Mark Faber, PH.D. "Dr. Doom"
Mark Faber Limited
"What's Ahead This Year"

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JIM: Well, we’re at the beginning of a new year. A lot of people on Wall Street that this will be another good year for the markets, another good year for the economy: the goldilocks economy. Not all of us agree. Joining me on the program this week is Dr. Marc Faber.

Marc, I want to begin our interview with the Barron’s roundtable. And I’m going to read from the Barron’s cover. It said, “Call the cops, they almost came to blows this year.” I guess there was quite an interesting debate when you were in New York for the Barron’s roundtable, and I wonder if you might share some of that with us.

MARC FABER: Well, I mean it wasn’t that bad – and I’m very happy to be in on your program by the way, and I wish all of your listeners a Happy New Year – but obviously, some people have different views than others. And what always amazes me is how very well-to-do and intelligent US portfolio managers basically don’t pay much attention to the fact that in the US you have this rapid debt expansion, and you have the growing trade and current account deficits, and you have a weakening trend in the US dollar that is offsetting most of the gains that have been achieved in the stock market. So whereas the Dow Jones is at a new all time high at the present time, in euro terms it’s still down 34% compared to the year 2000. And as you know in gold terms it’s down more than 50% since 2000. So I’m always surprised that people can be so optimistic about investing in the United States when actually the record since 2000 suggests that investments elsewhere and in commodities would have done that much better. [2:35]

JIM: You know there was a line that Fred Hickey used and he said, “Goldilocks imbibed a bit too much liquidity.” Let’s begin with the goldilocks economy. Why do so many – in your opinion – on Wall Street think that we’re in the best of all worlds?

MARC: I think the principal reason is that we have very strong monetary growth, very strong debt growth, but that hasn’t translated into rapidly rising consumer goods prices. In other words, the prices of TV sets and of radios and so forth are not going up as much. But the point about debt expansion is that in the Austrian view, and the Austrian school of economists precisely, money supply growth and debt growth (credit growth) is inflation. Whether you then get it in consumer prices or in wages or in commodities, or in our case in asset prices, is irrelevant. And the Austrian school will precisely point out to the facts that between 1921 and 29, consumer prices didn’t go up very much, or wholesale prices declined at that time, and yet you had the Depression that followed the 1920s. And in Japan, between 1980 and 89, ahead of the greatest bear market that Japan experienced following 89, 2003 when the Nikkei dropped by 70%, you didn’t have consumer price inflation you just had asset price inflation in stocks and in real estate. And ahead of the Asian crisis in 97, we didn’t have consumer price inflation, we just had asset price inflation. And so the goldilocks crowd basically says, “oh, we’re in the best of all possible worlds because consumer prices aren’t going up and asset prices are going up and making people richer,” when they don’t realize that the asset price increases is precisely the bubble that one day will be deflated. [5:12]

JIM: You know the consensus at the roundtable was that markets will be up this year but not without some kind of violent shakeup along the way. And you wrote a piece recently, Marc, where you suggested that we could see possible asset classes correct this year. Certainly we’ve already seen it in commodities, oil and gold. Are financial assets next in your opinion?

MARC: I think that all asset prices have gone up dramatically since, you know, depending 2001, 2002, 2003, but basically we’re up everywhere. If I look around the world there are very few assets that are not expensive. And the big surprise for this year could be that liquidity tightens even if the central bank tries, say, to keep monetary policy easy, because if you look at the Middle East, suddenly all of the markets are down between 50 and 60%. There’s still plenty of liquidity. But the issue there is that liquidity growth slowed down – it didn’t accelerate anymore. And if I look at international reserves in the world they’re still growing at 18% per annum, but they’re no longer growing at an accelerating rate. So it could be that at some point in 2007 liquidity tightens.

I’d also like to make the point that when markets go up they create liquidity because [when] an asset goes from, say, 100 to 200, it increases the borrowing power of the owner of these assets. And when asset prices go down (and we’ve had an appetizer of that in April, May 2006 when suddenly the markets went down – suddenly liquidity dwindled)…And I think the big test for liquidity will come once there is a correction. And I think we’re by historical standards in one of the longest bull markets, which began in October 2002; we’re in a bull market that by historical standards is about average length in terms of magnitude; and since July 13^th 2006 when this latest leg in the bull market started we haven’t even had a 2% correction. Now, I lived through the 70s. In the 70s the markets moved sideways but every year the Dow went up and down by about 25%. And here we are and we haven’t had a 2% correction since last July. Something big is going to happen one of these days. And I would not rule out that markets may continue to go up, but as a buyer the risk now is actually quite high compared to the potential reward. It’s as John Hussman recently wrote that there are so few bears (from converting these very few bears into bulls) that the market will not get a lot of ammunition on the upside. But if suddenly so many bulls turn cautious or negative then obviously the downside can be quite substantial because people will liquidate their positions. [8:56]

JIM: Marc, it’s interesting though you’re talking about this liquidity and some of the disruptions that we have seen in various asset markets, the well respected Bank Credit Analyst in their forecast issue for 2007 has the headline which is Another Year of Riding the Liquidity Wave. Can central bankers pump out enough liquidity that maybe we can postpone this for another year or do we really get that lucky?

MARC: Well, I’m just writing about this in my Gloom, Boom & Doom report because basically the theory of the Bank Credit Analyst is that we are in a debt supercycle. Let’s say you take the debt supercycle you could say started in the early 80s when debt to GDP was 130%, we’re now at 330%, and this would be by accounting standards of the government – let’s say private accounting standards would put the debt of the US government at much higher levels because of the unfunded liabilities. But let’s say we’re at 330% - yeah, it’s possible we go to 400%, maybe to 500%. My point is – and I have here to also point out to another report that was written recently and titled Apocalypse Now. This report makes the point that this year we are in one of the most dangerous financial situations and that we could experience very serious setbacks: a) in the global economy and b) in asset markets. And to that I have to say, I don’t know when the supercycle in debt and credit will end. It will end one day. And one day you will have apocalypse. So if someone came to you and said, “Look, the brakes on your car are going to fail one day you have the option: do you want to fix them or doing nothing about it.” My view as an investor is it gradually doesn’t pay to be in financial assets. I think that all assets are vulnerable, but one of the least vulnerable is probably precious metals simply because in an inflationary cycle (which a debt supercycle would be) precious metals will do well anyway. And if the whole thing collapses it will be so ugly but you’d probably be happy to be in precious metals rather than in equities. [11:47]

JIM: You know, Marc, according to Austrian theory, you can avoid the day of reckoning by expanding credit faster and faster. In fact, Kurt Richebacher recently talked about how credit expansion has grown at a faster rate over the last 3 or 4 years, and especially when Mr. Greenspan began the most recent rate raising cycle. Is it your opinion that one of the key indicators to watch, perhaps, this year is what happens to credit growth because I know commercial and industrial loans have already begun to slowdown? Is this something to keep our eyes on this year?

MARC: Yes, I’m sure, but I think that the key issue to watch is actually the performance of the stock market – specifically the emerging markets. If the emerging markets start to perform badly after their strong outperformance it’s kind of the canary in the coal mine. In other words, that would be the first signal that liquidity is somewhat tightening. And so, of course I look at credit growth figures and so forth, but equally the performance of: emerging markets and in my opinion, the increasing performance of financial stocks, brokerage stocks. The subprime lenders have already collapsed, they’re signaling essentially bad times ahead in the housing market, and much worse time than people expect in my opinion. And the brokerage stocks are still in the sky, but I think that once the brokerage stocks and emerging markets start to break that would be a signal to be very careful. [13:44]

JIM: You have written and have pointed out that when asset markets deflate, so does liquidity. Does this spell deflation or do we get a spell of disinflation?

MARC: Well, I mean what we could get in my opinion, if you go back to say 1980, in 1980 the whole world was concerned about consumer price inflation. That’s why 30 year bonds went and had a yield of over 15%. When you think of it, if someone buys a bond at a 15% yield, then he has the expectation that inflation will run on average at 13% per annum for the following 30 years, because usually long term bond yields have a real return of about 2 to 2 ½%. And now the bond yield is say at 4.8% for 30 years, and so the expectations are for inflation to remain at 2% for the next 30 years on average annually. And I think the way people were wrong, essentially, to get out of bonds in 1981 when they were yielding over 15%, in the same way they are wrong to buy bonds at 2% real yield – the total (nominal) yield of 4.8%. Now, the issue here is, in 1980, inflation (or the symptoms of inflation because I call inflation money supply growth and credit supply growth) moved away from consumer prices into asset prices (stocks and bonds). And today, I think what could happen is that we would have deflation in asset markets but renewed inflation in consumer prices and in wages. That would be the worst [unrecognized] for say equities because what you will get is rising interest rates, rising inflation rates. And that would depress the valuation of equities: say, the earnings a) would go down and b) the valuations instead of the S&P selling at 18 times earnings, maybe only sell at 10 times earnings. [16:15]

JIM: I want to move on to the dollar. We’ve seen in the last couple of years, central bank diversification outside of the dollar but nonetheless we have Asian and OPEC trade surpluses that are close to $1 trillion a year. Where does the dollar go? If the dollar falls, how do you avoid inflation in the United States? In other words, you hear many on Wall Street and in Washington saying that the dollar needs to come down to fix our deficits. But if the dollar comes down and we import so many things into this country, how do you avoid inflation?

MARC: Yes, that’s precisely a point. But I’d just like to mention one point. First of all, the dollar has been weak since, say, 2000, and we’re down 60% against the euro. I think for the next, say, 3 months the dollar is rather likely to stay here or could even rally somewhat against the euro. That I wouldn’t rule out, because if my scenario of rising interest rates in the US is correct that would be supportive of the US dollar for now. But of course, long term you have to bearish about the dollar. But as I mentioned on previous occasions to be bearish on the dollar one has to define bearish about the dollar against what. And to that I just have to say, we have a US monetary authority – the Federal Reserve – that prints money, but in other countries we also have paper money, and they also print money. And so I’m not sure that the dollar will collapse against say the euro. I rather think that all paper currencies will depreciate against gold and silver. Because for gold and silver, the supply of these commodities cannot be increased at the same rate as the supply of paper money can be increased. And so from a logical point of view these precious metals will appreciate in value against paper money simply because there will be more and more paper money around in the world. And if I look at the financial situation of not only the US but of other countries as well, and also central bankers and their attitude, then I’m convinced that they will all print money. There’s no other way out of the [unrecognized]. [19:08]

JIM: Let me throw out a potential scenario this year where you see, for example, in the United States real estate continue to deflate, you see the US economy continue to slowdown, and then perhaps somewhere along the year we see the financial markets deflate. Under those circumstances, if it evolves in that way, could you see the next bout or wave of reinflation for the Fed. In other words, Wall Street and Washington cry out to the Fed to do something, and the Fed begins another inflationary wave.

MARC: Yes, I think that is quite likely. The only problem with this theory is that I believe that the next time that the Fed aggressively cuts interest rates to support asset markets that at that time the bond markets may not react in a friendly fashion. In other words, normally when you cut interest rates, bonds will rally. But in this particular instance when the Fed will cut rates I think bonds may turn and that may make the job of the Fed very difficult. [20:31]

JIM: You know, one difference I think the financial markets do not understand today is back in 2001, when the US economy went into a recession we had the attacks of 9/11. When the Fed eased aggressively we had oil prices at $20, gold was in the $250 range, copper was around 60 cents. If you fast forward to today, oil is around $50, gold is around $630, and copper is still in the $2 range. Doesn’t this present a problem for the Fed?

MARC: Well, actually, you’ve raised a very interesting issue because you have essentially the copper price going up and the oil price has declined from close to $80 now to something like $50. So we’re down substantially. But actually the gold price has been relatively strong compared to these commodities – particularly recently. In other words, the gold price has outperformed the CRB, outperformed copper recently. And so what does it tell you? Oil and copper are economically sensitive commodities, whereas gold isn’t. So if gold goes up against the other commodities it shows that the market is apprehensive about future inflation and about future depreciation of the value of paper money – specifically the US dollar. [22:14]

JIM: I want to shift to a wild card that is getting played up, and certainly it’s a subtle issue, Marc, and that is what is going on in the Middle East with Iran. We now have two US aircraft carrier battle groups (the Stennis and the Eisenhower) moving into the region; we have the Boxer strike force moving into the region. One can assume that these battle groups are not going into that area to do some sight-seeing for sailors. What are the possibilities that perhaps something happens in the Middle East this year as a precipitating event that triggers a market waterfall decline?

MARC: Well, I’ve written about this about 18 months ago. I think it is almost inevitable that either the US or Israel will have to bomb potential nuclear facilities within Iran. And I think the Saudis would be quite happy to do that. Now, whether it will happen today or in six months, or in 12 months time, who knows? But I think the probability of that happening has obviously increased.  [23:37]

JIM: In the end, as you have written about, and as many Austrians at least (and I consider myself an Austrian) and I think, we are heading towards hyperinflation in the US. And there are still a lot of people here that think deflation is ahead. I believe it is going to be hyperinflation. And let’s talk about that for a moment and perhaps the road map as to how this would unfold.

MARC: If the Bank Credit Analyst is right, and we have this debt supercycle in place, then I suppose that we will move towards hyperinflation. It doesn’t necessarily mean that consumer prices will go up dramatically. They will go up. And I think wages will go up. They will maybe go down inflation-adjusted, in real terms. But what could happen is that asset prices [have] intermediate very powerful corrections. I mean, the oil price is down from $78 to roughly $50, so it’s a big, big correction. So we’re going to have big corrections. And when these big corrections happen, especially if they touch housing or the stock markets, and in fact before they touch this kind of percentage decline of 40%, then obviously the Fed will ease and print money. That I’m [unrecognized]. So what you’ll get is essentially an asymmetrical monetary policy: you don’t do anything when asset prices go up – in other words, you happily print money and let credit growth continue. When asset prices go down, flush the system with liquidity to support asset prices. That of course is in the long run highly inflationary. [25:37]

JIM: You know, there is a myth here in the US, and as you and I are speaking, Helicopter Ben is on Capitol Hill. The perception in the financial markets is the Fed is an inflation fighter which is a myth. But given the choice between a declining economy and declining asset markets versus a strong dollar, it is my guess that the Fed will choose to protect the economy and asset markets. In fact, in this meeting today, the Fed has been warned to some extent to not consider rising wage inflation as something the Fed should react to.

MARC: I agree entirely with you. The Federal Reserve will print money – that I have no doubt about. The only thing that I have some reservation about is that everybody believes that when the Fed prints money asset prices will go up automatically – and that I’m not so sure. First of all, if you look at bull markets, then you have so-called group rotation – sector rotation – and it could be that the Fed prints money but home prices still decline and other assets go up, and in the commodities complex it could be that some commodities go down and others go up. So it will be still a difficult environment to navigate in terms of achieving superior performance without taking big risks.

Let’s say last year if you were in nickel, you did extremely well. You were up 150%. On the other hand, if say you were in Thai stocks you didn’t do particularly well, although the currency appreciated by 15%. So in a diversified portfolio of different assets you will have some that may not perform very well; and some will perform very well. And we’ve seen it actually already in the performance of hedge funds, where a lot of hedge funds lost money last year including one of the largest hedge funds: Goldman Sachs Fund. And Amaranth went bust. So I think the environment to make money is going to be increasingly difficult. All I can say is I’m not smart enough to be always in the right asset and so forth. Although, last year we were heavily invested in Vietnam and that [did] very well. But let’s say if you’re kind of the average investor, then I think that gold will do reasonably well for you. If gold drops 30% then I think the Dow Jones will be down 50%. Simply because if gold drops 30% then it means that liquidity has become extremely tight, and then obviously equity markets will go down. The second point that I’d like to make about equities that frequently you will hear, “well, the PEs are not all that high, but the earnings are very high.” And the whole world accepts the fact without questioning that – that when earnings go up stocks will go up. But actually, nobody has asked the question: is it not possible also that when stocks go up, earnings go up? Because corporations have financial assets (and today, the treasury operation is very important in every company), so when stocks and asset markets go up then the profits on their own position also go up and expand. So my impression is that every bull market also generates some profit gains for corporations. And when stocks turn down it generates losses for corporations, and then earnings go down. And I don’t think that the current level of earnings is sustainable. [29:49]

JIM: I want to talk about an intriguing investment theme. You have an emerging Asia that is industrializing, especially led by China and India. In the West, here in the United States, you have declining infrastructure. In fact, our Governor here in California is proposing this year $43 billion in new bonds to start addressing poor highways, transportation systems, schools, roads, bridges and infrastructure. In your newsletter a while back, Fred Sheehan wrote about the conversion from paper assets to tangible assets, but he also talked about infrastructure – and this is the theme I’d like to pick up on because I think it is an emerging theme.

MARC: Of course, if you put in infrastructure in China in the last 10 years then you have modern infrastructure, whereas the US has lots of its infrastructure from the period between the period of the 1930s and the 1950s. And I mean, I travel worldwide and I think a large portion of US infrastructure is appalling, especially when it comes to airports and the reliability of airlines and so forth. There are lots of statistics that show that actually for the consumer the airline industry in the US is a catastrophe. I mean it’s very seldom that the flight is on time, service is bad. When the plane lands until you get your luggage it takes much longer than in places like, say, Hong Kong, Singapore, or in Europe. And so overall, I would rate the infrastructure in the United States – at the expense of being called an anti-American – I think it’s appalling. And what concerns me even more is that the people are perfectly happy to accept it. I mean in Hong Kong or in Singapore if your luggage came as late as in the United States everybody would be complaining. In the US people are perfectly happy and live with that. And I think that this is kind of a system that shows very serious cracks. [32:13]

JIM: Several years ago, Marc, you wrote a piece about investing in long term waves. For example, US stocks in the late 40s and 50s and 60s; Commodities in the late 60s and 70s; Japan in the 80s; and technology, or US stocks in the 90s. Do you still believe that today an investor can invest in a long term theme?

MARC: Yes, I believe that. But obviously within a long term cycle you can have big fluctuations. Say, if you invested in gold in 1970 you did very well, but you understand, by the end of 74 gold went to $195, and by August 76 it was at 103. So you have to have the inclination and the patience to hold the wait through downturns. And you look at the price of oil, it went from $12 to $78 and now it’s at $50; maybe it goes to 40 or 45. But the fact is that every year the world consumes more oil than new oil reserves are discovered. And therefore it is quite likely that the oil price one day will be higher, especially if you print money – and the same concerning gold. I mean we’ve stopped more than doubled in the price of gold – we went from $255 in 2001, 730, and now we’re say at around 630 – so we’ve more than doubled. But I don’t think that this is now a major advance because inflation-adjusted the price of gold is still relatively low; and in my opinion, compared to the S&P 500, the price of gold is still relatively low. And I’m not saying this because I’m a gold bug. I’m just saying this because I look at different asset classes and then I try to figure out, in a world of inflated assets where nothing is cheap anymore, what is relatively good value. And relative good value, in my opinion, is still the precious metals. [34:31]

JIM: You know this is one thing that we have certainly seen since 2001, which is that we are transitioning from a market dominated by financial paper assets to a market that’s dominated by real assets. We saw it first in inflating real estate prices, but we’re also seeing it as you just mentioned, Marc, in rising gold prices, rising oil prices and rising copper prices. So it seems to me that this is something that can last well beyond where we are today given the fact that, as you have mentioned earlier, that central banks, not just here in the United States but around the globe, are depreciating and printing paper.

MARC: Yes, that is also my impression. But, as I said, even the things that are working in the long run they can have serious corrections on the way towards much higher prices. And right now, for the next 3 months, it is possible that asset markets continue to go up but they would go up from a very elevated level to cuckoo land. And I think anything you buy today in the stock market you can probably buy cheaper within the next 3 to 6 months. And maybe the correction is already getting underway now, because as I pointed out there are some tracks that are evident. First of all, the first one is the breakdown in the price of subprime loans. They have weakened substantially. The second one is some of the emerging markets have kind of shown signs of weakness. Not all of them – but sufficiently to warrant some caution. Thirdly, the break in commodity prices is quite important because don’t forget, from 2002 to 2006, everything went up at the same time. And so if one asset class like commodities goes down it raises some question mark about liquidity. And some liquidation in commodities could lead to margin calls somewhere else [and] also knock off stock prices. And lastly, I would just like to repeat once again we haven’t had a serious correction yet in the US markets. Neither in this since July 13 2006, nor did we have a 10% correction since the stock market started to rise essentially in October 2002, March 2003. These are unusually lengthy: these very low volatility upward trends in stocks. And I think that volatility will come back one day with a vengeance. [37:33]

JIM: So as you look forward, let’s say Marc, we were talking on December 31^st, to your best judgment where would you be putting money today looking 12 months out to the end of the year?

MARC: Well, I think when everybody wants to buy it’s not a very good time to be buying, and we are like in a buying panic for assets in a rush to get in. And I think the proven strategy is to be rather selling than buying. And as I pointed out, my feeling is that anything you buy today you can probably buy cheaper within 6 months or so. And so I’m actually selling, and I have a very large cash position. And it may surprise you I’m not bearish for the US dollar for now. Now, will that change in one week’s time, or two weeks time? Maybe. But right now, I don’t think that the US dollar has a big downside to it. I actually believe that the dollar could rally somewhat simply because I sense that there is some upward pressure on interest rates in the US that will be supportive for the US dollar. And I also think that international liquidity no longer expanding at an accelerating rate, so if liquidity just stays here it will probably stabilize the dollar.

And since you were mentioning that you also belong to the school of Austrian economics, as you correctly mentioned before, in the theory of Austrian economics you can postpone the hour of proof by printing money, but you have to increase the quantity or the rate of money printing and credit growth annually. The moment credit growth doesn’t accelerate anymore you go into recession. And I think maybe we’ve kind of reached that level. So the outcome could be a weak real economy. Let’s say for the typical US household economic conditions are not improving but you would still have inflation in some assets – not necessarily equities and real estate. But in some assets you may still have inflation because of Fed printing, and you would have essentially weakness in the bond market. The bond market wouldn’t like too much money printing. [40:06]

JIM: Marc, you spend quite a bit of your time during the year traveling around the world, and have done so over the last couple of decades. Given the extensive traveling that you have done, what would you say is the most important thing that you have learned from those travels?

MARC: Well, I think that if you go to a country once, you have a snapshot of that country but you don’t know how the country was 10 years, 20 years ago. Whereas if you go to a country then you see the changes. Let’s say, if you just go to China today, you’d be, “China, okay, it’s booming.” But if you had gone to China already in 1980, and in 85 and 90 and so forth, you have a whole film in front of you of economic development of China. And that gives you a better picture about the country; and you’re not misled looking at just one snapshot and say, “oh, hoorah, all is fine.” So I think that is an important lesson.

The second lesson is obviously that the world, 1970 to today – 35 years – has changed unbelievably. In 1970, IBM had a larger market capitalization than the entire Japanese stock market. You didn’t have a Chinese stock market; no stock market in Indonesia, in Eastern Europe, Russia. And you had communism, you were in the midst of the Vietnam War. Wal-Mart had sales of $44 million annually. And so forth.

And so if you look at the changes in the world over the last 30 years, and then you look forward and you think how will the world look like in 30 years it could be very different than today. And some industries will disappear and some companies will fold, and some countries will underperform and others will perform better, and so forth. And that is essentially the lesson of seeing the world that you have to realize: there are continuous shifts in the formation of wealth and in the economic geography. For investors, it is obviously important to be placed in the countries in terms of assets that have faster growth and better prospects than in the countries that are aging, and that may actually have more problems than others. [42:40]

JIM: And these decades of travel, what are your impressions of the United States? You’ve been coming here over the last two or three decades. What have you seen unfold here versus let’s say what you just described in China?

MARC: Well, I think that if you look at the US over the last 200 years, I suppose economically and politically the US probably reached a peak in the 1950s in terms of relative power – economic and political and military power. Then came the competition from Japan and South Korea and Taiwan. And it already hurt some industries like toys, textiles, garments. Then came the competition increasingly from China and from India and so forth. So if I look at the US say, 34 years ago, it was way ahead of some other countries. And in the meantime, it may still be ahead of some other countries, but the advance has narrowed very significantly. In other words, the other countries have developed at a much faster pace and may not have overtaken the US but may have narrowed the gap that has existed before. And now, the question is when they will overtake it? Now, some countries have probably economically already on a per capita basis. Now, I’m not saying Singapore is a more important economy than the US, but I’m saying that as a country in proportion to its population (the US has 300 million inhabitants, Singapore 5 million) Singapore is already richer than the United States. [44:32]

JIM: Well, Marc, I want to thank you for joining us here on the Financial Sense Newshour. I always enjoy reading your newsletter: The Gloom, Boom & Doom report. And as we close, why don’t you give out your website. And if our listeners would like to find more about your newsletter which I consider in my top 5, why don’t you do so.

MARC: Basically, I have a website called www.gloomboomdoom.com. All of the information is contained there. I have 2 things: the website, and that’s the monthly commentary that is shorter and less detailed; and then the written version of The Gloom Boom & Doom report which is more for say high net worth individuals, people that have time to read. Not many people have time to read. And so that’s why I have these two kinds of products.

I’d like to thank you also very much for having me on your show. And in general, I think we live in a very complex situation where asset markets are very stretched. They may go higher, but I think it’s not really worth the risk to invest heavily at this present time, simply because when everybody is so bullish as they are now what is the reward going to be – another 3, 5%, possibly, maybe 10%. The risk may be much more, maybe 30%. So I’m kind of more likely to be on the sidelines at the present time than say heavily investing in equity. [46:14]

JIM: Well, I agree with you, Marc. As always, it’s a pleasure to have you on the Financial Sense Newshour. I know it’s very late in Thailand, so I want to thank you once again for joining us on the program and I wish you a very healthy and prosperous New Year.

MARC: Thank you very much, and to you the same and your listeners as well. [46:20]