Marc Faber, also known as Dr Doom for his pessimistic views, said that it is dangerous to short the US markets given the uncertainty over the extent to which the central banks will print money, adding that the way to play it is to own the emerging markets.
Renowned investor and advisor Marc Faber has suggested that the newly-elected US President Donald Trump’s policies are rather good for the emerging markets, contrary to the popular sentiment that such policies will restrict trade from the emerging economies and hurt them.
“Everyone makes a big hoopla on the US markets going up this year,” Marc Faber said in a TV interview to CNBC’s Squawk Box. “We are up 4.66%, (while) Hong Kong is up 9%, Singapore is up 9%, Mexico is up 6%, and Brazil and Argentina are up 20%,” Marc Faber said to drive home the point that Trump’s policies were “quite good” for the foreign markets.
Marc Faber, also known as Dr Doom for his pessimistic views, said that it is dangerous to short the US markets, given the uncertainty over the extent to which the central banks will print money. “If you print money and have big deficits that lead to higher government debt then stocks may go up and economic conditions worsen,” he said, adding that one may short very specific names. “Overall I think the way to play it is to own the emerging markets,” Marc Faber said.
Trump has been on a protectionist rhetoric calling China as a currency manipulator, pulling out of a 12-country Pacific Rim Trans-Pacific-Partnership (TPP) and signalling his intent to renegotiate the NAFTA (North American Free Trade Agreement). However, Marc Faber was unfazed on how that would affect Asian markets, saying that in view of Trump’s statements, Asia will push harder for a domestic-led growth and exports to China.
You may also like to watch:
“Everybody in Asia and around the world, including Mexico and the Europeans will say, ‘the US is no longer a reliable trading partner and no longer a reliable ally. We have to look after ourselves,’” he said to CNBC. “So the Chinese are pushing essentially domestic-led growth,” he added.
Marc Faber further said that Trump’s harsh tweets, would impact the Asian markets only in the short-term, for a day or so. “It is a Chinese-centric Asia nowadays,” he said, adding, “The exports of Taiwan, South Korea, to China are much more important than to the US. All the Asian countries for them, exports to China are the key, tourists from China are the key.”