If the conflict dissolved tomorrow, I would buy Indian shares and not US stocks: Marc Faber
We are seeing that war between Russia and Ukraine and the effect it has on the energy market. There’s the new oil shock and that is impacting equity markets. What is your view on that big global trigger?
I think the recent decline has been expected by numerous observers because the economy in the US is not doing particularly well. We have artificially low interest rates in Europe and in the US and in most other countries. The rate of inflation in the US is between 6% and 12% depending on the person, depending on the household. And the Federal Reserve is still discussing whether they will increase interest rates by a quarter or a half a percent! In the ‘70s when inflation rates were as high, we had the Fed rate of over 8%. So it shows there is a disconnect between the Federal Reserve and the real economy.
Then we have these geopolitical problems and in every speech I have been giving, in the last few years, I have said that in investments one proviso for success at the present time of relatively high valuations is peace in the world. And now this peace in the world is no longer guaranteed. A journalist who is well known in the UK said the conflict in the Ukraine is the most useless conflict we ever had. There is no reason for either side to go to war and this would be essentially my opinion that this war is not about freedom of Ukraine and people or anything, but it is designed by some neocons in the US and some people that are interested in war and Russia that is more belligerent and does not like this NATO expansion.
So anyway, this conflict has now been used as an excuse to knock down markets which were as I explained before essentially stretched, overvalued and vulnerable to a setback because of tightening monetary conditions.
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