Marc Faber: Stocks and Silver Will Fall Sharply In May

by | May 4, 2011 | Marc Faber | 54 comments

Do you LOVE America?


    Marc Faber, publisher of the Gloom Boom & Doom Report, says that everything is pointing to a downward correction. While we generally prefer to ignore ‘expert’ opinions, Marc Faber has proven time and again that he has an almost sixth sense about what global stock markets and money flows will do next. In March of 2009, he called the bottom in stocks to the day.

    If you have any stock/paper holdings, it may be time to sell and go away, it is, after all, May.

    Via The Daily Crux:

    The markets are due for a correction and the technicals point to a weak market, Faber tells Wall Street Pit. In particular, he points to the decline in new 52-week highs as evidence of an unhealthy internal market.

    Right now, Faber advises investors determined to buy stocks to stay away from cyclicals, tech stocks, and banks, sticking with safer plays such as consumer staples.

    Faber, publisher of The Gloom, Boom and Doom report, likes gold as a long-term investment.

    He’s more cautious when it comes to silver because of its recent runup in the price, and expects a 20-percent-plus correction in the metals complex because the inflation trade has become too crowded.

    Faber says copper and the S&P 500 are highly correlated, and finds he fact that the stock index reached a new high while the metal didn’t is another signal that stocks could follow commodities lower in the short-term.

    Faber says the U.S. housing market has another 10 percent to fall, but valuations are now attractive and housing hasn’t been this cheap since the early 1980s. In a serious inflation environment, Faber would rather own housing than paper dollars.

    Source: News Max

    Even if you don’t hold any equities or paper assets, it’s important to pay attention to stock markets, as they signal global investor sentiment and, in recent years, what the government will do next.

    A collapsing stock market will have policy implications at the Federal Reserve and government levels, and as Marc Faber has previously pointed out, this means that even though Ben Bernanke says Quantitative Easing will end in June of this year, another round of money printing is sure to come.

    A weakening stock market means that the US dollar should be strengthening as investors flee equity markets and move money into “safety” assets, in this case the US dollar. Since the majority of Americans equate a rising stock market with a healthy economy, a falling stock market means things are getting really bad.

    Thus, to quell disconent among the unsuspecting populace we have no doubt the Federal Reserve will resume monetary easing within days or weeks of the previous program ending.

    While we may see a near repeat of the 2008 crash in stocks, gold, silver and commodities, be assured that Mr. Bernanke will fire everything in his arsenal at the problem.

    This means that any near-term or intermediate-term correction will be short lived.

    The trend of rising prices, especially for essential goods, will continue unabated.

    How long this strategy of extend and pretend can continue is anyone’s guess, but every time the Fed has engaged in adding liquidity to the system and the purchasing of billions of dollars in US Treasuries, it has lead to a declining trend in the US dollar.

    We may see dollar strength in coming weeks or months. We may see collapsing prices in stocks and commodities. Eventually, however, the US dollar will break its historical support line and dive even further into oblivion.

    Our long-term recommendations, which include acquiring gold, silver, food, equipment and skills, have not changed. In fact, we would suggest to our readers that any meaningful correction in prices should be used to acquire even more quality assets.


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      1. Comments…..Got my husband to buy silver a couple of weeks ago.  Now look what is happening.  I told him if he was too worried, I would buy the silver back from him at the same price as he paid for it.  It’s all in the same family.

        I am expanding my garden this year by 2 X the size and will be foraging for wild fruit/nuts to supplilment our stores of food.

        I do buy Mountain House dinners each month, but I will not depend on them for regular meals.  It will be very important to be self-sustaining in the coming years.

        God Bless and keep on prepping.

      2. Mona, I am working on an article that should put to rest any fears your husband may have about what’s happening to silver right now… Silver rose very quickly and essentially broke the record 1980 high (or came VERY close)…. a pullback was all but guaranteed there…. Nonetheless, the trend of money printing and out of control government is still intact. Silver and gold are nowhere close to a bubble… Lots of news out there about George Soros selling, so and so forth…. these guys are market TRADERS… as soon as they see an appropriate correction, I have no doubt Mr. Soros and those in the know will be right back into their paper trades… those holding physical should be in it for the long-term… I once wrote that they will manipulate this market to the point you’ll want to spit on your gold and silver…  I suspect people are doing that right now… My view — if it drops to 35, i will acquire more… $30? more…. 

        There is only one direction these assets will go over the long term, and that is up… Just set your time horizon in years, not weeks … When silver was at $20, there were folks commenting that it can’t go much higher… it doubled within a year of those comments… Personally, I can see silver breaking through $100, and during the ‘panic bubble phase’ when everyone and their mother are buying, much higher.

        When the shit hits the fan, there will be very few assets that will be worth anything – and my belief is that gold/silver will be within that sphere.

        Just my 2 cents.



      3. Anonymous-  can I buy you a fu*%ing beer!  LoL that is funny!!!!!!


      5. Still kicking myself for not buying more when it was $20…….A 20% correction just means I’l be heading for the coin shop….

        Don’t worry Mona, your husband won’t be losing out in the end….

      6. I frickin bought 18$ face value from a guy on CFraigs list Sunday afternoon at 48 spot price…$590   crap, I guess I screwed up…dammit!

      7. I guess I should of waited 🙁

      8. If you want to “invest” in silver, only buy on dips in the price, not when it is rocketing up.  Mona, you must have forgotten to tell your husband that basic principle.  I suspect it will not dip below $38, but if it does BUY IT WHILE IT IS ON SALE.

      9. Buy when it’s on the way down! Most people buy when it’s going up. Silver needs this pullback in order to continue its bull run. It’s going to be like a sling shot, a nice pullback before heading to $100oz.
        I personally welcome this pullback.

      10. Don’t worry, those of you that bought silver at $50/ounce, in the near future it will skyrocket to $100+/ounce.

      11. Gods Creation,
        Shellie can’t find your email address she was using to chat with you…….

      12. I am thinking and putting it into two piles. 1. for an investment to hold money safely and make profit  My banker, not the teller, but a manager at my credit union told me to stock up and dont keep money in the bank!! I couldn’t believe I was hearing this from my bank manager!!
        2. a pile for long term and bartering after SHTF

      13. I’d rather be in this silver market than in fiat money.

        Keep accumulating – don’t worry about pullbacks, instead buy more and cost average.

        All fiat currencies are going to collapse.

        Remember that only 2% of the population owns p/m’s.

        WE are the minority!

        If you own any p/m’s at all you can sleep well. No need to worry about the day to day ups and downs.

        Two to five years from now you will wish you bought more! Don’t sweat this pullback – it’s an opportunity!

        Don’t kick yourself either – You’re The Smart One In The Room!

      14. Comments….. Anon, thanks for the vid, those bears are always a hoot. The content was well received. I got a friend who I speak with everyday and he was kinda spooked about silver’s current retreat. I told him keep holding it and I reminded him that we had talked about this very same event happening. I’m in it for the long haul, whereas I’ll buy more if it dips another 15 or 20 bucks. If not then I’ll just put the extra cash in more food supplies. Also I’m planting more fruit trees and berry plants. The missus thinks I’m losing it.

      15. Please bear in mind that Faber’s gloom boom report came out before the silver correction this week!!!  We already had the 20%+ correction from 50 to 39.  Buy here!!!!!!!

      16. Silver to $90; corrects to $75. Speculate with silver. Invest in gold. Horde your lead. They won’t be making any more of that after the SHTF.

        BJ: Hang on to it. You’ll look like a genius. MAC is right extend your time lines.

      17. In between the hoarding of 44’s, 9mm’s, 12 ga buckshot, slugs, “buck and ball”, 22’s, 270’s, 410’s, and (oh yeah) 30-30’s and 308’s, I’m hoping that silver drops back into the 20’s.  Don’t worry BJ, it’s going right back up.  I’m now forced to hoard near-worthless FRN’s for the moment when I figure silver won’t drop any further.

      18. Silver has already fallen 20% from its high of $49.79. Peter Schiff says he is stepping in and buying under $40

      19. what does “extend your time lines”  mean??

      20. Hi All!  Excited about my Monster pack purchased today!  All out of eagles, so I took Maples.  Don’t worry Mona, I also bought a monster plus about two weeks ago.  It does feel a little unsettling for now but just know you and your family will be rewarded when the collapse completes it’s cyle.  As you continue to buy regularly on the dips you will eventually average out.  My purchase today halved my perceived loss from two weeks ago.

      21. BJ, start thinking in terms of between now and the five years down the road.  What do you think 2016 is going to look like?  Silver is a real good investment, don’t lose faith because you lost a few bucks this week.  Keep on plugging away.  You weren’t gonna trade that silver in for food tomorrow, right?  Keep at it.  We should go shootin’ with DK some day……..

      22. Hey guys,

        My only main concern is this regarding silver: if the CME keeps raising margin requirements forever.  No one will be buying silver contracts right? Forget the physical for a second.  Yeah, I own those two, but I”m talking about the PSLV and even the silver miners.  If CME keeps raising, then the price of silver keeps dropping correct?  At some point, will there be buyers even if the margin requirements are super expensive?! Please advise.

      23. Hey BJ – Send me an email…….

      24. I received an email last week from AMPEX indicating that they would buy silver @ $3..00 over spot.  Makes one wonder why they would do that if it was going in the dump.  If I had silver to sell, I wouldnt.  Wish I would have bought it when it was $15.00 per oz

      25. StarBucks double shot Espresso Roast in the morning (no sugar).  I don’t sleep much.  The other videos, are better…. As the GSR gets closer it gets more prone to make a decision on when to convert DK. Yes, Mac does rule, thanks Mac.  Thanks sam (un truth).  As Okie says “I like it because it’s shiny”.  TN knows.  Ride the wooden roller coaster & pull some +G’s, clack, clack, clack.  Aflac, quack quack….

      26. Maybe Silver will drop.
        But it will come back stronger then the FRN.

        Silver is on sale! BTFD

      27. How many tours have you made sam (the truth)?  I think u r wrong.  How much do you weigh?  R u active?

      28. kingkang: Yes you are correct, if margin requirements are raised, demand MAY drop and if demand drops, prices will drop. Which is just what JP Morgan wants.

        It would certaintly temper speculation in the metals, but my understanding is that there are more “contracts” for paper silver and gold than there is metal for either.

        So demand is strong and it is not going away because only a very small percentage of people globally actually own gold or silver personally, and many more will want them because: metals are a global hedge against inflation, everyone is printing truckloads of money, and eventually; probably by the end of the third quarter, inflation will start to kick in …. in a serious way.

        We ain’t seen nutin yet!  If you have your preps, hold your metals. Buy more on the dips but don’t get crazy. Stay liquid. Lots of time. Lots of time. Don’t fold ’em. Hold ’em.

      29. BJ: If you are looking for barter, don’t buy silver. Buy coffee in 12 oz instant at Wal Mart for about $6 and sugar, honey, or maple syrup.

        Buy a 50lb bag of sugar, divide, and put in dry plastic bottles with an OA. That’s barter.

      30.     I don’t have enough FRN’s for silver or gold right now, so I am investing in canned food and guns. Still need something like a compact 9mm for the short to intermediate term when concealability still matters.

           I feel somewhat exposed when loading the car at the grocery. When you start hearing about robberies in crocery store parking lots, things are turning to do-do. My wife says her mom has to worry about her groceries being taken from her hand walking home from the store in Ukraine. USA is heading there.

           re  coffee: check Aldi’s for small jars at around $2.99. Cheap stuff, but beats a blank. Aldi’s is competitive with WallyWorld on most items.

           It will be interesting to see what happens when the people who hold  “paper” metals find out their contracts are worth as much as the decades-long contracts from the USFL. These are often the people who “hold” large quantities of metal. Probably will see lines form outside tall buildings with windows that open. It would suck to be walking by at the wrong moment.

      31. Wow, good discussions here!  I see many different levels with TN on top and the other extreme with ankle biters that are not here but lurking for lower hanging fruit.  Something to learn from each and to reinforce reflections from prior experience.  Time to go make the doughnuts and bring home the dough and swap for the right brand bacon.  Double espresso is ready.  I will sleep when I’m dead, but not yet.  Security has increased at the gate.


           Funny thing: When the COMEX raises margins 84% in 2 weeks, the mainstream media comment that a silver “bubble” has popped (i.e., speculative monies have ceased to flow into the market, leaving silver to tumble).

           Problem: The COMEX deliberately raises margins to cool off markets.  The problem is not a bubble, but the COMEX itself (same thing happened with the other hot commodities like sugar and cotton).

           Question: Who influences COMEX’s decision to raise margins?  Why would they cut their own profitys by raising margins knowing what will surely folllow?

           Hmmm.  Does JP Morgan Chase and/or HSBC have any influence over these decisions based on relationships with the COMEX (e.g., Their huge short silver position)? 


      33. Thanks DurangoKidd!

        PM’s are funny in that there are two camps where people are passionately LONG or SHORT.

        Anyways, yes, I plan to hold whatever I have.  I don’t feel like panic emotional selling.  And I do plan to buy in the dips.  It looks like it’s going to fall again today….looking at the pre-markets (5/5/11).  If silver goes to 30, i may just have to back up the truck.  I like PSLV and yes, AGQ.  If I can get SLW at a cheap price, I’m all for it.

        OA make sugar turn into rock…. don’t use OA

      35. My opinion is that silver and gold will prevail in the long run.
        Without giving investment advices, i would look gold and silver as safety measures rather than pure speculation.
        Of course if any of you can combine profit with safety, that would be the ultimate achievement.
        But my move is to slowly buy small quantities, and “forget” their existence.
        When the shtf, gold and silver could be used as trade units.
        Mona, take a look at the gold ounce price chart. Even if in smalll periods gold drops, the long term trend is upwards. Drops have to do mostly with ensuring profits of speculators and investors.
        Take care

      36. Louis: My God! The Dukes are going to corner the entire frozen orange juice market!
        Ophelia: Unless somebody stops them…
        Coleman: …or *beats* them to it.
        [all turn and look at him]
        Coleman: Egg-nog?

        Randolph Duke: Money isn’t everything, Mortimer.
        Mortimer Duke: Oh, grow up.
        Randolph Duke: Mother always said you were greedy.
        Mortimer Duke: She meant it as a compliment.

      37. What you are witnessing is a breaking away of the link between paper silver and physical silver.  Just try to go out and buy the metal for spot.  for the past 2+ years I could go down to my local coin shop and buy at $1. over spot.  Went there yesterday they are wanting $3 over spot.  Margins will continue to increase as the metal get harder to comeby.  Paper silver is going to ZERO folks.  The JPM’s are wanting out of the paper short positions and when they are out all that is left is the hard asset, buy it on the cheep

      38. ANON: Is it good enough then to just may sure your jars are dry when you fill with sugar? Will it (the sugar) still have a very long shelf life without an OA?

        I haven’t gotten around to breaking down big bags of sugar yet. In fact I have been buying in smaller bags (5lbs at WM and sitting them in a plastic bucket to do later.

        I have looked at 50 lb bags on SHTF Survival Mall but have not purchased yet. Anyone buying large quanities of sugar at their local LDS/Morman sore? What’s that like? 


      39. Based on Calculus 101… Silver might hit $20 or less again.  By the time Asia opens soon and then Europe between the people that bet on it going over 50 and those now that are about to be stopped out, it will just keep on going for a while.  Why physical holdings beats betting on “stocks” of precious metals in my opinion.  I bought all the way up to $35/ounce and then seen it was going up too fast.
        The trend line just got steeper and steeper as the day went on and sell prices were hit, driving the price even lower.  Glad I sold around $43-45 dollars a good 30% of my holdings.  Locked in profits and I can buy quite a bit more with it.  My gold is far too hard to get too to play with it that way though.
        Guess I’m back to $2000 a week into buying silver, hopefully the wife doesn’t kill me, she had more reno’s in mind haha.

      40. Durango Kidd – Store it as is, out in the open if you want (though mines in 5gal buckets for ease of movement).  Salt will never go bad.  Its like honey.  I’m fairly certain sugar is in the same boat as well, I would have to dig into my supplies as I have a paper in there on what stores for how long.

      41. Durango Kidd,

        Sugar lasts indefinitely without an Oxygen absorber, you need only keep it dry and free from contaminants (dirt, etc.). To answer, I have been the the LDS/”Mormon” Home storage center. Sugar there is priced lower than most places, but you can find some on sale at better prices. If you put sugar into a mylar bag or #10 can there, you don’t even put an oxygen absorber in the bag, as I said, you don’t need one. You can buy in a mylar bag, #10 can, or bulk. The bulk is cheapest, and then just put it into a food grade bucket. If you need to know anything else, let me know. Take care.

      42. “Paper silver is going to ZERO folks.”

        Maybe a negative number!  Paper for digits converted to fiat & taxes.

      43. What commodity crisis?  Time to free fall down before the jump plane lands.  It’s like riding a bike, you never really forget.

      44. Hey BILL………I emailed you…….what gives???


           Loving this plumetting paper silver price thing: I was lamenting that I only had 500 oz before prices got too high for me.

           Now, I can get much more when/if it hits $20/oz.

           Note: This is all the big banks unwinding their short positions.  If you buy at a discount this time, and the banks have exited their silver positions, there will be no manipulation to suppress silver prices going forward.

           Can you say “parabolic”

      46. SILVER….”Honey, it was ON SALE so I bought two”

      47.  I have a web site where I research penny stocks and stocks under five dollars. I have many years of experience with these type of stocks. If theirs anyone interested in these type of stocks you can just click my name to check out my web site. It looks as though mark faber is right so far about the fall of commodities in may only time will tell if this tread will continues.

      48. The drop in the silver price will continue to fall until JP Moran gets rid of its short position. Then the buying starts.

      49. I’d just say be cautious. The future is impossible to foretell – always has been. Although I have silver, I don’t want all my life savings to be reduced to a few silver coins worth a few dollars. My advice would be to invest in no more than 10% of your net worth.

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