Marc Faber Thoughts

"American economists’ high esteem of consumption as the motor of economic growth has a long tradition dating back to the early 20th century. The continuous drive to boost consumption has led to Affluenza, an All-Consuming Epidemic, which is accompanied by an unprecedented array of escalating imbalances: ever-declining personal savings; a large fiscal and current account deficit; exploding government and consumer debts; and, a protracted shortfall in business fixed investment, employment and available real incomes. The current mantra of “selling” emerging markets and “buying” the US is likely to disappoint even if the US stock market continues to outperform. After all, the out performance may arise from US equities declining less than emerging stock markets. In this context, I should like to point out that the late May/June sell-off has been extremely benign by historical standards and that far more downside volatility is likely to occur in the months ahead".