Dr Doom (Marc Faber) long-term bullish on gold, bearish on stocks, but expects decent bear market rally.
FLOTSAM AND JETSAM: A Collection Of Crimes Follies And
Misfortunes
- The Blue Team's Dr. Marc Faber
"...the only way for the very poor to fight us and
defend themselves is with terrorist attacks and
guerrilla warfare; actions I certainly don't support,
but which, given the circumstances I have just
highlighted, I can understand. The problem is really
that we have created a world in which far too many
people - at least a billion of them - have nothing to
lose except their (mostly miserable) lives. They are
disenchanted with our Western society and the way we
have treated them.
We may be at the dawn of a new era in warfare, whereby
future wars may involve not political power blocs
fighting each other over territories, but the
disenfranchised poor fighting by means of terrorism,
piracy, crime, and urban guerrilla activities for
whatever they might consider to be their rights and for
a larger share of the world's economic pie.
In this situation, to retaliate against whoever was
responsible for the attack would only remove one symptom
of a very unbalanced and largely impoverished world,
which is increasingly suffering from a malaise. To
combat successfully future disastrous attacks on our
civil liberties will require much more than just
military retaliation. It will require us to think more
carefully about how we can strike a balance between
progress and wealth in our Western and highly developed
civilisation and the large number of destitute people in
the world who have no other means to fight and express
their grievances than through acts of atrocities.
Moreover, just taking out the leader of the recent
attack may only increase his status to that of a martyr.
Other terrorists, guerrillas, freedom fighters, or
whatever we may wish to call them, will then follow in
his footsteps and see to it that history continues to
be, as Voltaire observed, "a collection of the crimes,
follies and misfortunes" of mankind.
From an economic point of view, the recent events can
only be negative. Often, the purchase of equities in a
crisis is rewarding and, based on the experience of the
Gulf War in 1990, investors will be tempted to buy into
any weakness.
But I am afraid that, in this particular case, the
crisis may lead to further social and geopolitical
tensions and, when combined with the anti-globalisation
movement, to less trade and a more protectionist agenda.
It will probably also lessen foreigners' enthusiasm for
US assets and weaken the already wobbly dollar.
In turn, if tensions around the world increase, as I
think they will, gold and gold shares should benefit.
Having said that, the present crisis occurring at a time
when the stock markets around the world are already
moderately oversold may lead to a late September/early
October low from where a decent bear market rally could
take place..."
Addison Wiggin,
The Daily Reckoning
P.S. This excerpt was taken from Dr. Faber's Gloom, Boom
and Doom Report. A longer, more detailed, version
appears on the Daily Reckoning website: |
