“As an observer of markets – whenever everyone focuses on one thing – like Greece and Europe – maybe they miss issues that are far more important – such as a meaningful slowdown in India and China.”
The latest reports from Beijing would support Faber's assertion. The HSBC Flash Purchasing Managers Index, slipped to 48.7 in May from 49.3 in April. That marks the seventh straight month that the index has been below 50, a level which indicates economic activity is contracting.
Also I have heard that the Indian economy is slowing down as well:
The GDP scare today intensified even more after CLSA and Morgan Stanley revised their forecast for India lower to 6.3%. Goldman Sachs has also downgraded its estimates to 6.6%. Bank of America Merrill Lynch's estimates too have been revised down to 6.5%. CLSA told CNBC-TV18 that it doesn’t expect any improvement in the June quarter GDP reading.
The government’s Economic Survey sees FY13 GDP at 7.6%, while the finance ministry has been headstrong in stating that the government is hoping for a 7.5% growth. The RBI too has said it expects FY13 GDP to grow by 7.3%.
That is quite a disparity between the investment banks and the Indian Government but at least they are still growing about 3 times as much as the US. I mean Europe is pretty much in recession as a continent and will probably not grow for several years. The US could easily go into recession if we go off the "fiscal cliff" in January. While Japan is growing a pretty scant 1% and if China falls it will take Japan with it. That pretty much covers the biggest economies so maybe Faber is not too far off the mark in his assertion.
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