Tags: faber | recession

Faber: Recession Will Last Five to 10 Years

By    |   Monday, 29 Dec 2008 09:37 AM

Investment guru Marc Faber says economies around the world may stay in recession for five to 10 years.

“We’re faced with a global recession that will last for a very long time,” he told Bloomberg TV.

“Recovery won’t come until maybe in five to 10 years time. I think 2009 will be catastrophic.”

The massive easing program implemented by the Federal Reserve will end up hurting the economy, Faber maintains.

“It’s hard to believe that after blowing up so many bubbles over the past couple years, the Fed is managing to blow yet another bubble,” he says.

“Thirty-year Treasury bonds are yielding about 2.5 percent. You would have to assume that over the next 30 years there will be no inflation problem” to make those yields attractive.

Given the expansionary fiscal and monetary policy of the United States, “there will be a time when inflation accelerates along with a weak dollar,” Faber says.

“When that happens, central banks will have to increases interest rates, which will be difficult to implement.”

Faber says the U.S. stock market became oversold Nov. 21. But the S&P 500 index has rebounded 20 percent since then.

“So the market may rebound more, but then it will drop again,” he says.

Ron Rimkus, a money manager for BB&T, also sees stock weakness amid the recession.

“We’re going to have to start looking at these earnings reports, and we’re going to have to deal with the ongoing, severe recession,” he told Bloomberg TV.

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Investment guru Marc Faber says economies around the world may stay in recession for five to 10 years.“We’re faced with a global recession that will last for a very long time,” he told Bloomberg TV.“Recovery won’t come until maybe in five to 10 years time. I think 2009 will...
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Monday, 29 Dec 2008 09:37 AM
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