Marc Faber am 11.11.

verfasst von Emerald, 12.11.2004, 05:56

-->arc Faber Ltd.'s Faber Comments on U.S., China, Crude Oil
2004-11-11 09:36 (New York)


By Stuart Wallace
Nov. 11 (Bloomberg) -- Marc Faber, who oversees $300 million
as managing director of Marc Faber Ltd., comments on the U.S. and
Chinese economies and oil and copper prices. He was speaking at a
Deutsche Bank AG conference in London.

On oil prices:
``Total oil consumption in Asia today for 3.6 billion people
is 20 million barrels'' a day.
``Based on past trends and based on the very low energy use
we currently have and the trend of going from a bicycle to a
motorcycle to a car, toward urbanization, for sure Asian oil
demand will double from 20 million barrels.
``Oil prices have risen significantly. In my opinion, if you
dream that oil prices will ever again go down to $12, I don't
think it will happen. This is over for good. From here onwards,
oil prices will be higher.''

On U.S. spending and economic growth:
``This expansion in terms of spending since 2001 has been
driven by a credit expansion and asset inflation and not by a
rise in capital spending, which today is still lower than in
2000, and industrial production has just exceeded marginally the
1999 high.
``But a lot of industrial production figures are related to
consumption, like electricity production or refinery production
or movement of railroad cars.
``Hourly wages are rising at the lowest level ever and real
wages, even with the doctored consumer price index that is being
used in U.S., even then, real wages are negative.
``In America, we've had an expansion since 2001, but the
quality of the expansion has been horrible. It's been driven by
credit and not by net capital formation leading to higher
industrial production and higher employment.''

On commodity prices:
``If you adjust commodity prices for inflation, then in the
years 1999 to 2001, commodity prices were at their lowest level
ever in the history of capitalism. So despite the recent rise
they're still relatively low.
``One sector that would appear to be very attractive would be
the agricultural sector - wheat, corn, soy beans, sugar, coffee.
``We are in a major up-trend for commodities, but the
commodity cycle in the 1970s lasted until 1980. But some
commodities like corn, wheat and sugar peaked in 1973, so you
will have to live with a lot of volatility.
``If you have rising commodity prices, the environment for
financial assets, especially bonds, is not particularly
favorable. The best time for financial assets is declining
commodity prices.''

--Editor: Buckley

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• Marc Faber am 11.11. - Emerald, 12.11.2004, 05:56