Marc Faber’s Latest on Banks, U.S. Equity Valuations, Gold

The humble and wise Mr. Faber talks to Bloomberg TV. Highlights:

  • “Quite a lot” of technical support on the S&P 500 at 1045
  • Stocks are oversold near-term
  • “Quite happy” to hold physical gold over other asset classes
  • There was no real recovery, look at tax receipts — they are lower YoY
  • June/July rally is likely, but won’t go above major resistance at 1220
  • Market will probably be lower by late Fall 2010
  • Fed will use strong bond market to ease “massively”
  • Banks worldwide would be “gone” if not for massive government support and easy money
  • Still very bearish on U.S. economy long-term, due to banksters ruining economy (my slightly-biased take on what he said)

Meltup: A Must-Watch

Meltup: The beginning of a U.S. currency crisis and hyperinflation. Put together by the National Inflation Association.

Bernanke’s long-term perspective

This is old (2008), but I thought it was worth another look in light of recent events.

Citigroup trader spills latte on ponzibot, causing 10% drop

That’s the official story, for now. But what a schizo day in the markets. I suspect there is a catalyst at play we’re not aware of yet. Something nasty coming down the pipeline.

Does anyone really believe this panic was caused by a simultaneous collective realization that the EU is in deep sh*t?Anyone who follows business and has a frontal lobe has known this is coming for the past 12 months (expect a similar American crisis within 2-5 years, with similar levels of seashell-collecting until the tsunami hits).

Point is, this can’t be all EU/Greece scare. Lots of potential issues to ponder here. Off the top of my head, here’s three:

  • Banks may actually be forced to bring all that toxic sh*t back on their books, and they’re not happy
  • Another unknown in the Financial reform bill (possibly breaking up the TBTF crew)
  • Bad Spain/Italy/Portugal news coming soon (hidden debts maybe)
  • German voters reject Greece bailout package

Whatever the cause, it was a hell of a day. Stocks crashed, dollar soared, and gold skyrocketed. What’s wrong with this picture? Gold pops 3% on a day where the dollar is up almost 1%? Not your typical action to say the least.

Pondering Gold’s Future

I think this could be the start of a big move up for gold.  Yesterday David Rosenberg made a  $3,000 price call, saying it should hit that in the next few years. Targets like that were laughed off just a year ago.

Now even people who don’t follow metals are telling me about $5k gold. Could be a contra-indicator, but I don’t think we’re there yet.  I’d guess 95% of investors have zero exposure to gold, through bullion or miners.

Plus, I am convinced that the Fed will be forced to re-start the printing presses very shortly. And when it does, gold’s going to go even higher. Forget about Fed tightening. They can’t/won’t. Too much political risk, as the situation could get ugly temporarily if they stopped pumping. That’s my opinion, anyway. Take it with a healthy pinch.

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