Mish's Global Economic Trend Analysis |
| Marc Faber on Investment Strategies, Government Idiocies, Gold, Safe Havens Posted: 14 Oct 2013 10:23 AM PDT Marc Faber, publisher of the Gloom, Boom & Doom Report, told Tom Keene and Sara Eisen on "Bloomberg Television" today "there is no safe haven. The best you can hope for is that you have a diversified portfolio of different assets and that they don't all collapse at the same time." On the debt ceiling debate in Washington, Faber said, "It's basically a dysfunctional government that we have that is far too large that is essentially wasting money left, right and center. The Republicans are wasting money on the military complex and the Democrats are basically buying votes with transfer payments, with entitlement programs, it goes on. It is a huge waste. The problem is that I don't see a solution." Link if following video does not play: Faber on Investment Strategies and Gold Faber on Gold: "We have a strong rally from the lows at 1180 to over 1400 and now we are backing off. I think between around 1200 and 1250 it is getting into buying range. The sentiment about gold is very negative, but if you look at everything considered - the monetization of debt, the debt ceiling, which sooner or later will be increased because both Republicans and Democrats are big spenders and the government's debt has expanded from $1 trillion in 1980 to $5 trillion in 1999, now we are at $16 trillion. Both Democrats and Republicans have been big, big spenders because a lot of money flows through the government." Faber on Debt Ceiling: "If they don't agree by the 17th, I think what can happen is that the Fed will actually finance the Treasury independently so the interest payments are being met. If the interest payments are not being met, I think it will cause quite a bit disruption to the financial market. I am not that concerned about that. I think this larger issue is like the euro issue a year ago where people were very negative and it was debated and so forth. In the end it is a political decision. I think both parties want to spend. It's just on different items that they want to spend money." Faber on Equities, Bonds, Currencies, Commodities, and Government Idiocies: "Yes, idiocies by governments. That is exactly the word. It's basically a dysfunctional government that we have that is far too large that is essentially wasting money left, right and center. The Republicans are wasting money on the military complex and the Democrats are basically buying votes with transfer payments, with entitlement programs, it goes on. It is a huge waste. The problem is that I don't see a solution. I think the current debate about the debt ceiling and the budget is more a symptom of a problem than a problem itself. The problem is really that the government, not just in the US but other countries as well, has grown disproportionally large and that retards economic growth." Faber on Safe Havens: "There is no safe haven. Bank deposits are not safe, which used to be safe. Money in treasury bills is not 100% safe because there is inflation in the system and you hardly get any interest. Bonds are not very safe anymore because eventually interest rates will go up. Equities in the US are relatively expensive by any valuation metrics you might use. I don't see anything particularly safe. The best you can hope for is that you have a diversified portfolio of different assets and that they don't all collapse at the same time." Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Posted: 14 Oct 2013 10:00 AM PDT Bond markets are closed today but the likely reaction to all this talk of catastrophe would be the same big yawn as before. And one has to wonder how many times the stock market can rally on the same non-news that meetings are underway. The BBC reports President Obama to meet with Congressional leaders on debt limit. US President Barack Obama and Vice-President Joe Biden are scheduled to meet congressional leaders from both parties as the deadline to raise the nation's debt limit nears.Real Irony If Boehner put the damn thing to a vote right now, there would be no increase in spending. It is the Republicans who want to increase the deficit by dropping the medical device transaction tax. And it is Republicans who want to soften the cutbacks in the increase in military spending. Notice that I said "cutbacks in the increase", not cutbacks. Likely Result is More Spending After all this bitching and moaning about the deficit, here's the likely "compromise": leaders of both parties will sit down and pass a spending bill that increases spending now while pushing hypothetical cuts further into the future. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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