Global Recession to come warns Marc Faber

Global Recession coming up

Indices are close to a high but if you look at the 12 month new highs and the 12 month new lows, there are far more 12 month new lows than new highs.

I think there is a deceleration of economic activity everywhere. The U.S. has done relatively well, but also in the U.S. there are now cracks that are appearing… industrial production, new orders for durable goods… if you look at the trade balance of the U.S., imports are up and exports are basically down.

You look at corporate announcements of United Technologies and Caterpillar Tractor, which are big companies in the industrial sector… their announcements are all essentially negative for the second half. Technology companies have all warned about the second half.

China Slowdown

The Chinese economy is nowhere near growing what the government is publishing. In July, car sales and this is the first time in a very long time, car sales were down for the first time in a very long time, 7 percent in China. And yesterday I talked to someone who has a luxury car dealerships in China who says car sales have hit a brick wall and exports are down and so forth.

When the weakness in China becomes so evident, it also affects all its trading partners and China is the largest trading partner of 124 different countries in the world. The new point of view is that [China’s economic growth] is nowhere near 7% and more likely closer to 2%, if any growth at all.