central banks

James Rickards: Gold Other Money That Renders Central Bank Power ‘Meaningless’

The “Quote For The Week” runner-up. From American investment banker, risk manager, attorney, and financial commentator James Rickards, in a recent interview with Schiff Gold’s Albert K. Lu:

I actually think of gold as money. Money is different from an investment or a commodity, so, is gold a commodity? Is it an investment? Is it money? Well, it depends a little bit. Like a chameleon, it changes color. I think of it as money. But I think that’s why there is such bitter opposition, and so many really canards and made-up stories, anti-gold. These come from the PhDs. Whoever controls money controls the world. You control wealth, you control politics; you control who wins and who loses. It’s a very powerful thing to control.

Who controls money today? The answer is the central banks, and those are all PhDs, they come from MIT, Harvard, Chicago, Stanford, just a really small number of universities. They all know each other. It’s a club. Well, if you were in this PhD club that controls the central banks, you wouldn’t want people to even think about gold. You wouldn’t want them to talk about gold, because gold is the competition. Gold is the other money that can render their power meaningless. And so they perpetuate these myths about gold. Unfortunately, a lot of students, a lot of journalists, a lot of everyday citizens follow the leader, follow these PhDs without ever examining the assumptions…

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on information found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

Rickard’s new book…

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Rich Dad Author Robert Kiyosaki: 2016 Market Meltdown ‘Right On Schedule’

The last time I blogged about Robert Kiyosaki, the American entrepreneur, educator, investor, and author of The New York Times best-selling book Rich Dad Poor Dad talked about precious metals in a January 27, 2016, GoldSeek.com Radio interview. From his exchange with host Chris Waltzek:

WALTZEK: People taking a longer-term perspective, picking up some precious metals. You get that diversification. You can sleep a little more soundly at night. And you also know that you’re getting silver at 66 percent off, gold 40-45 percent off the highs. So where’s the risk there?
KIYOSAKI: The risk is not having it. And that’s why I’m laughing about Saturday Night Live and I can’t tell Fox from Saturday Night Live because those guys are a bunch of cartoons up there now. And those are the guys you’re going to count on for your economy? Give me a break. I mean, right now I trust in gold and I trust in silver. I don’t trust the stock market. I don’t trust the Fed. I don’t trust our leaders. I don’t trust the EU to not come apart. You have Puerto Rico in serious trouble. I mean how many other things have you got out there? And you look at the national debt- it’s now $20 trillion. If you want to believe Saturday Night Live characters then you just keep believing. But I’d rather have gold and silver.

The author of the recently-released Second Chance: for Your Money, Your Life and Our World also informed listeners he got out of stocks “fully” last March.

Last week, I spotted a piece about Kiyosaki on MarketWatch.com. Barbara Kollmeyer reported on March 23:

Fourteen years ago, the author of a series of popular personal-finance books predicted that 2016 would bring about the worst market crash in history, damaging the financial dreams of millions of baby boomers just as they started to depend on that money to fund retirement.

Broader U.S. stock markets are recovering from the worst 10-day start to a year on record. But Robert Kiyosaki- who made that 2016 forecast in the 2002 book “Rich Dad’s Prophecy” – says the meltdown is under way, and there’s little investors can do but buy gold or silver and hope the Federal Reserve slows the slide.

Kiyosaki is convinced: The pullback he predicted is happening.

“We’re right on schedule,” he said in a recent interview with MarketWatch…

(Editor’s note: Bold added for emphasis)

Kollmeyer added later:

Kiyosaki told MarketWatch that the combination of demographics and global economic weakness makes the next crash inevitable — but the Fed could stave it off with another round of quantitative easing, which might stimulate the economy…

“The big question [whether] we do ‘QE4,’” said Kiyosaki. “If we do, the stock market will come roaring back, but it’s not rocket science. If we stop printing money, it crashes; if we print money, it goes up. But, eventually, it’s all going to come down.”

(Editor’s note: Bold added for emphasis)

To combat the crash, Kiyoski still places his trust in gold and silver, among other things. From the piece:

He thinks investors should own some gold or silver, based on the view that central banks will just have to print money to get out of the next crisis and precious metals are often deployed as a perceived hedge against inflation. Some investors, meanwhile, might look for investments geared toward income, such as rent payments or dividends, rather than appreciation.

“If you know what you’re doing and are investing for cash flow, baby boomers — or any investors — may see some gains,” he said. “But for those whose wealth is tied up in the [equity] markets, it’s more like gambling than investing.”

(Editor’s note: Bold added for emphasis)

An excellent interview of Kiyosaki by MarketWatch, which you can read in its entirety over on their website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Jim Rogers: ‘I Expect The American Economy To Be In Recession Sometime In The Next Year Or Two

Well-known investor, author, and financial commentator Jim Rogers was recently interviewed by the Nikkei Asian Review (Japan) about the global economy. Assessing its health, the former investing partner of George Soros warned on the Review’s website on March 20:

I am not optimistic about the global economy for the next couple of years. Japan is already in recession, some parts of Europe are suffering, some parts of America are suffering and that’s going to get worse, in my view, because there is nothing to make the world get better.

In America, we’ve had seven years since our last recession. That is unusual because in America, normally every four to seven years, throughout history, we have had an economic slowdown. So it’s overdue. It doesn’t have to end in seven years, but we have many excesses which have taken place in the world economy, caused by very low interest rates. And the American central bank is making many, many mistakes by having interest rates so low and by printing so much money. And then the Japanese central bank and the European Central Bank, and the British central bank, all did the same thing. So we’ve had an artificial situation based on printed money and huge amounts of debt. [The Federal Reserve’s] balance sheet was $800 billion in 2008. Now it is nearly $5 trillion. I expect the American economy to be in recession sometime in the next year or two.

(Editor’s note: Bold added for emphasis)

Survival And Prosperity readers may remember earlier this month I quoted a March 4, 2016, Bloomberg.com piece where it was reported:

The famous investor said that there was a 100 percent probability that the U.S. economy would be in a downturn within one year

(Editor’s note: Bold added for emphasis)

In the short-but-insightful Nikkei Asian Review interview conducted by Hisashi Tsutsui, the Singapore-based Rogers revealed where he would invest given current circumstances, which you can read all about on the publication’s website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Marc Faber Shares Investment Strategy To Combat The ‘Mad Professors’

Despite being out of the loop for a week due to the flu, I see the “crash prophets” are still running at full-throttle. I just got finished listening to an interview of Swiss-born investment advisor/money manager Marc Faber that was released on the King World News- Broadcast February 20. When asked by Eric King about his thoughts on gold, the publisher of the monthly investment newsletter The Gloom Boom & Doom Report told listeners:

In this environment, you just don’t know how far the mad professors will go. Looking forward, we all don’t know how the world will look like in five years’ time, ten years’ time. I would hold some real estate. I would hold some stocks. I would hold some bonds and cash. And some precious metals. I happen to believe that the precious metals have probably bottomed out, but I cannot send you a guarantee for that. I don’t know, for sure.

“Dr. Doom,” as the financial news media likes to call him, added this prediction for 2016:

I believe the stock markets around the world will end the year lower. But it will depend on how much money the central bankers will print.

On February 18, Lucy Meakin, Ranheetha Pakiam, and Eddie Van Der Walt reported on the Bloomberg website:

“Leave a million dollars with a bank, and in a year, you get only something like $990,000 back,” Marc Faber, the publisher of the Gloom, Boom & Doom Report, said by phone. “I would rather want to own some solid currency, in other words gold.”

Dr. Faber talked more about the yellow metal- and his outlook for the U.S. economy and equities. From the piece:

It’s more tempting to own a non-yielding asset such as gold when returns on other investments are hard to find, according to Faber. He said in December that the U.S. is at the start of a recession and its stocks would fall this year.

Getting back to that King World News show, Faber also directed listeners of explore a particular type of stock (13:15) and area of real estate (18:58) to counter the “mad professors.” A good interview, which you can listen to in its entirety here on the King World News website.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; a qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Source:

Meakin, Lucy, Pakiam, Ranjeetha, Van Der Walt, Eddie. “Gold Bulls Feast as More Central Banks Drive Rates Below Zero.” Bloomberg. 18 Feb. 2016. (http://www.bloomberg.com/news/articles/2016-02-19/gold-bulls-feast-as-more-central-banks-drive-rates-below-zero). 22 Feb. 2016.

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Gold ‘One Of The Best Assets To Own In 2016’?

Gold is making headlines again as interest in the yellow metal picks up due to the recent carnage on Wall Street and other financial concerns. It’s been some time since I’ve checked-up on precious metals, and here are excerpts from two insightful articles I read Wednesday afternoon. Mark Decambre reported on the MarketWatch website today:

Who would have guessed that gold would be one of the best assets to own in 2016? So far, that has been the case- while the U.S. stock market has rung up its worst start to a year and a miasma of economic gloom continues to roll across much of the world.

Gold is on a hot streak, after shrugging off the Federal Reserve’s interest-rate increase back in December that should have spelled doom for prices. Instead, it’s on track to gain 5.4% so far in 2016, FactSet data show. True, it’s still early in the year, but if gold were to just tread water for the next 11 months, it would mark the best annual gain in four years.

By comparison, the S&P 500 is down 6.4%, the Dow Jones Industrial Average has slumped 7% and the Nasdaq Composite has skidded a hefty 9%…

(Editor’s note: Bold added for emphasis)

Decambre added that silver is up 5 percent, platinum is down 1 percent, and palladium is also down 11 percent so far in 2016.

Down the stretch, Thomson Reuters GFMS analysts predict gold could end up having a good year. Jan Harvey reported Tuesday on the Reuters website:

Gold demand fell 2 percent last year, GFMS analysts at Thomson Reuters said on Tuesday, but is set to recover in 2016 as U.S. rate hikes arrive more slowly than expected, while concerns over economic growth and yuan weakness stimulate Chinese buying.

In 2016 GFMS sees gold prices, currently near $1,100 an ounce, recovering to above $1,200 an ounce by year-end, and averaging $1,164 an ounce in the full year. Gold demand is expected to grow by 5 percent this year, it said…

Mine supply is set to keep falling after posting its largest quarterly decline since 2008 in the last quarter, while lower prices are expected to stimulate retail demand, and central bank buying will remain supportive…

(Editor’s note: Bold added for emphasis)

Speaking of “mine supply,” I’m hearing more talk of “peak gold” these days, which is something I’ll have to look into.

Good news for gold these days. Which means mainstream (financial) media outlets will start beating up the yellow metal again shortly.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Sources:

Decambre, Mark. “Gold has been one of Wall Street’s best bets early in 2016.” MarketWatch. 27 Jan. 2016. (http://www.marketwatch.com/story/gold-bugs-have-been-crushing-it-in-2016-relative-to-stock-markets-2016-01-27). 27 Jan. 2016.

Harvey, Jan. “Gold eyes 2016 rebound on slower rate hikes, Chinese demand – GFMS.” Reuters. 26 Jan. 2017. (http://www.reuters.com/article/us-gfms-gold-idUSKCN0V411O). 27 Jan. 2017.

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Latest U.S. Recession Forecasts

To wrap up Tuesday’s focus on financial matters, I thought I’d take a look at the latest recession forecasts being made on various mainstream media outlets. From a Reuters.com article last Friday:

A recession is typically defined as two consecutive quarters of economic contraction. The U.S. economy ground to a virtual standstill in the fourth quarter of last year, according to many estimates, and the manufacturing sector is already in recession.

Earlier this week, economists at Citi said the risk of a global recession was rising, Morgan Stanley put the probability at 20 percent in a worst case scenario, and French bank Societe Generale said it was 10 percent and rising

(Editor’s note: Bold added for emphasis)

I’ll get back to Citi’s eye-opening forecast in just a minute. From a different Reuters piece that was also published on January 22:

World stock market losses are approaching $8 trillion so far this year and investors last week poured the most money into government bond funds in a year, suggesting they fear the global economy could tip into recession, Bank of America/Merrill Lynch said on Friday.

The bank’s U.S. economists also said on Friday that the likelihood of the world’s largest economy entering a recession in the coming year has risen to 20 percent from 15 on percent…

(Editor’s note: Bold added for emphasis)

From Bloomberg.com Sunday:

The median probability for a U.S. recession in the next 12 months stood at 19 percent in this month’s Bloomberg survey of economists. While that’s the highest since February 2013, the median response of 36 economists put the likeliest year for a contraction as 2018, unchanged from the previous two months…

(Editor’s note: Bold added for emphasis)

Finally, there’s this from the CNNMoney website this afternoon:

America’s economy is not in a recession, but fears of one are growing fast.

The chance of the U.S. sinking into a full-blown recession now stand at 18%, according to a CNNMoney survey of economists this week.

That’s nearly double what the nation’s top economic policymaker predicted only a month ago.

Federal Reserve chair Janet Yellen put the probability of a recession in 2016 at about 10% during her December press conference after the Fed raised interest rates for the first time in years.

She has said repeatedly that she thinks a recession is not on the horizon…

Citigroup predicted a 65% chance of a U.S. recession, a call that was so eyebrow raising that Yellen herself felt the need to swat it away, calling it “absolutely” wrong…

(Editor’s note: Bold added for emphasis)

To recap all those predictions regarding the chance for recession in 2016:

• Janet Yellen- 10%
• Societe Generale- 10% and rising
• CNNMoney survey of economists- 18%
• Bloomberg survey economists- 19%
• Morgan Stanley- 20% in a worst-case scenario
• Bank of America/Merrill Lynch- 20%
• Citi- 65%

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

“Nearly $8T wiped off world stocks in Jan, US recession chances rising: BAML.” Reuters. 22 Jan. 2016. (http://www.cnbc.com/2016/01/22/probability-of-us-recession-rises-to-20-pct-baml.html). 26 Jan. 2016.

Leong, Richard. “Morgan Stanley still sees 20 percent chance of U.S. recession.” Reuters. 22 Jan. 2016. (http://www.reuters.com/article/us-usa-economy-morganstanley-idUSKCN0V01ZZ). 26 Jan. 2016.

Jackson, Anna-Louise and Wang, Lu. “Worried About a U.S. Recession? You Shouldn’t Be.” Bloomberg. 24 Jan. 2016. (http://www.bloomberg.com/news/articles/2016-01-25/deeper-dive-into-market-monsoon-shows-recession-alert-on-mute). 26 Jan. 2016.

Long, Heather. “U.S. recession cries get louder.” CNNMoney. 26 Jan. 2016. (http://money.cnn.com/2016/01/26/news/economy/us-economy-recession-chance/). 26 Jan. 2016.

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Tuesday, January 26th, 2016 Banking, Federal Reserve, Recession No Comments

Former BIS Chief Economist William White: ‘Situation Is Worse Than It Was In 2007’

For over a decade now, I’ve read an enormous amount of material concerning developments in the global economy/larger financial system. Particularly as it pertains to the health of that system. And not too many articles have grabbed my attention during that time like the one penned by The Telegraph’s (UK) international business editor Ambrose Evans-Pritchard on their website last week. From his January 19 article:

The global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, a leading monetary theorist has warned.

“The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up,” said William White, the Swiss-based chairman of the OECD’s review committee and former chief economist of the Bank for International Settlements (BIS).

“Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief,” he said…

“The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly”

The European banking system may have to be recapitalized on a scale yet unimagined, and new “bail-in” rules mean that any deposit holder above the guarantee of €100,000 will have to help pay for it.

The warnings have special resonance since Mr White was one of the very few voices in the central banking fraternity who stated loudly and clearly between 2005 and 2008 that Western finance was riding for a fall, and that the global economy was susceptible to a violent crisis…

(Editor’s note: Bold added for emphasis)

In case some readers didn’t know, the Bank of International Settlements, or BIS, is basically the bank of central banks. And White was their chief economist.

He also commented on the Federal Reserve’s interest rate quagmire. From the piece:

Mr White said the Fed is now in a horrible quandary as it tries to extract itself from QE and right the ship again. “It is a debt trap. Things are so bad that there is no right answer. If they raise rates it’ll be nasty. If they don’t raise rates, it just makes matters worse,” he said…

(Editor’s note: Bold added for emphasis)

“Crash prophet” Peter Schiff has been harping on the rate trap for some time now.

It’s one thing when someone like Schiff points out fissures in the system. And it’s another when an “insider” like William White sounds the alarm.

You can read Evans-Pritchard’s disturbing article in its entirety here on The Telegraph website.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Jeremy Grantham: ‘It May Well Be Necessary To Our Survival That We Become More Realistic’

Continuing yesterday’s discussion on investing, last night I finally got the chance to read the latest quarterly investment letter from “crash prophet” Jeremy Grantham, the British-born investment strategist and founder/former chairman of Grantham, Mayo, Van Otterloo & Co. (currently oversees $104 billion in client assets). Here’s what December’s installment (covering the third quarter of 2015) consisted of. From “Give Me Only Good News!”:

I have noticed how hard it is to effectively pass on a warning for the same reason: No one wants to hear this bad news. So a while ago I came up with a list of propositions that are widely accepted by an educated business audience. They are widely accepted but totally wrong. It is my attempt to bring home how extreme is our preference for good news over accurate news. When you have run through this list you may be a little more aware of how dangerous our wishful thinking can be in investing and in the much more important fields of resource (especially food) limitations and the potentially life-threatening risks of climate damage. Wishful thinking and denial of unpleasant facts are simply not survival characteristics…

(Editor’s note: Bold added for emphasis)

Grantham discussed those “propositions” and went on to conclude:

This is more or less the best I can do to prove the point. We in the U.S. have a broad and heavy bias away from unpleasant data. We are ready to be manipulated by vested interests in finance, economics, and climate change, whose interests might be better served by our believing optimistic stuff “that just ain’t so.” We are dealing today with important issues, one so important that it may affect the long-term viability of our global society and perhaps our species. It may well be necessary to our survival that we become more realistic, more willing to process the unpleasant, and, above all, less easily manipulated through our need for good news

(Editor’s note: Bold added for emphasis)

While an interesting read, I was a little disappointed that Grantham (who’s individual clients have included former U.S. Vice President Dick Cheney and U.S. Secretary of State John Kerry) didn’t talk about the following in his latest letter. From an August 9, 2015, post:

However, Grantham has now offered up a potential timeframe for a “major decline” in equities.

Robin Wigglesworth reported on the Financial Times (UK) website Thursday:

A well-known fund manager who foresaw the Japanese crash, the dotcom bubble and the global financial crisis has predicted that markets will be “ripe for a major decline” some time in 2016, potentially triggering government bankruptcies.

Jeremy Grantham , founder and chief investment strategist of GMO, a $118bn investment house based in Boston, expects the stock market to continue to march higher in the coming year, eventually sucking in retail investors and setting up a serious decline around the time of the US elections in late 2016.

The famously bearish and often prescient money manager said this could trigger a “very different” type of crisis, because many governments had become considerably more indebted and much of the liabilities had shifted to the balance sheets of central banks.

Given that central banks were able to create money to recapitalise themselves, this “could be a crisis we could weather”, Mr Grantham said. “If not, then we’re talking the 1930s, where you have a chain-link of government defaults.”

(Editor’s note: Bold added for emphasis)

And from a May 4, 2015, post about his first quarter 2015 letter:

On the Federal Reserve and asset bubbles, Grantham noted:

In the Greenspan/ Bernanke/Yellen Era, the Fed historically did not stop its asset price pushing until fully-fledged bubbles had occurred, as they did in U.S. growth stocks in 2000 and in U.S. housing in 2006. Both of these were in fact stunning three-sigma events, by far the biggest equity bubble and housing bubble in U.S. history. Yellen, like both of her predecessors, has bragged about the Fed’s role in pushing up asset prices in order to get a wealth effect. Thus far, she seems to also share their view on feeling no responsibility to interfere with any asset bubble that may form. For me, recognizing the power of the Fed to move assets (although desperately limited power to boost the economy), it seems logical to assume that absent a major international economic accident, the current Fed is bound and determined to continue stimulating asset prices until we once again have a fully-fledged bubble. And we are not there yet

To remind you, we at GMO still believe that bubble territory for the S&P 500 is about 2250…

(Editor’s note: Bold added for emphasis)

Two things I’m dying to know from Mr. Grantham right now:

1. Does he still expect “the stock market to continue to march higher in the coming year, eventually sucking in retail investors and setting up a serious decline around the time of the US elections in late 2016”?

2. Does he/GMO “still believe that bubble territory for the S&P 500 is about 2250”? The S&P was really marching towards 2,250 for a while before the index went south.

You can read the latest Grantham letter over at the GMO website here (.pdf format).

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Jim Rogers Shares Investing Insights For 2016 And Beyond

Speaking of Singapore, once in a while I come across some terrific interviews of the “crash prophets.” This weekend I read one of well-known investor, author, and financial commentator Jim Rogers. James West, publisher/editor of the Midas Letter (“Emerging Public Company Research and Global Economic Commentary”), spoke to the Singapore-based investor and published the exchange on his newsletter’s website last Tuesday. They talked about everything (at least as it concerns topics I think Survival And Prosperity readers might be interested in). Rogers maintains what’s going on in the financial markets/system these days goes back to the 2008 global economic crisis:

WEST: Jim would you agree that the roughly 8 percent drop in global market indices since the beginning of 2016 is the harbinger of a continuation of the financial crisis that began in 2008?
ROGERS: Oh I know it is. There’s no doubt in my mind. China’s been able to support the world through a period of money printing and low interest rates, and that’s now come to an end cause China’s showing signs of slowing down. People say China’s to blame for all this mess, but China’s just a victim like the rest of us. We’re all victims James, we’re all victims, including American citizens. Our central bank has been a disaster…

Regarding investment advice for 2016, the chairman of Rogers Holdings and Beeland Interests, Inc., shared the following:

WEST: So where should an investor be, going into a 2016 that is so volatile and so fraught with the risk of another major market correction?
ROGERS: Well, who knows. What I have done is I’m short in the U.S. stock market – the nine or ten stocks that never go down – Amazon, Netflix… those things. I am short junk bonds in the U.S., I am long in China – mainly because I have to be long somewhere. So I’m short junk bonds, I’m short the U.S. stock market, I own a lot of U.S. dollars for the reasons I mentioned. That’s mainly where my money is. But who knows if I’ve got it right. I own some other stocks too that I’ve owned for decades…

Rogers provides additional insights into bonds, the U.S. dollar, gold, monetary policy, agriculture, commodities, silver, crude oil, and other topics. Like I said, terrific interview. Not wanting to steal West’s thunder, head on over to the Midas Letter website here to read it all.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; a qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Marc Faber: ‘I Think The Markets Will Still Go Lower’

For the rest of the day, investing will be the focus of discussion here on Survival And Prosperity. Turning to the “crash prophets,” Swiss-born investment advisor/money manager Marc Faber was interviewed by CNBC-TV18’s Surabhi Upadhyay this past weekend. When asked if he still thought U.S. stock prices would end up falling 40 percent, the publisher of the monthly investment newsletter The Gloom Boom & Doom Report replied (from a transcript of their exchange):

What I said is that the market in the US would decline between 20 and 40 percent from the high rates last May, which was on the S&P 2,134.

(Editor’s note: Bold added for emphasis)

After U.S. stocks closed higher Friday for their first positive week in four, “Doctor Doom”- as the financial press likes to call him- warned:

I think the markets will still go lower. What we can have is the difficulties — if you print money, basically something will go up and in the case of the last few years what has gone up meaningfully are stocks but that after 2011, stocks did no longer go up…

(Editor’s note: Bold added for emphasis)

If he’s not bullish on U.S. equities, what is Dr. Faber’s recommending to investors these days? Mark O’Byrne , executive, marketing, and research director at Dublin-based international bullion dealer GoldCore, wrote on their blog last Wednesday:

Marc Faber, editor of the “Gloom, Doom & Boom Report,” has advised investors that now is a good time to invest in gold

Faber says investors would be prudent to diversify into safe haven in gold bullion which has risen 3% this year and is currently at $1,096 an ounce…

Faber favours allocated and segregated coin and bar storage in Singapore.

(Editor’s note: Bold added for emphasis)

Singapore?

Back on May 11, 2015, I blogged about an interview of Dr. Faber by Simon Black over at Sovereign Man, a provider of global financial intelligence and solutions. In the exchange that was uploaded to the Sovereign Man website on May 8, Faber told listeners:

The only currencies that I regard as significantly undervalued at the present time are the precious metals- silver, gold, platinum, palladium. And I would advise any investor to have at least some money in precious metals. The problem is, as a very informed reader of mine said, if precious metals really one day work out- in other words, gold goes to $10,000 an ounce- you can be sure that the government will take it away from you. That is a threat.

As you know in the world- since you are running an organization Sovereign Man- there is a move to curtail freedom, and there is a move to abolish paper money… If I were your listeners and I held gold, if paper money is abandoned or banished, about the last thing you want to hold is gold because it will be taken away as well. So you better close down your accounts at Citi, in my view. Put your money somewhere, anywhere in the world, except in U.S. banks.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; a qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Sources:

“Sensex could fall to 20K; China growing at 2-4%: Marc Faber.” CNBC-TV18. 23 Jan. 2016. (http://www.moneycontrol.com/news/fii-view/sensex-could-fall-to-20k-china-growing-at-2-4-marc-faber_5120561.html). 25 Jan. 2016.

O’Byrne, Mark. “Invest In Gold Now As Stock Market To Crash- Faber.” GoldCore.com. 20 Jan. 2016. (http://www.goldcore.com/us/gold-blog/invest-in-gold-now-as-stock-market-to-crash-faber/). 25 Jan. 2016.

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Survival And Prosperity
Est. 2010, Chicagoland, USA
Christopher E. Hill, Editor

Successor to Boom2Bust.com
"The Most Hated Blog On Wall Street"
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