Upload
fourthandgoal
View
214
Download
0
Embed Size (px)
Citation preview
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 1/50
www.gloomboomdoom.com
Dr Marc Faber 2012
Presentation for the London Bullion Market Association
11.00am, Monday, November 12, 2012
At the Grand Hyatt Hotel
HONG KONG
Marc Faber Limited
Suite 801, The Workstation, 43 Lyndhurst Terrace
Central, Hong Kong
Tel: (852) 2801-5411
Fax: (852) 2845-9192
Email: [email protected]
Deflationary Bust or Government Profligacy and Money Printing
“Our analysis leads us to believe that recovery is sound only if it does come
of itself. For any revival which is merely due to artificial stimulus leaves part
of the work of the depressions undone and adds, to an undigested remnant of
maladjustments, new maladjustments of its own.”
Joseph Schumpeter
“There are two ways to conquer and enslave a nation. One is by the sword.
The other is by debt.”
John Adams
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 2/50
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 3/50
FED FUND RATE & CRISES, 1960 - 2012
www.gloomboomdoom.com
Source: Ed Yardeni, www.yardeni.com
2
"If it were possible to take interest rates into negative territory I would be voting
for that.”
Janet Yellen
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 4/50
FOR HOW LONG WILL REAL INTEREST RATES
STAY NEGATIVE?
www.gloomboomdoom.com
3
Source: Ron Griess, www.thechartstore.com
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 5/50
LONG TERM US INTEREST RATES, 1790 - 2012
www.gloomboomdoom.com
Source: N/A
4
Since 1790, the average interest rate on US Long-Term Treasuries has been 5%!
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 6/50
TOTAL CREDIT MARKET DEBT AS PERCENTAGE OF
US GDP, 1921 – 2010
5
www.gloomboomdoom.com
Source: Ned Davis Research
“There are two ways to conquer and enslave a nation. One is by the sword. The
other is by debt.” John Adams
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 7/50
IS A DEFLATIONARY COLLAPSE POSSIBLE?
Source: The Bank Credit Analyst, Barry Bannister, Stifel Nicolaus
www.gloomboomdoom.com
6
“The overall level of debt makes no difference … one person’s liability is another
person’s asset.” Paul Krugman
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 8/50
PRIVATE SECTOR CREDIT GROWTH EXPANDING
AGAIN
www.gloomboomdoom.com
7
Source: Ed Yardeni, www.yardeni.com
“The grand fight between central bank debt monetization and the natural order of
economic cleansing is about to enter a deeper, darker circle of hell.”
Bill King, The King Report (July 2012)
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 9/50
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 10/50
OFFICIAL US FISCAL DEFICIT AND CALCULATED
ACCORDING TO STANDARD ACCOUNTING RULES
(IN $ TRILLIONS)
www.gloomboomdoom.com
9
Source: USA TODAY Research, Congressional Budget Office
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 11/50
10
THE UNLIKELY FISCAL CLIFF: SIZE OF FEDERAL TAX
INCREASES, 1968 – 2012
Source: Strategas Research Partners, www.chartoftheday.com
www.gloomboomdoom.com
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 12/50
www.gloomboomdoom.com
11
FEDERAL SPENDING AND INCOME AS A PERCENTAGE
OF GDP
Source: www.usgovernmentspending.com, www.theliscioreport.com
“We all know what to do, we just don't know how to get re-elected after we have done it.”
Jean- Claude Junker (Prime Minister Luxembourg)
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 13/50
Source: Dan Mitchell, International Liberty
www.gloomboomdoom.com
12
FEDERAL SPENDING AS SHARE OF GDP:
CANADA AND US, 1965 - 2012
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 14/50
PERCENTAGE OF US POPULATION LIVING IN A
HOUSEHOLD RECEIVING
SOME GOVERNMENT BENEFIT, 1983 - 2012
13
www.gloomboomdoom.com
Source: US Census Bureau, The Wall Street Journal
14
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 15/50
14
www.gloomboomdoom.com
GOVERNMENT SPENDING AS A PERCENTAGE OF GDP,
1870 - 1913
Source: The Cato Institute
“Little else is requisite to carry a state to the highest degree of opulence from the lowest
barbarism, but peace, easy taxes and a tolerable administration of justice.”
Adam Smith
15
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 16/50
GROWING WEALTH INEQUITY: THE GAP BETWEEN
YOUNGER AND OLDER AMERICANS
(MEDIAN NET WORTH IN 1984 AND IN 2009)
15
www.gloomboomdoom.com
Source: CNN Money, Pew Research Center, www.mybudget360.com
16
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 17/50
MEDIAN HOUSEHOLD NET WORTH BY AGE GROUP,
1989 – 2010
16
www.gloomboomdoom.com
Source: Board of Governors of Federal Reserve System, 2010, Economic Policy Institute
“If all prices and incomes rose equally, no harm would be done to anyone. But the rise is not
equal. Many lose and some gain.” Irving Fisher
17
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 18/50
www.gloomboomdoom.com
17
NET US DOMESTIC CAPITAL SPENDING,
1947 - 2012
Source: Ed Yardeni; www.yardeni.com
18
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 19/50
US TRADE BALANCE, 1950 - 2012
www.gloomboomdoom.com
18
Source: Ron Griess, www.thechartstore.com
19
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 20/50
INCREMENTAL DEMAND FROM CHINA AND EXPANSIONARY
MONETARY POLICIES DROVE COMMODITY PRICES HIGHER
www.gloomboomdoom.com
19
Source: Barry Bannister, Stifel Nicolaus
20
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 21/50
THE INDUSTRIALIZED COUNTRIES’ RELATIVE
ECONOMIC DECLINE
20
www.gloomboomdoom.com
Source: Ed Yardeni; www.yardeni.com
21
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 22/50
CHINA’S EXPORT DESTINATIONS
www.gloomboomdoom.com
21
Source: The Bank Credit Analyst
22
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 23/50
SOUTH KOREA’S EXPORT DESTINATIONS
www.gloomboomdoom.com
22
Source: The Bank Credit Analyst
23
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 24/50
CHINA’S SHARE OF GLOBAL COMMODITY TRADE (NET
IMPORT AS PERCENTAGE OF WORLD IMPORT), 1992 - 2012
www.gloomboomdoom.com
23
Source: IMF, Maybank Kim Eng
24
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 25/50
CHINA’S CURRENT SHARE OF
WORLD COMMODITY CONSUMPTION
www.gloomboomdoom.com
24
Source: Barclays Capital, www.agorafinancial.com
25
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 26/50
25
AT SOME POINT COMMODITIES CONSUMPTION GROWTH
LEVELS OFF OR….
www.gloomboomdoom.com
Source: Ed Yardeni; www.yardeni.com
26
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 27/50
26
..…OR DECLINES AS IN THE MOST
ADVANCED ECONOMIES
www.gloomboomdoom.com
Source: Ed Yardeni; www.yardeni.com
27
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 28/50
A CREDIT BUBBLE IN CHINA!
www.gloomboomdoom.com
27
Source: Bridgewater Associates
28
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 29/50
RATIO OF HOME PRICES TO ANNUAL INCOME IN
SELECTED CITIES, 2011
www.gloomboomdoom.com
28
Source: IMF, Global Stability Report, Albert Edwards, Societe General
29
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 30/50
CHINA’S OIL CONSUMPTION, 1987 - 2012
29
www.gloomboomdoom.com
Source: Ed Yardeni; www.yardeni.com
30
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 31/50
CHINA’S “STRING OF PEARLS” TO PROTECT THE
SHIPPING LANES
www.gloomboomdoom.com
30
Sources: International Maritime Bureau
“The first panacea for a mismanaged nation is inflation of the currency; the
second is war. Both bring a temporary prosperity; both bring permanent ruin.”
Ernest Hemingway
TENSIONS AROUND THE SOUTH CHINA SEA31
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 32/50
TENSIONS AROUND THE SOUTH CHINA SEA
www.gloomboomdoom.comSource: www.middlebury.edu
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 33/50
33
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 34/50
AVERAGE HOLDING PERIODS OF US EQUITIES,
1926 – 2011
www.gloomboomdoom.com
Source: Alan Newman, www.cross-currents.net
34
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 35/50
HIGH VOLATILITY LIKELY TO CHARACTERIZE
ALL INVESTMENT MARKETS
Source: John Roque, WJB Capital Group ([email protected])
www.gloomboomdoom.com
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 36/50
O O A ASS S A S36
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 37/50
HOW DO WE VALUE ASSETS WHEN REAL INTEREST
RATES ARE NEGATIVE?
www.gloomboomdoom.com
Source: Barry Bannister, Stifel Nicolaus
37
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 38/50
WILL US CORPORATE PROFITS DISAPPOINT?
(AFTER-TAX PROFITS OF US CORPORATIONS AS A
PERCENTAGE OF BUSINESS GDP, 1950 – 2011)
www.gloomboomdoom.com
Source: Gerard Minack, Morgan Stanley
“It has long been recognized, by the business world and by economists alike, that a
period of rising prices acts as a stimulus to enterprise and is beneficial to business
men.” John Maynard Keynes
38
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 39/50
PERCENTAGE OF US STOCKS WITH A DIVIDEND
YIELD HIGHER THAN TEN-YEAR TREASURY
NOTE YIELD, 2006 – 2012
Source: Wolfe Trahan & Co
www.gloomboomdoom.com
39
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 40/50
SELECTED “PRICE BUBBLES”
www.gloomboomdoom.com
Source: The Bank Credit Analyst
40
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 41/50
SELECTED EQUITIES IN GREECE, PORTUGAL, SPAIN,
ITALY, AND FRANCE ARE INEXPENSIVE
www.gloomboomdoom.com
Source: Thompson Reuters Datastream
“We are continually faced with a series of great opportunities brilliantly
disguised as insoluble problems.” John W. Gardner
41
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 42/50
WHAT IF THE EURO FALLS APART?
www.gloomboomdoom.com
Source: Ron Griess, www.thechartstore.com
MEXICAN PESO, 1969 - 2009 (Monthly Spot – Pesos per USD)
42
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 43/50
MOVEMENT OF MEXICAN STOCKS IN PESO
AND USD, 1979 - 1988
www.gloomboomdoom.com
Source: Acciones Y Valores De Mexico, SA;
Marc Faber, The Great Money Illusion (Hong Kong, 1988)
43
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 44/50
S&P 500 TRAILING 10-YEAR COMPOUND ANNUAL
TOTAL RETURN, 1825 - 2011
www.gloomboomdoom.com
Source: Barry Bannister, Stifel Nicolaus
44
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 45/50
PREFERENCE FOR ASIAN EQUITIES
www.gloomboomdoom.com
Source: Nicholas Smithie, UBS
“Inflation is like sin; every government denounces it and every government
practices it.” Frederick Leigh-Ross
ONE CONCERN: EMERGING MARKET CURRENCIES45
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 46/50
ONE CONCERN: EMERGING MARKET CURRENCIES
www.gloomboomdoom.comSource: The Bank Credit Analyst, J.P. Morgan Chase & Co
46
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 47/50
Source: McKinsey & Company
www.gloomboomdoom.com
THE WORLD’S FINANCIAL WEALTH 2009
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 48/50
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 49/50
49
7/27/2019 114206272 50 Charts From Marc Faber
http://slidepdf.com/reader/full/114206272-50-charts-from-marc-faber 50/50
There is no means of avoiding a final collapseof a boom brought about by credit expansion.
The alternative is only whether the crisis
should come sooner as a result of a voluntary
abandonment of further credit expansion, orlater as a final and total catastrophe of the
currency system involved.
Ludwig von Mises