Wednesday, April 25, 2012


International Financial Expert Marc Faber Warns of Imminent Stock
Market Crash, China Recession and U.S. Catastrophe Fiscal Condition!
 Marc Faber Warns of Imminent Stock Market Crash, China Recession and U.S. Catastrophe Fiscal Condition!
April 24, 2012
Best Financial Markets Analysis ArticleInquiring minds are listening to Marc Faber on the global economy.
Faber says China faces a recession defined as a slowdown to 3%.
Interestingly, 3% is the same long-term target that Michael Pettis at China Financial Markets has come up with. Indeed Pettis has made two bets with the Economist over growth rates and when Chain will surpass the US in terms of GDP. WATCH THIS VIDEO ASAP:
The Economist says China will pass the US up by 2018. Pettis and I say no way. Pettis also says China will average 3.5% or less growth for the rest of the decade. I agree with Pettis.
For details of the bet and my thoughts, please see 12 ...
Faber does not believe China's GDP as stated now, and neither do I. Both of us think China has hugely understated inflation.
However, Faber sees chance of serious inflation in the US. I don't. Faber narrowly focuses on money supply and ignores credit. And credit will collapse once again if the US heads back into recession as Faber thinks. Indeed credit has at best held steady in this recover, after one corrects for student loans.
Please see The Real Consumer Credit Story: ...for a discussion.
Since credit dwarfs money supply, odds of significant inflation in the face of negative credit growth is not high. Those betting on high inflation or hyperinflation have simply been wrong, and will continue to be wrong until Bernanke reignites bank lending.
Given capital constraints on banks, consumer needs to deleverage, boomers heading for retirement with insufficient savings, and businesses reluctant to expand, Bernanke is fighting a losing battle and will be for quite some time.
By Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.comClick Here To Scroll Thru My Recent Post List
Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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