Perma bear Marc Faber is sounding the alarm. And when Marc speaks even more negatively than usual we think of China as his catalyst. And last we looked China was not doing so well racing to devalue the Yuan. Marc didn't show his hand in terms of position or timing, but we've little doubt he means what he says. And lest one thinks he is short all equities, keep in mind long positions in stocks make up 40% of his portfolio along with emerging market bonds. He resides in Thailand and has lived in the Far East since 1973. In an interview on CNBC Monday, he basically said that the Big One is Coming. And by big, he means up to a 50% give back in value forthe S&P 500.- Soren K.
Marc Faber Smiling
Written by Sarah Benali . Originally published on Kitco news.
U.S. equities are on a tear with the S&P 500 trading at record highs.
However, one economist, known for his gloomy outlook on the global economy, said he expects prices to fall back by 50%.
Speaking with CNBC Tuesday, Marc Faber, publisher & editor of "The Gloom Boom & Doom Report," said he attributes the rise in equities to central bank easing - or money printing - which is unsustainable.
"I think we can easily give back five years of capital gains, which would take the market down to around 1,100," he said.
click HERE for interactive chart
"The fact is, the market hasn't really been driven by genuine buying, but by stock buybacks, takeovers and acquisitions, and market leadership has been narrowing. It's not that many stocks that have been making new highs. It's quite a narrow growth of stocks that have been very strong," he added.
After taking a dive early in the year, the S&P 500 managed to pick up steam and is trading near all-time highs, up 6.68% YTD. On Tuesday afternoon, the index was near record territory.
Faber said that not only have equities benefitted from easy monetary policy, but so have gold, silver and mining shares. Gold futures are up 27% year to date while silver is up nearly 44%. At the same time, mining shares have managed to rally over 100% this year as the underlying bullion price surged.
"The market has gone up and we have continued seeing money printing in the world...This liquidity is flowing around the world and driving up asset prices," he said. "When you print money, something goes up. The real economy in the world isn't doing well."
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