Dr. Doom, as money manager Marc Faber is known, has turned into Dr. Boom. He expects global stock markets to mount strong recoveries soon.
“What you could see in the next three months is a very strong rebound in asset markets, in equities, followed by a selloff in bonds and eventually a selloff in the dollar,” he told CNBC last week.
Most asset markets are “terribly oversold,” while the dollar and U.S. Treasuries are overbought, Faber says.
“Right now we have deflation, we have colossal deflation in asset prices," with stock markets around the world having lost $30 trillion in value over the past 13 months, he points out.
And what’s going to cause the bounce-back? Fiscal and monetary stimulus — the huge amount of money that governments and central banks are throwing at the economy and financial system, he says.
Once people go back into financial markets, the move will probably be "stronger than people expect," as financial institutions’ coffers are now full of cash that they have been so far unwilling to invest, Faber maintains.
Some experts say Barack Obama’s appointment of Tim Geithner as Treasury Secretary will help spark a market recovery.
“This news could really give the stock market a badly needed shot in the arm,” Chris Rupkey, chief economist at Bank of Tokyo-Mitsubishi in New York, wrote in an e-mail to clients.
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