This analysis from Dr. Marc Faber is adapted from our exclusive webcast Global Investing Outlook. Dr. Faber, based in Hong Kong, is a prominent international investor and a member of the influential Barron's Roundtable. These are some of the thoughts he shared:
If you look at the next 10 to 20 years in the West, I don't see how the lifestyle of the average person will improve meaningfully. On the other hand, if you look at a country like Vietnam, they have a GDP per capita annually of $800 which may go to $3,000 over the next 15-20 years.
The same is true for China and India. You suddenly have a middle class of 230 million people in India who will be buying cars like the $2,500 Nano (pictured) and other goods.
Once a family moves from the bicycle to the motorcycle, it's an improvement in their standard of living. But when you move to the car and drive your children to school in your car, it's a huge increase in your standard of living and your social class.
The Chinese have very little crude oil, natural gas, iron ore and copper of their own. This should support commodity prices because they're not going to stop buying these commodities.
Chinese steel production went from 10 percent of the world in 1990 to over 40 percent today. Aluminum production went from 10 percent of the world in 2000 to over 30 percent. This isn't because of exports – it is domestic consumption which isn't going away.
The bull market in commodities that began in 2001 and lasted until the collapse in 2008 was too short to really trigger a supply response. This is because once the market collapsed, a lot of projects were cancelled and a lot of exploration companies didn't get the money needed to carry on with exploration.
In our lifetime, we will never again have a synchronized global boom like what we've just experienced. Instead, you can expect some countries will do well and others will do less well.
