. I don't see foreigners meaningfully increasing  increasing their exposure to India.

India's actual growth is 5 percent rather than 8

The Indian economy is doing slightly better than others. But if you analyse the indicators growth would not be 8 per cent, what the government is claiming. I think the Indian economy is growing maximum 5 per cent per annum. 

Look at the current economic environment, exports are not growing strongly, industrial production in the second half of last year was barely up. Hence, I don't think the economy is growing anywhere near 8 per cent. It may be growing at 5 per cent. But when I compare 5 per cent growth with 0 per cent or 1 per cent growth elsewhere in the world, this 5 per cent growth is very good.