Checking In On Marc Faber’s 100% Certainty of Another Recession

Back in May of this year, Marc Faber, a famous “doom and gloom” name in the financial world stated that his certainty of another U.S. recession is 100%. Faber is often referred to as Dr. Doom, though that title is more famously used for Nouriel Roubini. Faber’s theory was based on the slowdown in China and India, and that another global economic recession would soon follow. Of course that is nothing compared to Robert Wiedemer (who called the 2008 recession) who feels that stocks could be poised for a 90% drop around the world.

Its been nearly three months since Faber made his remarks regarding the global economy, so we thought we would check in on the U.S. to see if any trends have developed thus far in 2012 [for more economic news and trends subscribe to our free newsletter].

U.S. GDP growth has sank from 3% to 1.5% over the last three quarters and there is no need to mention our towering debt piles, as those have been well-documented for quite some time. Our unemployment rate has risen from 8.1% to 8.3% since May (though it should be noted that actual unemployment is in the range of 15%), and domestic industrial production has dropped since May (though levels are still higher than they were earlier in the year). Retail sales had been weak for the summer, but this week’s report showed a major increase in consumer spending which could be a sign of increased consumer confidence. Inflation has fallen off significantly from 2.3% in May to just 1.7% the last two months. In short, economic indicators are all across the board, making it difficult to say whether or not we are truly in a recession.

Of course, all of these figures may be obsolete if a third round of quantitative easing is announced, as it would dramatically shake up our economy; if the program works, stocks will rise as will key economic indicators, if it fails we will simply bury ourselves deeper into a hole with a devalued currency and a complete lack of confidence from consumers and investors [see also Four Commodities To Buy Before Roubini’s “Perfect Storm”].

From a financial standpoint, stocks have had a strong year. The S&P 500 has jumped by nearly 11.8% as markets have charged higher throughout the majority of 2012. For many, this is really the only stat that matters. As long as stock markets continue to perform well, investors likely won’t be arguing about a recession or not. But of course, it remains to be seen if equities can maintain their momentum, as the past few weeks have been relatively rocky.

All in all, calling ourselves in a recession currently is factually inaccurate, but whether or not we are heading into one is a different story. All it takes is two consecutive quarters of GDP contraction, and we are right back where we started. For now, investors will ride out the storm as best they can until markets decide which way they will be heading for the future. So what do you all think, are we heading towards a recession or is Mr. Faber a bit brash on his bold prediction?

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Disclosure: No positions at time of writing.

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Commodity HQ is not an investment advisor, and any content published by Commodity HQ does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities or investment assets. Read the full disclaimer here.

22 Responses to “Checking In On Marc Faber’s 100% Certainty of Another Recession”

  1. [...] Jared Cummans: Back in May of this year, Marc Faber, a famous “doom and gloom” name in the financial world stated that? his certainty? of another U.S. recession is 100%. (…)Read the rest of Checking In On Marc Faber’s 100% Certainty of Another Recession (INDEXSP:.INX, SPY) [...]

  2. Anonymous says:

    Surly later someone will pay for the Federal Reserve printing press policy of quantitative easing and the ensuing bubble in the stock market , and after that, commodities. The only reversal of this calamity is a return to the gold standard. I read something yesterday, that the federal reserve is accepting gold as a first tier equivalent asset for purposes of payment, it seems to be an admission that the underlying presumption that is integral with a gold standard. Helicopter Ben must be on his way to concession.

  3. [...] Commodity HQ:  Jim Rogers: Silver is a better investment than gold; Checking in on Marc Faber’s 100% certainty of another recession [...]

  4. [...] Are we in a recession at the moment? Not really, but you will see that there are a couple of points to consider in the full article you can find below by clicking the link to Commodity HQ Checking In On Marc Faber’s 100% Certainty of Another Recession [...]

  5. [...] and more people have hopped on the bandwagon of a world-ending crisis, be it a natural disaster or economic crisis. But while some people may be sitting around merely talking about the possibilities of all of the [...]

  6. [...] but also from his outspoken and often controversial views. Faber has recently predicted a 100% chance of a U.S. economic recession and says that he is simply waiting for things to fail. To put things lightly, he is something of [...]

  7. [...] As Chairman, Bernanke has faced loads of criticism for his actions to jumpstart an economy that has been struggling for the majority of his time behind the wheel. Bernanke took office in 2006 under President Bush [...]

  8. [...] and navigated the current financial fiasco. Along with the fact that he feels our nation as a 100% chance of entering another recession, the doctor has yet another warning for investors out there; don’t store your gold in the United [...]

  9. [...] and navigated the current financial fiasco. Along with the fact that he feels our nation as a 100% chance of entering another recession, the doctor has yet another warning for investors out there; don’t store your gold in the United [...]

  10. [...] and navigated the current financial fiasco. Along with the fact that he feels our nation as a 100% chance of entering another recession, the doctor has yet another warning for investors out there; don’t store your gold in the United [...]

  11. [...] as he feels that our overwhelming debt levels and upcoming fiscal cliff will propel us into another economic spiral. “It’s coming” he has warned, stating that 2013 and 2014 will be worse than the fallout we [...]

  12. [...] as he feels that our overwhelming debt levels and upcoming fiscal cliff will propel us into another economic spiral. “It’s coming” he has warned, stating that 2013 and 2014 will be worse than the fallout we [...]

  13. [...] kamikaze monetary policy” said Schiff. Mr. Schiff went on to state that he feels that what our economy truly needs is less money printing and higher interest rates, although Bernanke’s pledge to keep rates at [...]

  14. [...] and navigated the current financial fiasco. Along with the fact that he feels our nation as a 100% chance of entering another recession, the doctor has yet another warning for investors out there; don’t store your gold in the [...]

  15. [...] apart by gaining 12.7% in the trailing year where most of its competitors have actually seen their stock prices shrink. Like so many others on this list, AUY’s quarterly growth numbers have been weak, but its [...]

  16. [...] now everyone is familiar with Ben Bernanke and his money printing strategies for solving an economy in crisis. His ideals concerning increasing the money supply stem from his research on the Great Depression [...]

  17. [...] now everyone is familiar with Ben Bernanke and his money printing strategies for solving an economy in crisis. His ideals concerning increasing the money supply stem from his research on the Great Depression [...]

  18. [...] now everyone is familiar with Ben Bernanke and his money printing strategies for solving an economy in crisis. His ideals concerning increasing the money supply stem from his research on the Great Depression [...]

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  20. [...] but has suffered some reputational loss seeing as it also had some funding issues back during the financial crisis. Its underlying assets are arguably worth well more than the current stock price and the dividend [...]

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