Marc Faber: U.S. Economy has bottomed out, final collapse in 5-10 years

[coolhand]

Re: Marc Faber: U.S. Economy has bottomed out, final collapse in 5-10 years

The economy appears to have gotten markedly weaker in the last 4-6 weeks, post-expiry of the housing tax credit. Look what Toll Brothers said yesterday - 3 wks ago they said things were great. Since then, said last 3 wks deposits have fallen over 20%. Think you'll see some disastrous housing #'s next week. The ECRI leading indicator is cliff diving. Rosenberg has noted that in the past 42 yrs, when the ECRI leading index has gotten to -10, we've had a recession 100% of the time. It's at -5.7 today. As it is, that has been a sign of a coming recession 80%+ of the time. If we have a recession, the US deficit projections are going to implode.

This has always been EJ's case, but in his typical fashion, he conservatively estimated the next recession for 2012 or 2013...if it arrives in 2H10...holy crap...& that is why gold is running, IMO...smart money is beginning to hedge their bets v. the coming multi-trillion stimulus.

Congress can always blame hyperinflation on speculators

[Chris Coles]

Re: Marc Faber: U.S. Economy has bottomed out, final collapse in 5-10 years

"People who tell me about the big deflation in Japan, why don't they spend a day in Tokyo? It's still the most expensive city in the world," he added.

This seems strange to me.
Rents in Tokyo have in the last year dropped by 15 to 30 percent across the city. Our office moved to a better building across the street, and the rent dropped by half.
What does prices going down have to do with "it is the most expensive city in the world"?
"Deflation" is prices decreasing over time, and I would particularly measure it in number of hours say a minimum wage worker, at 1,000 yen per hour, would have to work to obtain goods or services over time. By that measure, there has been huge deflation over the last 20 years, and it is particularly noticeable in the last two years.
I had a sit down breakfast this morning at Denny's. It was about 750 yen (45 minutes of work for a minimum wage worker), including tax and tip. The coffee was free refills.
Since my compensation per hour has been stable over the last 15 years, I notice things like a big screen TV going from 6 weeks of work to 1 week of work, my rent going from 3 days of work to 2 days of work, food being stable, clothing dropping by half, etc.

About whether the US has bottomed, I'm not sure what a series of energy price shocks will do, and I think they are coming.

This is very interesting to an inventor who is being forced to look around and wonder where to find a long term location. Please keep us posted as the trend continues.