Dr. Marc Faber of Doom, Boom and Gloom report fame adds to his commentary of the continued threat of inflation. Interesting to note for this video is the time frame that it occurs. I have not heard all his commentary or interviews but I do not recall him mentioning that the final crash could be 5 years out.
I suppose he is assuming that the current stimulus will prop things up for 5 years and then things will crash.
Recent positive stock market news with improved company earnings are not what they appear. There has been tremendous cost cutting going on and this has masked sales that are not increasing at all or are very anemic. There is a reason that his newsletter is called the doom, boom and gloom report and this video supports that.
His view is that there is potentially more inflation in the system because of contined money printing, stimulus and too low interest rates and the market/Fed perception that we are in a deflationary time. Hence if that is not perceived to work they will add even more of the above to the system with catastrophic results.
He has mentioned parallels with what has happened and is happening in Zimbabwe right now with 3 trillion Zimbabwe Dollars required to get a bus rise. Currently that is the equivalent of 50 cents US. I read this recently and the women had to hand 3 stacks of bills to the bus driver as she only had 100 Billion Zimbabwe notes.
Personally, I think I might go on Ebay to buy one of these large notes for framing. I will put it beside the 500,000,000 German Mark from 1923 that I bought last year. I read the book “The German Inflation of 1923″ a number of years ago and recall that 200 Billion marks was required in 1923 to buy a loaf of bread. The same purchase of one loaf of bread in 1919 was 1 mark.
This German inflation wiped out the middle class and unfortunaltely was one of the events that led to the rise of Hitler. People were grasping at anything. Can you imagine what might happen in the states in the same sitation?
I liked his analysis of why the interest rates are being held too low. He states that they are trying to force people out of cash and into the market. Stocks etc. will likely go up not because the prospects of the business are good but because there is nothing else to put their money in. Real Estate is still dropping, interest rates are below even the official rates of inflation–so people feel they have no choice. There is nothing else to invest in other than perhaps precious metals and commodities.
Final advice from Marc Faber. Look at your personal cash flow, evaluate your job security and buy stocks possibly in resource companies and possibly Asian stocks to help you diversify outside the United States. Also own some physical gold, silver and platinum.
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Older interview from January 2009 that discusses what Jim Rogers sees for 2009. He provides his irreverent commentary in his typical blunt style. I have grown to admire the man for both his faults and his insight. I didn’t grow up in a town quite as small as Demopolis, Alabama however I share many of the insights he wrote about in his recent book, A Gift to My Children which he wrote for his 2 daughters.
He is generally early with his market calls which in his new book he said that he is working on—for investing and personal reasons. I remember a late 1990’s (1998?) argument he had with his fellow commentators when he was one of the hosts of CNBC. As I recall he was calling for the end of the technology boom and he was getting a huge backlash from his co-hosts. Then he preceded to outline the reasons that commodities where the place to be and they almost had a cardiac arrest.
I realize that hindsight is 20/20 but the classic signs of a boom were there and the argumentative tone and contempt the he was shown by his colleagues was way over the top. It was classic Jim Rogers where he is arguing his lone hand against people who should no better—yet in hindsight are no more than talking heads.
He was definitely early in his call and he has stated that that is one of his major problems but in hindsight he foresaw this commodities boom. Gold at that point had not reached it’s all time low and neither had oil—both occurred in 2001 and 2002. we definitely know what happened to the tech boom, though once again that took a couple of years after this discussion.
I will post this interview if I find it.
Interesting interview between George Soros and Alan Murray from the Wall Street Journal. My first reaction when viewing it is how good an interviewer Alan Murray is. This is my first exposure to Mr. Murray and I have bookmarked him for future reference.
Now–on to the interview.
Usual George Soros with an emphasis on the Macro picture. His insights on China being the main beneficiary of globalization over the last 20 or so years was compelling (and for me suddenly obvious!) and his thoughts that the recent meltdown in the Western Financial markets was for China a more extraneous event compared to the effect on the developed world was food for thought. I think I might spend more time researching the latter.
Maybe it is just me but I find Soros much easier to understand these days compared to several years ago. I doubt it is because I am smarter so I can only assume that he is making efforts to be better understood. His Alchemy of Finance which I read and reread years ago was torture in some places.
Enjoy!
Buddhist teacher Pema Chodron calls it “being comfortable with uncertainty” – being willing to take every aspect of reality as the starting point, without wasting energy wishing things were different, without denying reality as it is (even if your next step is to work toward changing things), and without needing to know what will happen in the future. “The truth you believe and cling to makes you unavailable to hear anything new. The best thing we can do for ourselves is to be open to an unknown future.”
I liked this quote that I picked up from a now forgotten newsletter that I read (Gartman?).
Anyway the point of it from an investing perspective is brilliant in my opinion. It allows me to accept the inevitable losses with less emotional damage. In my younger trading days I had a tendency to want to get “even with the market” for not doing what it was supposed to do. I remember reinitiating trading positions when I had just got stopped out in the same product and on the same side—with the inevitable result of more losses.
Now that I am “wiser” (notice the quotation marks) I realize that I may never know why my analysis was wrong–or I will find out months later. It really doesn’t matter if I ever find out and no matter how many times I have read this simple advice I even now disregard it—to my sorrow. Maybe someone out there can explain to me why the hardest lessons must be relearnt time and time again.
By the way–I now have a personal trading rule that I make every attempt to follow. If I get stopped out of a position I am not allowed to re initiate any position in that commodity/stock/whatever until 7 calendar days have passed.
The latter may cost me sometimes however, anecdotally I believe it has saved me a fortune. Let us hope that I don’t get stupid (again) and forget it.
Funny I notice that most of my stupidity occurs when I have had a good run!
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