Marc Faber Believes US Equities Are a Trap
The famous investor Marc Faber who is a contrarian in nature believes that US equities are not a buy and said that the US economy will slowdown and could enter a recession in half an year. Equities could start correction by the end of 2015.
During the interview for CNBC Trading Nation, Marc Faber shared: “We could very well be in a recession in the US within 6 months.” He also believes a huge correction in the US stock market could send stocks down much more than 20%.
He is more worried than ever: “I’ve had this negative view for quite some time,” Faber said Wednesday. “But whereas before I expected roughly a 20 percent correction, which is nothing compared to where we came from,” at this point, “I would expect something more serious to occur.”
The contrarian investor and also a publisher of the GBD Report said: “I don’t think the US economy is doing particularly well. One of the problems is affordability, and cost-of-living increases. For most households, the cost of living has gone up very substantially and so their spending power is limited. In addition to that if you look at tax revenues in the U.S., corporate tax as a percent of GDP is essentially flat. However, what has gone up a lot as a percent of GDP is individual taxes, so it has some negative impact on the economy.”
Marc Faber was also a guest and gave an interview for FOX Business Network’s The Intelligence Report with Trish Regan.
Marc said: “It’s not just the Fed that has fueled the bubble, it’s the other central banks… the ECB that has fueled the bubble mostly with sovereign debt and bailed out Greece repeatedly,” he said.
He also added: “As they bailed out Greece repeatedly, the problem became bigger and bigger and bigger. This is the problem of central banking today-they do not solve problems, they postpone problems.”
When Marc was questioned about the FED and interest rates, a topic very hot these days, he said:
“Basically, we are six years into an economic recovery… there are huge distortions in the markets, where basically financial assets have been going up very substantially, and real wages for the typical household, or real household income, has been either flat or down. So it’s created huge market distortions, and I think eventually this will be resolved by a massive deflation in asset prices.”
Read more from Marc Faber:
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