Marc Faber viewpoint concerning international investing during periods of high inflation and rising geopolitical tensions was put forward in his recent interview.  

“We have to understand there are cycles. The war cycles have been described in the literature for centuries already,” he said.

“Business cycles can go back to the bible about the seven fat years and seven lean years,” he added. 

“We have to understand there are cycles. The war cycles have been described in the literature for centuries already”

MARC FABER

Investors need to figure out where we are in these cycles, according to Marc Faber viewpoint

He noted that WW11 was relatively a peaceful period. But, he also cited 

Korean war, the Vietnam war, and the recent aggression of the US in Afghanistan, Iraq, Syria, Libya, and Yemen.

 Marc Faber viewpoint contradicts the west as no aggressive, Russian aggression, mainstream narrative. 

“There has been a strong pattern of aggression by Americans during the 1990s,” he said.  

Marc Faber viewpoint on business cycles in a bipolar world makes food for thought  

He noted that business cycle expansion in the US and Europe after WWII was the defining boom period. 

China opened in the late 70s but didn’t take off until the 90s, India took off, and the Soviet Union Fell apart in 89. “A lot of countries moved from a socialist model to a capitalist free market model,” he said.

“Global poverty rates fell.”

“There has been a strong pattern of aggression by Americans during the 1990s,”

MARC FABER

“So as China, India, and the former soviet union became prosperous, moving towards the capitalist model, the west moved towards Socialism. State ownership is disastrous for the economy. 

People look after their interests the most,” he said. 

The self-preservation instinct is the basis of capitalism, and that is why it has been relatively successful. 

But it is no paradise capitalism also leads to wealth inequality.

“The downside of money printing is that it distorts your economy, and penalties are high” – Marc Faber

Marc Faber’s viewpoint on the seven-year biblical cycle

He believes the biblical cycle is no longer relevant in the era of central bank currency creation, where artificial wealth is built.

“The downside of money printing is that it distorts your economy, and penalties are high. We are in the penalty phase, the correction of the expansion of asset values. September 1981 treasury bond yields more than 15% and we went to 0.5% in May 2020,” he said.

“We have been in a bull market in stocks since 1982 August, the market was no higher than 1966,” he added. 

Marc Faber viewpoint on 60 to 40 diversification

It does not work, he noted. The TLT (US treasuries with a maturity greater than 20 years) ETF peak was in MAY 2020 at 170 and we are down to 96″.  

Safe harbor is where investors lose the least. “If everyone drops by 50% and you are down 10%.” He thinks investors should avoid the most popular sectors in the bubble.

But if central banks can influence the biblical cycles through currency creation, then the illusion of wealth assets could outperform in the great pivot. Could the classic worst performers in 2022, be the best performers in 2023 and vice versa?

Doctor Doom Faber thinks otherwise. 

But Faber noted that the Fed printed in the 70s and they are doing it again. The Senate passed a $1.7 Trillion Spending Bill in December 2022, financed not through taxes but debt, which will be monetized. The Fed did the largest USD swap in history in November, a bank bailout through the backdoor. So with banks experiencing a credit squeeze and investors nursing heavy losses in 2022 it does take Sherlock Holmes to figure out who will be buying the debt.