Why Marc Faber Is Predicting A Large Correction Right About...Now

About a month ago, Marc Faber told Bloomberg that we could easily see a correction of 20% if the S&P topped 1150 and approached 1200.

Well, it seems like we're just about there, so we'll see how Faber's near term musings fare in the weeks ahead.

You can check out a video of Faber's Bloomberg interview here.

Some other thoughts from Faber:

• He thinks the Euro is very oversold, and can rally to 1.40 before going lower

• Doesn't see anything much good about the Euro, or the Dollar, for that matter

• Debt monetization is inevitable in the long run

• He likes precious metals and Asian currencies - says "most currencies are sick"

• Better to be in stocks than bonds over the next few years, because he expects increasing inflation

Faber's book Tomorrow's Gold is excellent by the way - if you haven't read it, and you are a Faber fan, I'd definitely recommend you pick up a copy.

Interestingly Faber was a deflationist when he wrote the book almost 10 years ago, and has since flipped to the inflation camp, because he believes that sovereign printing presses will overwhelm broader deflationary forces.

Further reading: Why Marc Faber sees no way around US inflation.

Marc Faber: This Rally May Have Some More Legs

Here's a short interview Marc Faber gave for Bloomberg recently (week of March 23rd), where he gave his current thoughts on US equities and Treasuries:

Faber's thoughts:

• Markets became extremely oversold on March 6, when the S&P touched 666 

• This rally may have some more legs, because the government is printing money - so asset prices may rise because of that fact alone

• The S&P could go as high as 880 in the short term

• The rally in US Treasuries has been very disappointing (to Bernanke and other Fed officials)

• Many people around the world are concerned about the long term effects of Bernanke's plan to monetize US debt

• Bernanke's actions will all "end in disaster"

Full interview at Bloomberg.com

Click here to read more Marc Faber coverage

Goldman Sachs Analyst Expects "Swift, Violent" Oil Rebound in Late 2009

Jan. 19 (Bloomberg) -- Goldman Sachs Group Inc. commodity analyst Jeffrey Currie said he expects a “swift and violent rebound” in energy prices in the second half of the year.

Oil prices may have reached their lowest point already, after falling to $32.40 in mid-December, and are expected to rise to $65 by the end of this year, the analyst said. There is scope for a “new bull market” in oil, Currie said.

Full article

Marc Faber: World War 3 Has Already Begun

Marc Faber interviewed on Bloomberg on January 6, 2009. He gives the Bloomberg talking heads a nice lesson on how capitalism works early in the first video.

Comments on the economy:

• 2009 will be a "write off" economically
• The Obama economic plan will be a disaster in the long run - as is all government economic intervention

On gold and industrial metals:

• Gold is now extremely overvalued compared with other industrial metals - he would rather buy a basket of oversold industrial metals than gold
• Small mining companies have been decimated - he'd look at these also
  

On world geopolitics:

• World War 3 has already begun - he's referring to US occupation of Iraq, Afghanistan, and the potential India/Pakistan conflict
• China and Russia want nothing to do with American troops in Central Asia
  

On market leaders:

• He favors the market leaders in each industry (ie. Intel, Cisco, Microsoft, Oracle), as they will be the strongest position when the economy turns up
• Especially likes the top names in Asia - names a few examples around the 2:30 mark
  

On the BRIC's (Brazil, Russia, India, China)

• He'd look at buying here as a trading opportunity, because asset prices have come down so much - they now look oversold
  
• Prefers ETFs as the trading vehicle
• "You have to buy the tennis balls that rebound."

"The trade of 2009 is to short US Treasury Bonds - big time."


Marc Faber Video - Part 1:



Marc Faber Video - Part 2:

Jim Rogers Covers His US Treasury Short Positions - For Now

A short Jim Rogers interview on Bloomberg - I believe from December 11, 2008. He says he has covered his short position in US Treasuries for the time being, because the trade was going against him.

He's waiting to short them again, and describes US Treasuries as "the last bubble left."

Other thoughts from Jim:

• It's idiotic for Bernanke to purchase long-dated US government bonds.
  
• Let the auto companies go into bankruptcy.
• "The government has been taking the assets away from the competent people and giving them to the incompetent people...that's bad economics and bad morality."
• These bailouts will be a "disaster for America", leading to the demise of the dollar, higher interest rates, and higher inflation.

Jim Rogers: Bonds will be a terrible investment for next 10,20 years

From Bloomberg:

Legendary investor Jim Rogers says bonds will be a "terrible" investment as economic problems may persist until 2010.

"Stocks in the West are still expensive on any historic valuation method,'' while "bonds are going to be a terrible place to be for the next 10, 20 years,'' Rogers, chairman of Singapore-based Rogers Holdings, said at a conference in Seoul today. Equities in the West will be "in a trading range for years to come,'' he said.

Full article - Bloomberg: Global Stock Market Rout May Continue, Rogers Says

Jim Rogers on Bloomberg: November 3, 2008

Editors Note: Click here to read other recent posts about Jim Rogers, including some recent videos.

I don't know about you, but I've got a case of the election blues. And not because my guy didn't win - I didn't even have a horse in this race, I couldn't bring myself to vote for any of these turkeys.

So to cheer up, I've dug out the latest Jim Rogers video. Now here's a guy I KNOW is angrier than I am right now - with free market economics going the way of the Dodo Bird, Tyrannosaurus Rex, and the capital gains tax cut (ugh).

Jim Rogers' latest thoughts (and some great one-liners):

• Bailouts are going to lead to inflation, higher interest rates, and a declining dollar

• The US is making the same mistakes Japan has made, by not letting bad banks fail

• My favorite line: "Ben Bernanke is not even as smart as Greenpan, and he was not smart at all"

• My 3rd favorite: "You can have 10-15 years of bad economics, or you can have 1-2 of bad economics"
• My 2nd favorite: "All (Paulson) has to do is resign and close the Federal Reserve, and the crisis takes care of itself"

• Another gem: "That's why they're in politics - because they don't know anything"

• The only way to make money is to buy the things where the fundamentals are unimpaired - and the only thing that fits that bill is...drumroll...wait for it...wait for it...commodities!

• He owns gold, but the IMF is about to sell a lot of gold - so it could go to $600. If it does, he'll buy a lot. If it goes to $900, he'll buy a lot.

• He's buying agriculture, oil, and shorting government bonds "today"

• Sugar's going to go through the roof over the next two decades - and he breaks out a packet on air!

Part I:

Part II:

One More Jim Rogers Video - Also Bloomberg - October 24, 2008

One more video from Jim Rogers - quick summary of his thoughts on this one - a very different interview from the previous post:

• The Japanese Yen will continue to rise - probably higher than anyone thinks it will go
  

• When we come out of this forced selling, commodities will be set to take off

• The secular case for commodities is getting even better

• Fundamentals are better in commodities. "The world has plenty of stocks"

• Oil has gone down >50% three or four times since the current bull market started - this correction is nothing unusual
  

Jim Rogers on Bloomberg: October 24, 2008

A quick summary of Jim Rogers' interview on Bloomberg from 10/24/08 - I just can't get enough of Jimmy (if you couldn't tell):

• The best place to have your money is (drumroll...) in commodities.

• Why? Because this credit crunch will drastically hurt the supply of commodities.

• "Farmers cannot get loans to expand. Nobody's going to give you money to open a zinc mine in the next decade."

• "If gold goes down, I'll buy more. If it goes up, I'll buy more. Gold's in a bull market. I expect agriculture to do better."

• "Inventories of food are the lowest they've been in 50 years...we have a shortage of farmers now."

• "Massive inflation is coming...get out of paper assets."
  

Video quality here is not great, but audio is fine. He busts out some gold bullion midway through, right out of his pocket, in case you decide to listen rather than watch.

Jim Rogers on Bloomberg: September 30, 2008

One more good recent video from Jim Rogers on Bloomberg.

Why are we taking advice from people like Bernanke and Paulson? Why are we taking advice from people who have been dead wrong over and over and over again for two years?

He said he's mostly sitting and watching the markets right now.