Marc Faber Sees US Inflation Approaching Zimbabwe Levels (!)

"Dr. Doom" Marc Faber drops the casual obervation in this Bloomberg interview that he sees inflation levels rising in the US...in fact, eventually approaching Zimbabwe levels!

Prompted by a viewer question that asked whether it's more likely the US will default on its debt, or go into hyperinflation, Faber says he "100% sure" that the US will go into hyperinflation.  He sees inflation picking up eventually, and the Fed keeping short term interest rates below the rate of inflation to stimulate consumption.

Which will then necessitate more money printing, and - boom!  Runaway inflation train...leaving the station, never coming back.

They don't call him Dr. Doom for nothing - but ignore Faber at your own peril, he's one of the few guys to call most of the recent financial disaster properly.  The guy is a fabulous thinker and visionary, he knows history down cold, and always sees developments a few steps ahead.

Also of interest in the interview, he believes this could be more than "just a bear market rally" - as he cites money printing and deficit spending as a fundamental event that is capable of driving these types of rallies.  A "crack up" boom he calls it, that "explodes at some point."

He believes Japan's equity markets will perform very well, at least respectively, over the next 5 years, as much of the world has given up on Japan.

Asia is still a favorite of Faber's as a region to invest in...he thinks money that has been in the US and Europe for years will start to find its way over to Asia.

Final tidbit from Faber right at the end...he says Natural Gas is THE most undervalued commodity right now.

Again, you can catch the full interview here - it's a good one.

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

Marc Faber: Expect Markets to Stabilize and Rebound (Somewhat) in the Short Term

Marc Faber's observations on a CNBC interview from January 19, 2009:

• The corporate credit markets have improved somewhat

• He expects government bond markets to weaken, due to the increasing unlikeliness they will be able to pay off their mounting deficits - believes this may be the "next shoe to drop"

• There's a very good chance the 2nd half of 2009 could be even worse than the 1st half of 2009

• At 850-900, the S&P is not particularly inexpensive, because corporate earnings continue to dissolve

• There are some pockets of value in Asia, and many stocks have attractive dividend yields at 3 to 4 times the bond yields

Faber on Commodities

• The bull market in commodities is still relatively young (started in 2001) - while the bull market in stocks started about 20 years earlier

• Supply of many commodities will suffer greatly due to this credit crisis

• When the global economy recovers, many commodities will rise substantially as a result

Faber on Inflation vs. Deflation

• While there has been a deflation in asset prices, he has not noticed any deflation in consumer prices

• Doesn't know who "in their right mind" would buy a 30-Year US Treasury that is yielding less than 3%...in a structurally weak currency
  

Faber's Current Investments

• Thinks the markets became very oversold in November

• Anticipates the markets will stabilize and rebound somewhat over the next couple of months

• Has some shares in Asia, mining stocks, exploration companies, physical gold, and a basket of currencies

• Thinks the dollar could strengthen further in the short term
  

Part I: Marc Faber on CNBC - January 19, 2009:




Part II - Marc Faber on CNBC - January 19, 2009:



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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: