Peter Schiff – U.S. Rally Is Doomed Gold Will Hit 5000

Unlike the “legitimate bull markets” of many foreign markets, Peter Schiff believes the U.S. is merely experiencing a “rally in a bear market,” and is lagging the rest of the world “for a reason.”The worst is not over, according to Euro Pacific Capital’s Schiff, who predicts the Dow will fall another 90% from current levels when measured against gold.A longtime dollar bear and gold bull, he foresees gold hitting $5000 per ounce “in the next couple of years,” and predicts the Dow and gold will trade on a one-to-one ratio vs. the current level of around 9.7-to-1.Schiff believes gold is currently “climbing a wall of worry” but will eventually become as hot as tech stocks in 1999 and start moving up $100 per day.Schiff’s forecast is based on his view the U.S. dollar is going to collapse under the weight of our massive deficit and reckless policies of the Obama administration, which he compares to the massive spending programs of the 1960s, which paved the way for gold’s ascent in the 1970s. “Obama is making the same mistakes as Bush, but he’s doing them on a grander scale,” says Schiff, who is running for U.S. Senate in Connecticut as a Republican.In addition to gold, Schiff remains bullish on Asia, most notably China. His firm recently launched the Euro Pacific Halter China fund, and Schiff believes “there’s a lot of value” in China and thinks the renminbi could “double or triple” when it’s depegged from the dollar.That will make Chinese assets more valuable when measured in dollars, he says.Schiff presciently called the bursting of the debt bubble and subsequent rout in financial assets, and his current forecasts may very well come to fruition. But Schiff’s confidence that the rest of the world (notably Asia) will prosper as the dollar loses its reserve status and America’s economy collapses seems dubious, at best.Then again, Schiff is nothing if not (supremely) confident.

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Peter Schiff says, The Economy Is Getting Worse Not Better

The Fed upgraded its view of the economy Wednesday, declaring: “Economic activity has picked up following its severe downturn.”But forget all the talk about recovery, V-shaped or otherwise. The economy is actually worse today vs. during the depths of the recession, according to Peter Schiff, president of Euro Pacific Capital and author of Crash Proof 2.0.”Ben Bernanke is keeping his record of perfection intact of never getting anything right. Once again he’s gotten it wrong,” Schiff says. “If the Fed really thought the economy was sound, why does he have it on life support? If he pulls the plug, our sick economy is going to die.”Although the Fed never said the economy is “sound”, Schiff is referring to the FOMC’s renewed pledge that “economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”Nothing that’s occurred in the past six months has changed Schiff’s view that America’s economy is headed for disaster. In fact, he’s even more convinced a true “currency crisis” awaits, and that China will soon stop enabling our reckless borrowing, the basis our “phony” economy. The coming collapse of the dollar and bursting of the Treasury bubble will have devastating consequences for ordinary Americans, and any investors based in dollars, he says.The economy today is “worse [because] we are much more deeply indebted than in March,” Schiff declares. “We’ve dug ourselves a deeper hole.”

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Marc Faber Is “Highly Confident” the Future Will Be Very Bleak: See Video on Tech Ticker – Yahoo! Finance

“The future will be a total disaster, with a collapse of our capitalistic system as we know it today, wars, massive government debt defaults and the impoverishment of large segments of Western society,” Marc Faber writes in the September issue of The Gloom, Boom & Doom Report.A statement like that pretty much speaks for itself, but it’s a bit more complicated than appears on first blush.Faber has been bullish — especially on commodities and emerging market stocks — for some time now and believes the current global recovery trade will last another two-to-three years, as discussed in more detail in a forthcoming clip. But he has major long-term concerns about the dollar’s long-term viability given rising U.S. deficits, massive unfunded mandates and the fact “we have a money-printer at the Fed.”This combination will eventually lead to runaway inflation, wholesale debasement of the dollar, and a major lowering of living standards for most Americans and many Europeans as well, says Faber, who is “highly confident” in this grim prediction.

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Buy Stocks Because U.S. Dollars Will Be “Worthless” Says Marc Faber

Marc Faber, editor of The Gloom, Boom & Doom Report is, by his own account, “ultra-bearish” on the long-term fundamentals of the U.S. market. (Discussed in detail in this clip.)However, in the near term, Faber sees plenty of money-making opportunities in stocks. Sure, prices aren’t as cheap as they were in March, yet he’s confident, “in this environment cash will become worthless.” As a result, he says investors are, “better off being in equities,” for the next two to three years.Faber is most bullish on mining and energy companies. He recommends: * Newmont Mining and FreeportMcMoran as relative inexpensive. He also mentions Nova Gold, as another, more speculative buy. * In a contrarian call, on natural gas, he says Chesapeake Energy will be a winner when prices eventually rebound. * Oil giant ExxonMobil is another stock he thinks offer good value.Outside of that, Faber says buying large-cap pharmaceuticals like Pfizer and Johnson & Johnson offer good defensive options.Finally, he suggests U.S. airlines are poised for a rebound. If that happens, international airlines will follow and Thai Airways stock could double.

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Marc Faber – Emerging Market Economies Will Challenge and Surpass the West

Marc Faber has an informal rule never to spend more than 10 days in a country before rushing to the next one. In addition to lots of frequent-flyer miles, this gives him the chance to see firsthand how lots of the world is doing.So how’s it doing?Better than the U.S., says Faber, the editor of the The Gloom, Boom & Doom Report.In the U.S. we have a “structural unemployment” problem. We have a debt problem. We have an economy-propped-up-by-frantic-government-spending problem. And, by in large, while the rich get richer, the middle class does not benefit, especially during the boom days earlier this decade.The rest of the world has problems, too, of course, Faber says, but they’re not as bad as ours. He’s observed businesses in emerging markets in Asia are less vulnerable to market fluctuations because they tend to be cash rich, and therefore less reliant on debt and leverage. He also says there’s a hunger and competition, in countries like China and India, that’s missing in the U.S.So go ahead and enjoy the “v-shaped” recovery while it lasts, says Faber, who has already fled to Hong Kong.

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Marc Faber – America Already Has Way Too Much Debt

Ken Fisher’s argument that America is “under indebted” and that more debt will be a global phenomenon in the next 10-20 years raised a lot of eyebrows last week – and quite a few catcalls in our comments section.Fisher may be technically right — that there’s appetite for more U.S. debt, but Marc Faber, editor of The Gloom, Boom & Doom Report, scoffs at the idea that it would be healthy or smart.More debt “comes at the expense of a falling dollar…and much higher inflation rates in the future,” says Faber, who notes the U.S. has total debt-to-GDP ratio of 375%, “excluding contingent liabilities from Medicare and Medicaid.”Perhaps more important than absolute debt levels, Faber says much of America’s debt has gone to pay for unproductive things like golf courses and big houses and investments with Bernie Madoff.Meanwhile, emerging market economies, in Asia particularly, have much lower debt levels and have used leverage to pay for modernization of factories and educated workers when they’ve used debt, Faber says.”The Western world is overleveraged,” he says. “We’ve mortgaged the future and our children will have to pay for that somehow.”It is for these and related reasons that Faber is “ultra-bearish” on the dollar and much more optimistic about emerging market economies, as discussed in these earlier segments:

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The Greatest Sucker’s Rally in History: Tech Ticker, Yahoo! Finance

In the past six months, Aaron and I have talked a lot about the similarity between the rally of early 1930 and the one we’re having today.The early 1930 rally came after the market had fallen nearly 50% in the fall of 1929. The spring rally took the market up nearly 50% again, to a level that was only about 20% below the previous peak.That rally, of course, was also the biggest sucker’s rally in history. After the market peaked in April 1930, it crashed again, eventually ending up down 89% from the 1929 high and more than 80% from the 1930 high. The market did not reach the 1930 high again for another quarter of a century.Our current rally came after a crash that was actually slightly more severe than the 1929 crash (53% versus 48%). It has taken the market up more than 50% from the low. Our current rally has also lasted slightly longer than the 1930 rally did.Today’s rally, of course, may actually be the start of a great new bull market, one that will climb the “wall of worry” back toward the previous record highs. On the other hand, it may yet also be another version of what happened in 1930.We won’t know for sure what today’s market is until we look at it with the genius of 20/20 hindsight. As yet another reminder of how similar the patterns up to this point have been, check out this excellent compilation of New York Times clippings from early 1930 put together by Dan Alpert of Westwood Capital.Dan’s complete compilation is contained in a broader research piece, which is embedded at the end. The slides below contain excerpts from February-April, 1930:Google: The Greatest Sucker’s Rally In History, Play By Play

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