Skip navigation
Stocks Video Gallery
Lori Wachs, of Delaware Investments, shares her best retail stock picks.
Gary Kaminsky, former managing director of Neuberger Berman, shares his market insight.
The home buyer's tax credit has been extended, but how much will that help the housing industry? Ron Peltier, CEO of Hom...
Craig Berger , tech analyst at FBR Capital Markets, shares his best tech plays now.
The sea is the limit for Nautical Petroleum as they prepare statements of permission to develop two oil production sites...

Current DateTime: 06:30:10 09 Nov 2009
LinksList Documentid: 24355697

Current DateTime: 06:30:10 09 Nov 2009
LinksList Documentid: 24890560
  • Winterizing Your Portfolio

      If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.

  • Investor's Guide to Real Estate

      Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.

  • Alternative Investing

      Stocks and bonds? Sure. But it's a big world out there for investors.

powered by digg
By: CNBC.com | 27 Oct 2008 | 05:25 AM ET
Text Size

The wave of stock selloffs sweeping world markets may be partially caused by the fact that many governments increased guarantees for bank deposits, making them a much safer investment, Marc Faber, author of the "Gloom, Doom and Boom Report," told CNBC Monday.

"Now that deposits are guaranteed, basically I as an investor have no incentive to hold equities so I sell them and put my money in bank deposits," Faber told "Squawk Box Europe" by telephone.

The other measures taken by various governments to try and prop up ailing markets have had the opposite effect, he added.

(Watch the full CNBC interview with Marc Faber above).

"The interventions, they actually have increased volatility. It’s impossible to forecast market movements when you have interventions," Faber said.

The next stage of the crisis may be that companies may have to adjust their book value as it happened during the bear markets of the 70s and 80s, when book value was overstated.

"If the global economy slows down by as much as I think it will… then a lot of book values will have to be adjusted downward quite substantially," he said.

And central banks cutting rates based on the assumption that the downturn will dampen inflationary effects will have another headache when the worst of the crisis is over, Faber warned.

"I think first we’ll have a bout of deflation that will actually be quite substantial… but then the budget deficits will go through the roof and the Fed will print even more money … and then later on we'll have very high inflation," he said.

© 2009 CNBC.com
Tools:
Print EmailAdd This share icon
  • digg share

CNBC HIGHLIGHTS

  • Rumors abound that Oprah will leave her show to start a new network. What would this mean for daytime TV?
  • David Moore
  • A private equity specialist sponsored a stand-up comedy troupe in New York to prove that CEOs can, in fact, be funny.
  • Jim Cramer
  • Cramer did the research and found eight stocks that lead the pack. Read on to get his top picks.
  • Hideki Matsui
  • Did Hideki Matsui’s performance make it more likely that the Yankees will pay to have him back?
  • The Mötley Crüe drummer is looking for a new record industry paradigm, and you can participate.
  • Laptop and money
  • Software, biotech firms, even banks are watching a particular Supreme Court argument today.
ADD COMMENTS
Remaining characters


Current DateTime: 06:01:39 09 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:01:56 09 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 02:12:29 09 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:01:57 09 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters