Saturday, March 2, 2013

Marc Faber March 2013 Market Commentary

Marc Faber has just published the Gloom Boom Doom market commentary for March 2013 entitled "I do not believe in a deflationary Collapse but I am afraid of it".

After telling investors to relax about short term volatility last month, he explains why he worries about the time when the current asset inflation will give way to a serious asset deflation, which has to happen eventually.

The decline in the gold prices concerns him, as it could mean we are about to enter a period of asset deflation. He stresses 2 points:
  • Uncertainty about the asset deflation timing. Most likely, different asset classes will deflate at different times and with different intensity. 
  • In a deflationary environment, financial assets (stocks, government and corporate bonds especially high yield bonds) would likely be the most vulnerable assets. That's why he can envision money flowing into a sound currency, and move out of fiat money. This is why he still continues to  recommend the gradual accumulation of physical gold.
This month market commentary comes with one attachement:
  • The Indian Budget & the Broken Window Fallacy” by Shanmuganathan “Shan” Nagasundaram. This report shows well-intentioned government plans may not have been as beneficial as thought, and it my have even hurt the ones it intended to help (poor people).
If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year.  

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