Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Will You Make Money in the New Silver Bull Market ? - 13th Aug 20
Hyper-Deflation Capital Destruction And Gold & Silver - 13th Aug 20
Stock Market Correction Approaching - 13th Aug 20
Silver Took the Stairs to $21 in 2008, Took Escalator to $29 2010. Is Silver on Elevator to 120th floor today? - 13th Aug 20
President Trump Signs Additional COVID Relief – What To Expect from the Markets - 13th Aug 20
Has Gold's Upward Drive Come to an End? - 13th Aug 20
YouTuber Ads Revenue & How to Start a Career on YouTube - 13th Aug 20
Silver Notches Best Month Since 1979 - 12th Aug 20
Silver Shorts Get Squeezed Hard… What’s Next? - 12th Aug 20
A Tale of Two Precious Metal Bulls - 12th Aug 20
Stock Market Melt-Up Continues While Precious Metals Warn of Risks - 12th Aug 20
How Does the Gold Fit the Corona World? - 12th Aug 20
3 (free) ways to ride next big wave in EURUSD, USDJPY, gold, silver and more - 12th Aug 20
A Simple Way to Preserve Your Wealth Amid Uncertainty - 11th Aug 20
Precious Metals Complex Impulse Move : Where Is next Resistance? - 11th Aug 20
Gold Miners Junior Stcks Buying Spree - 11th Aug 20
Has the Fed Let the Inflation Genie Out of the Bottle? - 10th Aug 20
The Strange Food Trend That’s Making Investors Rich - 10th Aug 20
Supply & Demand For Money – The End of Inflation? - 10th Aug 20
Revisiting Our Silver and Gold Predictions – Get Ready For Higher Prices - 10th Aug 20
Storm Clouds Are Gathering for a Major Stock and Commodity Markets Downturn - 10th Aug 20
A 90-Year-Old Stock Market Investment Insight That's Relevant in 2020 - 10th Aug 20
Debt and Dollar Collapse Leading to Potential Stock Market Melt-Up, - 10th Aug 20
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Marc Faber Warns Trump May Destroy US Economy But Clinton Will Destroy the Whole World!

ElectionOracle / US Presidential Election 2016 Mar 18, 2016 - 06:09 PM GMT

By: Bloomberg


Marc Faber, author of the Gloom, Boom & Doom Report, spoke with Mark Barton on Bloomberg Television about the economy and emerging markets.

Faber said the U.S. would not be a sound, well-run economy like Singapore "unless of course the U.S. is run by Mr. Trump. Then the U.S. will improve."

He added, “Given the alternatives, I would vote for Mr. Trump, because he may only destroy the U.S. economy, but Hillary Clinton will destroy the whole world.”

When asked why, he said "Look at her nation-building in the Middle East, how successful that has been.”

MARK BARTON:  Who better to sort through this huge week for monetary policy than Marc Faber, editor and publisher of the "Gloom, Boom, and Doom Report".  He joins us from Zurich.  Marc, good afternoon.  Thanks for joining us today.

  MARC FABER:  Good afternoon.

       BARTON:  Christine Lagarde, as you know, the IMF managing director, has come out today and she has said, the world economy would be worse off without negative interest rates.  (laughter)  I knew you'd laugh.  And she admitted she was being counterfactual.  I suppose your laugh tells me what you think of that comment.

       FABER:  Look, I believe that the intervention with fiscal policies and with monetary policies, in other words, the so-called neo-Keynesian or new Keynesian, that is their excuse.  They will always say, if we hadn't done this and hadn't done that, it would be much worse.  They have no proof for this assertion.  In my view, it would have been better to let the crisis, already the first one in 2000, run its course and prevent the colossal credit bubble that was built up that then led to an even bigger crisis, and now they're doing the same mistake.  They're again adding to credit volumes in the world.  Credit as a percent of the global economy is up very strongly since 2007, in particular, of course, in China, but also in other countries.  And we distinguish between productive credit and unproductive credit.  Productive credit is to build a factory with credit and then hire people and acquire machinery and then produce something, either services or goods.  But most of the credit is now for transfer payments and that is very negative for long term structural economic growth because it allows, actually, the government to become bigger and bigger and to have more regulations, and I can tell you, I'm in the financial sector and I talk to people in the financial sector.  Half the time is nowadays consumed with filling out forms by regulators.

       BARTON:  Marc, how are they going to fight, then, the next crisis?  I mean your prescription would have been more fiscal policy.  That should have played a more active role.  Will we see more publicly funded infrastructure when and if the next crisis hits?

       FABER:  Yes, that's a very good question, because the magicians at central banks, they always come out with a new trick and these negative interest rates that we have today, this is for the first time in recorded human history from the times of Babylon up to today that we have negative interest rates, and it's not going to end well.  That, I can tell you.  But the sequence of how it will not end well, I'm not so sure.  But they still have a lot of ammunition.  What they can do is helicopter money.  In other words, they can send you and Mr. Bloomberg and me and everybody, say a check for $10,000, and that is like throwing gasoline into a fire.  For a while, the fire will grow and expand, and then after, it will again go down, and then you need other doses of helicopter money.  So the next time around, they can send out checks for $20,000 to everybody, and this will be a very popular measure because everybody will get $20,000.  For the rich, it won't mean anything, $20,000 more or less.  But say, for the poor people and for the lower middle class, to get $20,000 a piece will be very desirable.  So they can do a lot of things if they want to, but will it help the economy?  That is the question.  It won't help in the long run.  You cannot grow an economy by just throwing money at people.

       CAROLINE HYDE:  What should they be doing?  What policies would you want to be enacted, Mr. Faber?

       FABER:  I want to tell you, the less policies, the better it would be.  We all learned at school that the free market and the capitalistic system is the best allocator of resources, and now what we have is the worst allocation of resources because it's the government that tells you how these resources are allocated and they continuously expand their interventions, and I can tell you, I started to work in 1970.  In the 70's and early 1980's, central banks actually never came up in discussions.  They have now become like the messiah, and everybody watches what the central banks do and in the end, in my view, they will have, from a long term perspective, no impact whatsoever.  Now can they move markets short term?  Yes, but maybe not in the direction they want to.

       HYDE:  You talk about allocating resources, Mr. Faber.  Allocate my resources for me right now, because I'm looking at the picks that you have and you're saying, get into the dogs of the world, of course, your usual pun.  Brazil.  You're saying get into Brazil, get into Russia.  How are you going to convince me?  I mean, such political turmoil there.

       FABER:  Well, you see these emerging markets like Brazil and Russia, of course they are in recession, whereby Russia is doing better than Brazil, but the valuations have come down very substantially, and if you ask me, Marc, where should I allocate my funds today in the U.S. stock market, which is essentially very highly priced by any measure, priced to sales, priced to earnings, and so forth.  Market cap to GDP, the U.S. market doesn't come out favorable.  Now, the emerging markets, they have corrected significantly, some since 2006, and some since 2011, and I would say they are relatively attractive, so if I have to invest money today and I'm investing all the time money, because I have a cash flow, I invest in emerging economies.  You can buy the Singapore stock market with a four percent dividend yield.  Well, Singapore is a relatively sound economy.  It's diversified and it's well run, unlike the U.S., unless, of course, the U.S. is run by Mr. Trump.  Then the U.S. will improve.

       BARTON:  Are you really a fan of Mr. Trump, Marc?  Do you really believe -- ?

       FABER:  It is all relative.  Given the alternatives, I would vote for Mr. Trump, because he may only destroy the U.S. economy, but Hillary Clinton will destroy the whole world.

       BARTON:  Why will Hillary Clinton destroy the whole world?  What's the evidence?  (laughter)

       FABER:  Look.  Look at her nation building in the Middle East, how successful that has been. 

       HYDE:  But Mr. Faber, I mean, we're seeing from Donald Trump's potential policies that he wants to slow international trade between the United States and other countries.  Surely that's going to be a block upon free markets.

       FABER:  Well, I agree that it is negative if you have restrictions on a free market.  That, I agree entirely.  But you have to equally see that the U.S. has essentially given in on a lot of things that benefit other countries.  If you look at, say, the growth, 2000 to today, which countries have done relatively well?  The emerging markets have done fantastically well.  Their GDP has gone up substantially.  The standards of living have gone up substantially.  They have accumulated large reserves, and so forth.  The U.S. and Europe and Japan, relatively speaking, have been declining, and that, the statistics are visible from industrial production in emerging economies.  It's doubled in the last 12 years.  Global trade, you look at the share of emerging markets, it's gone up.  The developed world, the U.S., Europe, Japan, it's gone down and so forth.  So I think that maybe we have to find a way to have a more balanced approach to global trade.  I'm not saying protectionism, but the more balanced approach that is fair to the developed world.

       HYDE:  Give me another call for me, Mr. Faber.  You're saying at the moment that you like long term U.S. treasuries, but the consensus is for yields to rise.  What do you feel is the beneficial trade there in terms of, you're saying relatively speaking, getting to long term U.S. debt?  Why?

       FABER:  Sorry, I didn't get the question.

       HYDE:  Bonds, U.S. bonds.  Where would you be allocating there?  Give me some more tips on your resources.

       FABER:  Yes.  Actually, I still hold U.S. treasuries.  They did very well until about two weeks ago and since then they sold off.  I sold some trading positions but I'm looking back to buy some of them because I believe that eventually, Miss Yellen will also introduce negative interest rates.  Don't forget, in 2009, she said, publicly, if it were possible to introduce negative interest rates, I would be voting for that.  So I believe that there is a chance that in the U.S., they'll do the same as elsewhere, as in Japan and as in Europe.

       HYDE:  Marc Faber, always -- an opinionated man.  Thank you very much indeed, giving us some of your views.  That's negative rates next for the U.S. as well, it seems.  Marc Faber, editor and publisher of the "Gloom, Boom, and Doom Report".

**CREDIT: Bloomberg Television**

Copyright © 2016 Bloomberg - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Bloomberg Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules