Respected investment icon Marc Faber said he’s “not so sure” a Hillary Clinton presidential victory would give a boost to stock markets, so he’s urging savvy investors to stock up on gold and other “hard assets” just in case the nation wakes up with a financial hangover after one of the most contentious White House races in modern history.
“The belief is obviously that a Trump victory would be negative for asset markets, for the US market, and that a Hillary victory would be positive. But I am not so sure about this belief for the simple reason that Hillary is basically a neocon and a warmonger,” Faber, editor of the Gloom, Boom Doom Report, told CNBC-TV18.
“She has invaded or supported the invasion of variety of countries already. So, that may lead to more international tension. Whereas Trump is more aware of the fact that the U.S.' superpower standing is gradually waning and that other countries are coming up and that U.S. cannot fight and be the policeman of the whole world,” he said.
He doesn’t think the Federal Reserve will hike interest rates before the election because central bank officials don’t want to jeopardize Clinton’s chances, because Faber agrees with Trump’s allegations that the Fed is very politicized.
Fed officials “are supporting Hillary Clinton as incidentally as the entire media establishment is support Hillary Clinton and is anti-Trump,” said Faber, a Swiss investor who is famous for making gloomy market forecasts.
In general, Faber obviously doesn’t hold much optimism for investors.
“The returns over the next 5 or 10 years will be very disappointing to you because you expect to make between 8 and 12 percent on your portfolio every year. That is simply not going to happen,” he said.
“I am spending a lot of time thinking that the current financial system, that we can all agree is not sustainable in the long run. The big question is how will it all unwind? Will it unwind with a breakdown of democracy, with a breakdown of law and order? We just do not know,” he said.
“But one of the potential significant problems that may occur is what the Fed and other central banks actually wish for and that is inflation. There is a good chance that commodity prices have bottomed out and that inflation in general will accelerate. In other words, people’s cost of living will start to go up more than what is desirable. And that will depress real earnings, but it will be good for assets such as commodities, especially precious metals,” he said.
“Obviously, very negative for bonds and probably negative for equities when yields go up. So, I want to own some commodities,” he said.
“If you come to me with $1 million, I am not going to put it all in gold and gold shares, that would be irresponsible. But I would tell you, maybe you should have at least 25-30 percent of your money in an asset that cannot be printed by central banks,” he said.
However, other market pundits, naturally, have somewhat more optimistic views about the U.S. economy's future than Faber, also known as "Dr. Doom."
CNBC’s Ron Insana explains that America is already great, but he does admit the nation has many problems, “and some serious ones, problems that need intelligent fixes.”
Insana recently told the opening General Session of the National Conference of State Legislatures that “the November election stands as a big uncertainty for the economy. It’s like nothing we’ve ever seen.”
Who wins the presidency, he added, is not as important as what happens after all the ballots have been counted.
“Can we find a way to move forward in cooperation around areas like infrastructure and not making policy mistakes,” said Insana, the author of four books on Wall Street. “The U.S. has outpaced the rest of the world,” Insana said. “We have $90 trillion in household net worth. We are outgrowing the rest of the world," he said.
“The country is great and has been great,” he added. “We have problems and some serious ones, problems that need intelligent fixes.”
(Newsmax wire services contributed to this report).
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