Though he might have some bearish sentiments, it’s not all gloom and doom with Marc Faber. The colorful Swiss investor checked in on Bloomberg Television’s “Street Smart” Friday to offer insight on the markets and where the Fed is headed with quantitative easing. Notably, Faber said he doesn’t believe everything Ben Bernanke says and likened such a belief to a schoolchild’s belief “in Father Christmas.” He also weighed in on gold and the potential problems with emerging markets.
Faber, who publishes GloomBoomDoom.com, told the hosts of “Street Smart” he doesn’t believe the Fed Chairman is putting all his cards on the table and likely won’t be backing off quantitative easing any time soon.
“If you say that if he means what he says, then you believe in Father Christmas,” Faber said with a grin. But he also noted that investors should listen carefully to Bernanke’s words.
“He said if the economy does not meet the expectations of the Fed in one year’s time, they will consider additional measures. In other words, if the economy has not fully recovered by mid-2014, more QE will be forthcoming.” Faber considers that “if” a given.
“We are going with the Fed to QE99,” he said, a reference to the numbering of bond buying, which began with QE1 in 2009. Faber said not to expect much more growth in S&P, though a short-term bump is possible, and expressed concern about what’s happening around the world.
“The emerging economies are not performing well,” he said, noting “we have big trouble coming” from the impact of China’s slow growth. Faber said that if the situation doesn’t improve abroad, “corporate profits…will disappoint and stocks won’t be the best investment.” He added he could feasibly see the S&P 500 drop by 20 to 30 percent, in a comment worthy of doom and gloom. Faber wasn’t quite as skeptical about gold, however, noting that bears always exist in the market.
“They were bearish about gold at $300,” he told the hosts of “Street Smart.” Faber reiterated he’s going to continue buying gold — no matter the price — because he likes having physical assets. “I don’t want all of my assets in financial assets.”