Thread: Marc Faber Says World Heading for 'Major Inflection Point'

Stocks are cheap and USD is a bargain

be ready for the Gold crash


Marc Faber Says World Heading for `Major Inflection Point' - Bloomberg

Global markets are heading for an “important turning point” as interest rates begin to rise within about three months and the U.S. dollar gains, according to investor Marc Faber.

Investors should buy stocks and sell cash and bonds because governments are continuing to print too much money and may create a new “credit bubble,” Faber, publisher of the Gloom, Boom & Doom report, told reporters during a forum in Seoul today.

“Instead of interest rates going down, they could start to go up, instead of the dollar being weak, it could strengthen,” Faber said. “I’m ultra-bearish on everything, but I believe you’ll be better off owning shares than government bonds.”

The Dollar Index slid 8.5 percent last quarter, the most since June 2002, and dropped 1.3 percent this month after Federal Reserve Chairman Ben S. Bernanke signaled he may add money to the economy. That new supply is reflected in exchange rates, based on how the currency reacted to the last round of so-called quantitative easing, said HSBC Holdings Plc, BNP Paribas SA and Nordea Bank AB. The central banks of Israel and Taiwan raised borrowing costs in the last 15 days.

Faber’s recommendation on stocks is shared by Warren Buffett, the billionaire chairman of Omaha, Nebraska-based Berkshire Hathaway Inc. Investors buying bonds now “are making a mistake,” he said Oct. 5 at Fortune magazine’s Most Powerful Women conference in Washington.

Buffett, Stocks

“It’s quite clear that stocks are cheaper than bonds,” Buffett said. “I can’t imagine anyone having bonds in their portfolio when they can own equities.”

U.S. stock dividends are paying more than government bonds. Ten-year Treasuries yield 5.2 percentage points less than equities of companies in the Standard & Poor’s 500 Index when adjusted for annual inflation, near the most since March 2009.

Faber told investors to abandon U.S. stocks a week before 1987’s so-called Black Monday crash and said in August 2007 that U.S. shares were entering a bear market. The S&P 500 peaked two months later before retreating as much as 57 percent.

Where's the part about the gold crash?

USD gains - here's to hoping he's right

sweet, the missus just hocked a bracelet I gave her 2 years ago to buy a phone. think it made about 15%, but who knows how much the shifty chinese gold merchants scraped.

Originally Posted by Friedclams

Where's the part about the gold crash?

nobody likes gold more then Marc Faber.

butterfly has been wrong about gold and is just jealous that he has lost so much money not buying when i was, about 2 months ago.

people that have no understanding on how the financial markets work will continue to be wrong about gold.

Originally Posted by 9999

sweet, the missus just hocked a bracelet I gave her 2 years ago to buy a phone. think it made about 15%, but who knows how much the shifty chinese gold merchants scraped.

that was sure dumb.

what if she did that 2 years ago ?

God will crash as soon as interests go up, like most commodities, for different technical reasons

Futures and Forwards for example, the majority of Gold related trading, use interest rates in their pricing formula which directly deflate price (like Bonds, something socal can relate to)

When this happens, Gold and other Futures related commodities will deflate at record pace because of the cascading and correlation effects of Futures with their underlying.

Originally Posted by socal

people that have no understanding on how the financial markets work will continue to be wrong about gold.

you can say that again and look at yourself in the mirror

Originally Posted by socal

Originally Posted by Friedclams

Where's the part about the gold crash?

nobody likes gold more then Marc Faber.

butterfly has been wrong about gold and is just jealous that he has lost so much money not buying when i was, about 2 months ago.

people that have no understanding on how the financial markets work will continue to be wrong about gold.

Financial markets are like herds of sheep and Gold has no intrinsic value except as a bolt hole when things are bad.

[quote=Butterfly;1579586]

God will crash as soon as interests go up, like most commodities, for different technical reasons

You need to figure out how a market works. You are implying that gold will go down when interest rates go up. Since interest rates are the inverse of the price of bonds, there will have to be huge outflows of money out of the bond market for interest rates to go up. This will happen, that is why I am buying gold. When the trillions of dollars that are in the bond markets of the world flow out, this money needs to find a new home. Take a guess as to where allot of this money will find a new home in....

Futures and Forwards for example, the majority of Gold related trading, use interest rates in their pricing formula which directly deflate price (like Bonds, something socal can relate to)

Gold and gold mining shares went to the moon during the great depression.

When this happens, Gold and other Futures related commodities will deflate at record pace because of the cascading and correlation effects of Futures with their underlying.

If you still are not educated enough to know that gold is not a commodity then this $1388 price that gold hit today must really be confusing you.

People like you, that dont understand central banking, have been saying the "price will crash" at $880, $1080, $1180, $1280(for the few days that it stayed there) and now $1380. You have been proven wrong.

Originally Posted by Begbie

Originally Posted by socal

Originally Posted by Friedclams

Where's the part about the gold crash?

nobody likes gold more then Marc Faber.

butterfly has been wrong about gold and is just jealous that he has lost so much money not buying when i was, about 2 months ago.

people that have no understanding on how the financial markets work will continue to be wrong about gold.

Financial markets are like herds of sheep and Gold has no intrinsic value except as a bolt hole when things are bad.

You have it backwards. The paper fiat currency that gold is priced in has no intrinsic value.

So many average people like you think they have this bubble thing figured out now and they are getting burned again without even realizing it, again.

Originally Posted by socal

You need to figure out how a market works. You are implying that gold will go down when interest rates go up. Since interest rates are the inverse of the price of bonds, there will have to be huge outflows of money out of the bond market for interest rates to go up. This will happen, that is why I am buying gold. When the trillions of dollars that are in the bond markets of the world flow out, this money needs to find a new home. Take a guess as to where allot of this money will find a new home in....

you are confusing credit spread with reference interest rates boy

Originally Posted by socal

Gold and gold mining shares went to the moon during the great depression

panic time non-sense like the boom that preceded it

Originally Posted by socal

If you still are not educated enough to know that gold is not a commodity then this $1388 price that gold hit today must really be confusing you.

hahaha, the irony

Originally Posted by socal

People like you, that dont understand central banking, have been saying the "price will crash" at $880, $1080, $1180, $1280(for the few days that it stayed there) and now $1380. You have been proven wrong.

Hardly, I have no problem believing that Gold could reach 2000 USD because I know how foolish people can be with their money. I have seen happened so many times, it's like rewatching a bad movie all over again.

Originally Posted by socal

So many average people like you think

actually the average people are going into Gold

Originally Posted by socal

Originally Posted by 9999

sweet, the missus just hocked a bracelet I gave her 2 years ago to buy a phone. think it made about 15%, but who knows how much the shifty chinese gold merchants scraped.

that was sure dumb.

what if she did that 2 years ago ?

Why is it dumb? are you supposed to hoard your gold forever?

Originally Posted by Butterfly

Originally Posted by socal

You need to figure out how a market works. You are implying that gold will go down when interest rates go up. Since interest rates are the inverse of the price of bonds, there will have to be huge outflows of money out of the bond market for interest rates to go up. This will happen, that is why I am buying gold. When the trillions of dollars that are in the bond markets of the world flow out, this money needs to find a new home. Take a guess as to where allot of this money will find a new home in....

you are confusing credit spread with reference interest rates boy

Originally Posted by socal

Gold and gold mining shares went to the moon during the great depression

panic time non-sense like the boom that preceded it

no actually, the price has never gone back to the old $25 high.

Originally Posted by socal

If you still are not educated enough to know that gold is not a commodity then this $1388 price that gold hit today must really be confusing you.

hahaha, the irony

Originally Posted by socal

People like you, that dont understand central banking, have been saying the "price will crash" at $880, $1080, $1180, $1280(for the few days that it stayed there) and now $1380. You have been proven wrong.

Hardly, I have no problem believing that Gold could reach 2000 USD because I know how foolish people can be with their money. I have seen happened so many times, it's like rewatching a bad movie all over again.

whats your 20 year target then ?

Just to give you a pointer, gold never went back to its old high of $20.67 dollars after it was revalued at $35 during the great depression and it also never went back to its old highs in the 70s of $60, $70, $120, $190, $230. It has proven to stay above old highs.

This is where you go wrong again. You boast that its a bubble and might go to $2000 but where will it fall back to if it is a bubble ? Did it fall to $10 after the so called "mainia" in the 30s ? No. Did it fall to $50 after the so called "mania" in the 70s ? No.

If it goes to $3000, will it fall to $800 ? You have to make the case that this time is different. Good luck.

Originally Posted by Butterfly

Originally Posted by socal

So many average people like you think

actually the average people are going into Gold

no the average person is loaded with bonds without even knowing it. Nobody owns gold.

Originally Posted by 9999

Originally Posted by socal

Originally Posted by 9999

sweet, the missus just hocked a bracelet I gave her 2 years ago to buy a phone. think it made about 15%, but who knows how much the shifty chinese gold merchants scraped.

that was sure dumb.

what if she did that 2 years ago ?

Why is it dumb? are you supposed to hoard your gold forever?

no but the way you presented your story was a cheap-shot to anyone that is long gold.

Originally Posted by 9999

sweet, the missus just hocked a bracelet I gave her 2 years ago to buy a phone. think it made about 15%, but who knows how much the shifty chinese gold merchants scraped.

The strengthening of the Thai baht in the last two years didn't help you there, even though the gold prices has gone up.

Originally Posted by socal

the way you presented your story was a cheap-shot to anyone that is long gold.

You're very emotionally involved in this. Do you put all your gold coins on top of your bed, then roll around nude on them, cackling 'its all mine'?

The sooner gold crashes the better from my point of view !

Gold will remain pikey however much it is worth.

Originally Posted by SiLeakHunt

The sooner gold crashes the better from my point of view !

There is no possible mathematical way that gold can crash in the next 10 years.

actually statistically, Gold is due a big correction anytime soon

With both the UK and the US set to ease their currencies even further, and the likelihood of serious instability in the Middle East affecting oil supplies in the not too distant future, I would be tempted to put money in gold rather than anything else just now.

I'm curious about silver though.

I don't think there is much more to be had out of Potash.