Marc Faber gives his outlook on the economy

 Dr. Doom's interview can be found here.

https://livestream.com/accounts/3182712/events/9317660/player

Marc Faber Talks About Hong Kong

Marc Faber says Hong Kong is a city without anything at all, they import everything: water, oil, food, whisky, appliances. They get their money by trading.

Marc Faber buys platinum

Marc Faber said if he would buy one thing, it would be platinum.

Marc Faber GSR Interview

Enjoy another session with Dr. Faber.

Sprott Money: Marc Faber

Don't miss this interview with Marc Faber.

Palm Oil: The Investment Thesis

It is no secret that crude oil has been falling hard lately, but a less known fact is that another commodity has fallen with it. Palm oil has been hit hard together with the decline in crude oil prices (see chart below created by Correlation Economics). The correlation between palm oil and crude oil is not so apparent before 2007. It was only when the biodiesel and ethanol industry became important after 2007 that we began to see the emergence of this correlation. When you look closely, the palm oil price moves first, while the crude oil price moves several months later. This can be an important tool for investors to predict what's going to happen with the crude oil price (OIL). But let's focus on palm oil here.

Read the entire analysis here.

Has agriculture found a bottom?

The latest interview with Marc Faber (Barron's) sparked an idea with me. In that interview he said that palm oil was going to do well. The palm oil price is very much correlated with the soybean price and we are seeing a rebound in soybeans at this moment, while palm oil hasn't seen a rebound yet. As a Belgian, the best way for me to invest in this idea is to buy shares of Sipef (SIP). These profitable companies will pay dividends of 2%-4%, way higher than what you get in European bonds and cash.

Currently, the low crude oil price has dragged the palm oil business down with it. Why you say? It's all because of the derivatives complex. But we are seeing price reversals in agriculture at this moment. For example, when we look at the overall agriculture commodity index RJA, it is showing a bottom.

Also, potash prices are finally on the rise. We have seen the first uptick move in over more than 3 years and potash companies have seen rebounds as well. So, plenty ideas for your next investment!

Goldbroker.com Interview with Marc Faber

A new video with Marc Faber to add to the archive.

- Marc holds gold, likes silver, platinum, palladium as currencies.
- Marc expects that the U.S. dollar won't be strong due to further monetary easing from the Fed.
- Doesn't expect Swiss gold initiative to move the market.
- Isn't comfortable in bonds, cash and stocks.

Marc Faber and QE99

Marc says that stocks are crashing because global GDP is slowing down. The U.S. bond market (where yields are falling) is showing that GDP is declining.

Marc Faber Bullish on Gold and Oil Stocks

Marc Faber sees no value in U.S. stocks, is long emerging markets (especially Vietnam). He is bullish on gold/silver and oil stocks. He likes platinum and palladium.

Marc Faber's Predictions

Let's see if Marc Faber's predictions are coming true on his shorts:
Facebook, Veeva Systems, Netflix, Tesla, Twitter.

Facebook rolling over:

Veeva Systems crashing:

Netflix rolling over:

Testla is holding gains:

 Twitter, the worst stock ever:

I must say, Marc Faber is pretty much spot on on his call.

And remember:

NASDAQ

Oh I forgot one, Bitcoin is also crashing...

China Not Doing So Well: Power Consumption Down

This January and February 2014, Chinese power consumption has been declining month over month. I guess the up move has been broken. We could see continued weakness in industrial commodities and emerging markets as predicted by people like Marc Faber. I think it's time to kiss Chinese GDP growth goodbye.

Marc Faber: When China Implodes, This Might Be Bullish For Gold

A very important development is happening today in China.

One after another company in China is defaulting on its debt. Marc Faber quotes: "We have a gigantic credit bubble here in China." Example: Zhejiang Xingrun Real Estate Co real estate developer defaults. Chinese bank defaults.

What this does to the yuan is obvious, the yuan is declining. If it manages to go above 6.2 USD/CNY, you can expect large problems as the China carry trade will halt and many people invested in Chinese structured products will be in the dumps.

Marc Faber confirms this in the next video. He expects Chinese GDP growth to slow 50% from 8% to 4%. You would think that when the yuan drops, Chinese can't buy that much gold anymore, but Marc Faber has another view on this. The yuan could drop and as a result Chinese gold demand could actually go up due to people protecting themselves from inflation (and defaults) in China.

Marc Faber Expects Chaos

This Bloomberg video featuring Marc Faber is pretty known out there, but I still wanted to archive it. 

I especially like his views on the interest rates limits where the market will break. He talks about 3.5% on the 10 year treasury yield, 5% on the 30 year treasury yield and 6% on the 30 year mortgage yields as the breaking point.

Next on I find his comments about the make up of the female interviewer very amusing.

Also notable are his short plays on Facebook, Veeva Systems, Netflix, Tesla, Twitter.

As a final note, Marc doesn't like Bitcoin. 

Marc Faber Recommends Vietnamese Stocks

Remember Marc Faber recommending Vietnam? To go further on the case for investing in Vietnamese stocks in 2014, I wanted to point out several things.

First off, the savings rate in Vietnam is extremely high. We have 28% domestic savings rates and that's always a sign of a great economy. You can't produce and invest without savings.

Second, the inflation rate has come down from 20% in the past to 6% now. This will be great going forward as the dong (Vietnamese currency) will be stable going forward.

Chart 1: Vietnam CPI

To point to a correlation on this blog, we know that the currency valuation is correlated to the trade deficit of a country and indeed, when we look at the trade deficit in Vietnam, we can see that Vietnam recently went into a surplus. This also explains why the dong is so strong lately and why the inflation rate is coming down.

Chart 2: Trade Deficit Vietnam

To read further, go here.

Stock Market Just Became Significantly Overvalued

According to the stock valuation chart, the stock market is now crossing the 115% ratio of total market cap against GNP. Which means we are crossing the border from modestly overvalued into significantly overvalued territory.

If global GDP weakens next year, a drop in the stock market will not be far off.

Stock Valuation Table

In fact, Marc Faber forecasts that the global economy will weaken next year.

And this is also confirmed by the declining GDP growth estimates.

GDP Estimates

Marc Faber Talks About Gold Demand in Asia

Marc Faber talks about gold demand in Asia and has a special interest for platinum.

Marc also says: "Gold miners are the only sector in the market that are very cheap."

Marc Faber In Thailand, Talking About Clowns

Marc Faber at a Thai studio.

Most important sentence: "The Fed has lost control of long term interest rates". That can be seen here. Even with this money printing and expansion of the Federal Reserve's balance sheet, they can't keep interest rates low anymore.

But more importantly, I note that they have also lost control of short term interest rates. As you can see here, the adjustable mortgage rate is edging up, even when they hold the fed funds rate at zero. So at some point the fed funds rate needs to go up. But there is one other solution, going the other way. Let's see if Janet Yellen is going to apply negative interest rates...

Marc Faber's Outlook

Adding this to my Marc Faber Blog Library.

Marc Faber confirming shift from West to East

If you recalled my "the decoupling has started" article. I mentioned that Marc Faber tells us that money will go wherever it wants.

Now Marc confirms himself that the Asian stock market could have a rebound as opposed to the U.S. stock market. The obvious reason be that the Asian stock market has underperformed the U.S. stock market by and large.

He also doesn't anticipate a collapse in the stock market and real estate market because of money printing.