`Vicious Circle on Downside’
Marc Faber, managing director of Marc Faber Limited and publisher of the “Gloom, Boom & Doom Report,” talked on Bloomberg about the outlook for the global economy.
In his opinion, 2009 will be a catastrophic year, with home prices, equity and consumption going further down. Industrial production slowing will led to less demand for row materials.
Which countries are most severely exposed?
In his views, economically dependent on manufacturing countries are most vulnerable as consumption will slow. Households have already begun reacting to the sharp market declines. Consumers globally suffer lack of confidence and growing fears for the future, so naturally, spending will be reduced to the minimum.
How long the recession will last?
The recession will spread at least from 6 to 12 months onwards. But the healing process may take much longer. Global economies will need years, maybe 5 or even 10, to recover.
“The new year 2009 will be a write off in terms of economic activities”, Marc Faber says.
His market advice since 2000 is quite accurate and he predicted the rise of oil, precious metals, other commodities and emerging markets, along with the slide of U.S. dollar since 2002. He states that there are few value investments available now, except for farmland and real estate in some emerging markets. In an interview for Fox News back in 2007, he shared his beliefs in a “imminent” market correction. His recent views are almost deflationary except for holding precious metals.
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