Tuesday, January 26, 2016

Cool Head: Marc Faber Takes a Temperate Tone

As a Swiss, he is a bit of an anarchist, and here is some temperate perspective from Marc Faber:
I’ve lived in Asia since 1973. We had the ’73/’74 recession, the Hong Kong Stock Market went down 90%. We had in ’81/’82 a recession and markets sold off, property markets sold off. Then in the crash in ’87 the Hong Kong Share Market was closed for four days after it had declined by 50% in one day. Then we had the peak in Japan in 1990 from where the market went down 70% and so forth and so on. Then we had the Asian crisis and we had a bear market in 2003 and again the bear market in 2009 but Asia continued to grow.
I think the growth will now slow down, but Asia’s a big region, as is China. So you can have, like in the US, maybe one state is contracting like in the mid-’90s we had a property crash in California but the other states were still expanding. We can have some sectors in China, like steel and copper and heavy industries that are all contracting. On the other hand, there may be other sectors that are still expanding.
As you read the article, note how often this titan of prognostication says "I don't know..." and where he is sure it is "gold will fall, just not as fast..."

I'd love to co-write with someone a graph showing the productive capacity of USA over time, such as I roughed out here, but make it accurate and show how much the claims of defense, subsidies, welfare, education,  interest on the debt, etc there are on the productive capacity, AFTER the ownership claims of the capitalists upon that productive capacity.  I think it would be mind boggling, and graphically demonstrate something never before seen.  It is what Faber has in his mind as he keeps saying "who knows..."

But as I have said, all these people, even the good guy/anarchist commentators, are looking to park their  survivorship bias gains.

The only place to safely keep your assets for the next forty years at least is on loan to customers in the form of accounts receivable.  But this presumes first you have started a business.  In the import and export classes I teach (see links upper right on this page), a common element is the means of production already exist, just add customer.  I have sessions starting this week, email me if you want in.  I bill my students, instead of using bank credit, now.

Feel free to forward this by email to three of your friends.