Economic guru Marc Faber warns savvy investors that as growth in the West is slowing, India and China are growing rapidly, and it's re-balancing the global economic world order.
The editor of The Gloom, Boom and Doom Report at a recent investor conference in India warned that the “end of Western economic and political hegemony” is coming, and Asia’s rise to the top is virtually unstoppable.
“We live in a new world,” warned Faber, nicknamed “Dr. Doom” for his contrarian and bearish predictions. He warned clients to cash out before the Black Monday stock market crash in 1987, and helped clients profit handsomely as the Japanese stock bubble burst.
Faber recommends Indian stocks, real estate, bonds and commodities (with an emphasis on precious metals). Over the long run, they should all do very well.
Faber said he’d wait for the current correction in Indian stocks to take its course, before investing. He particularly likes financial service stocks.
Faber did offer two warnings his prediction.
First is India’s growing and bureaucratic government. Faber said that “government is a cancer”, the smaller it is the better. He does, however, think the RBI is doing a “wonderful job” as a steward for the Indian economy, which is rare among central banks.
Second, India’s rise depends on peace and stability in the region. The U.S., which won’t cede dominance easily, could play the role of “troublemaker” in the east. The U.S. has tens of thousands of troops spread around Asia.
If both these threats can be avoided, “India has the healthiest demographics in the world”, and the long-term future of the country is incredibly prosperous.
Meanwhile, Prime Minister Narendra Modi has raised India's import duties to their highest in three decades, setting the stage for a protracted trade war.
As he prepares to seek re-election next year, Modi has been ensnared by a global wave of protectionism that could threaten the foreign direct investments India needs to achieve double-digit growth, Bloomberg reported.
He has made it more expensive to import parts for automobiles, cameras, televisions, electricity meters and smartphones, risking trade disputes from allies like the U.S. and Germany to rivals like China.
"India has taken a dramatic protectionist turn," Richard Rossow, an Indian policy expert at the Washington-based Center for Strategic and International Studies, wrote in a note. "The scale of India’s protectionist leap is surprising and likely to elicit a strong response from the United States and other major trading partners."
(Newsmax wire services contributed to this report).
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