Marc Faber Gets Into A Fight With Hong-Kong Uber-Bulls
 

Marc Faber and Arthur Kroeber of Gavekal Dragonomics engaged in an intense debate on Reuters about the prospects for China, and whether or not the nation's economy is over-heating.

Gavekal, whose views have historically contained an abundance optimism, takes the bull case, while Mr. Faber, renowned for his regular doom, takes the bear case.

Each party gives their opening bull/bear case, and at about thirteen minutes into the debate, they ripped into each other.
Faber, in response to Kroeber's bull case: "I do not disagree that if you look at fiscal stimulus in China, at least at the end of the day they have infrastructure. In the U.S. they have nothing but debt, and ignorant people. [Laughter]"

Kroeber butts in: 'Like me.'

Faber: 'Of course'

Reuters moderator: 'Careful.' [Laughter]

Faber: 'If you believe your story about China, which I've said, I think in 20-30 years time the Chinese economy will be much larger and more prosperous. People who bought the first U.S. shares at the beginning 1800's, and throughout the 19th century... it was a disastrous investment in the long-term. All they had to do was buy in the last 20 years..."

There's much more, especially later when Kroeber discretely snaps to Faber:

Reuters: Can you comment about massive oversupply.. massive buildings with nobody in them, sparkling airports, etc.

Kroeber: 'The answer to that is, and I know there are a lot of people here with a lot of experience, but you have no idea how big China is, none of us does. Take steel, people have been talking about over-capacity in the steel industry since China had capacity of 200 million tons, today it has a capacity of about 650 million tons and domestic consumption of 600 million tons. So if China had believed everyone's warning about overcapacity back then they had 200 million tons of steel production, steel would probably be worth as much as gold today. Fortunately, they didn't listen, they built all the steel plants, and they've absorbed most of it."

These are rough quotes, excellent productive arguments from both sides. The crowd showed itself to be overwhelmingly China-bullish. But I'll say this... if China busts within 12-months, this video will make a hasty return, in Faber's favor.

http://insider.thomsonreuters.com/link.html?ctype=groupchannel&chid=3&cid=111042&start=0&end=2382&shareToken=Mzo0MzJmNWY2ZC1kZmU0LTQ0MjgtYjE1Yy1jZWU3ZjFmYjU5MDM%3D