Dr. Doom, Marc Faber, says global financial markets have run aground. The Xinhua News Agency (China) wrote yesterday:

The world financial market will stay at low levels for a long time to come, and government injection of capitals into the market will not help, Swiss financial guru Marc Faber said on Tuesday.

“We’ll stick at this low point for a long time. Anyone who thinks that everything will soon be rosy again is naive,” Faber, known as Dr. Doom for his prophecy of earlier economic crises, told the Swissinfo news website in an interview.

According to the investment adviser, no single catalyst could lead to a new bull market in the world.

He said government injection of huge capitals into the market could not actually save the market. To the contrary, those state measures can cause massive budget deficits.

Other measures have increased market volatility. On Monday, Greg Brown from the Internet news site Newsmax wrote:

“Now that deposits are guaranteed, basically I as an investor have no incentive to hold equities, so I sell them and put my money in bank deposits,” Marc Faber, author of the “Gloom, Doom and Boom Report,” told CNBC Monday.

“The interventions, they actually have increased volatility. It’s impossible to forecast market movements when you have interventions,” Faber said.

The Swiss-born investor, who is now based in Thailand, sees inflation down the road for the United States. From the Xinhua piece:

He added he fully agree with the view that there would be a U.S. state bankruptcy.

“The U.S. government will in future have new debts of at least 1 trillion U.S. dollars,” he said.

“That’s on top of the current state debt of 10 trillion U.S. dollars. And that doesn’t take into account state programs to stimulate the economy,” he added.

According to Faber, the U.S. government will in future have no other choice than to print money, which in the long term will lead to inflation.

Sources:

“Swiss financial adviser sees hard times ahead for world financial market”
Xinhuanet.com (China), October 28, 2008

“Faber: The Bailout Is the Problem”
Greg Brown
Newsmax, October 27, 2008

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