Marc Faber on Bloomberg June 29, 2009 discusses the economy, financial markets, his near-term outlook and long-term forecasts.
We’ve probably most likely seen a major low on March 6, 2009 when the S&P hit 666. Here in Asia most markets actually bottomed out in October/November of last year. So I think what will happen… If the S&P drops again towards 800 I’m sure there will be another stimulus package and another massive monetary injection. And if that doesn’t help then another one will come when the S&P drops toward 700. I don’t think we’ll see new lows. I also believe that the economic recovery will be relatively dissapointing with the government sector expanding.
It is basically the government that is creating jobs and the private sector is hardly creating any jobs.
Right now, for the next 4 – 6 weeks, I think the dollar could recover somewhat, I think bonds could rally somewhat, I think industrial commodities could come under pressure and gold kind of move sideways or come under pressure. That’s a near-term call.
Long-term, the situation is different. Longer term i look for essentially a weak US Dollar and for strength in commodity prices and of course also gold. And, the relative outperformance of Asian shares vis-a-vis European or US shares.
Marc Faber on the US government’s ability to save the economy:
I have zero confidence. Absolutely zero. There is no political bill to reduce the deficits and to keep money tight.
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