Marc Faber: Outlook for April and Beyond
with hosts Matt Miller and Carol Massar on Bloomberg Televisions
afternoon program Street Smart, Marc Faber, publisher
of the Gloom, Boom & Doom Report, offered his
latest thoughts on a variety of financial subjects including
his guess for the direction of equities in April.
On the prospects
for QE3, Faber reiterated his views of what he thinks is coming
from a Bernanke Fed and an accommodating Congress.
there will be QE3, but not right away, Faber said. So
I think they will do QE3; and my view is they will do QE3, QE4,
QE5, until QE26, until the whole system breaks down.
As far as the
timing of a Fed announcement of an extension of its so-called quantitative
easing program, Faber suggested that the Fed wont go forward
with its plan for further easing while pundits of the Feds
policy actions remain too large in numbers. Therefore, a crisis
in confidence on Wall Street must precede any announcement regarding
further expansion of the Feds balance sheet, he speculated.
QE2 is fully discounted, Faber said. I believe the Fed
would like to see stocks correcting somewhat and then have an excuse
if stock are down 20%, then yeah, we need QE3.
On the subject
of relative stock market
values between U.S. markets and other markets, the Swiss-born investment
manager disagrees with the notion that U.S. stocks are cheap relative
to foreign markets, citing Mexicos much improved economic
fundamentals, as an example, along with the countrys low-wage
base and proximity to the worlds largest economy to the north.
said, is pricing itself out as a low-wage producer of choice among
developed nations, while Mexicos wage growth, on the other
hand, continues to stagnate. Faber also cited Thailand as another
example of his viewpoint. The availability of sound growth stocks
in the Thai market, which in some cases pay 7% dividends, and other
stocks, which can be purchased at price-to-earnings valuations in
the nine and 10 range, offer better value, according to Faber.
by Carol Massar what he thinks of the fiscal climate in Washington
to deal with the ballooning federal budget deficits, the unabashedly
outspoken Faber colored the interview with his views on the issue
as well as his opinion on U.S. foreign policy and American culture.
is already out of control. Its going to be very difficult,
he said of the political will to institute fiscal austerity measures
to slow explosive trillion-dollar budget deficits.
has to be patriotic. Patriotism doesnt mean to go to invade
Iraq and Afghanistan and bomb Libya with mercenaries, Faber
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Marc Faber [send him
mail] lives in Chiangmai, Thailand and is the author of Tomorrow's
Best of Marc Faber