Marc Faber – 2013 Gold Price Prediction

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 Will a financial collapse come about in 2013? Marc Faber gives his advice for gold and silver stackers and some economic forecasts.

Marc Faber is the publisher of the Gloom Boom and Doom report and often shares his recommendations in interviews regarding the financial markets. He believes equities will fall 20% in the short term in most countries, except Japan, Vietnam, China due to their underperformance over the past few years. He was also asked about bonds? He says they could rally from here because they’re oversold, we could have seen the lows but he would not buy US treasuries. Other questions asked include what do you see the price of oil going to in 2013 and is Apple stock (AAPL) overvalued? Will the price crash or correction continue?

The Government Debt since 2007 has increased by more than 6 Trillion Dollars

David McAlvany : As you say, things are not evenly distributed. The misery index has, over the 5-year period from here going back to about 2007, gone from 7½ to 9½ . We have had, as you said, median household income decline from just shy of $55,000 to $50,000. People’s primary asset, the median existing home, has declined. When we look at consumer confidence, this is where we see something of a divergence. Where do you see this divergence between the S&P and consumer confidence taking us?

 
Marc Faber : In principle, it is possible that as a result of rising stock prices and recovering real estate prices, confidence will increase somewhat, but I have to go back to what life is for the typical household, and what life is for the holders of capital, in other words, the 1%, or ½% of the population. For the typical middle class, the standard of living is not going up because the insurance costs are going up, healthcare costs are going up, taxes are going up. Everything is going up in price, but employment has improved.
But then, if we decompose the improvement in employment, and we analyze what kind of jobs people get, then the jobs that are being created are mostly low-paying jobs, and the jobs that were lost were high-paying jobs, so I don’t think we should just look at the number of jobs.
In the meantime, I also need to mention that the government debt since 2007 has increased by more than 6 trillion dollars, and we have deficits of around 1 trillion dollars. Having these deficits will become, one day, a problem. They may not seem a problem now because the Fed basically finances the deficit through the purchases of assets, but will they be able to do it forever? That is the big question mark.
 
So if you want to boost equity prices, or asset prices, print that much money. But as I just tried to explain, you don’t create wealth in a nation by boosting asset prices. You create wealth through employment and capital investment in factories, in infrastructure, in education, and in research and development.
– in a recent interview with McAlvany – Click here to watch the full interview >>>>>>