Marc Faber, publisher of the Gloom, Boom & Doom report, who is known for forecasting correctly many significant moves of the market seen in the recent years, believes that in 2011 the global stock markets will survive downward correction.

In his view, during the last 18 months we saw huge capital flow in Asia. As a result, the markets became overbought and inflationary pressure has dramatically strengthened. The more such events as those in Egypt occur, the more people start doubting about investing in the emerging economies. According to Farber, money inflows will come back to the developed markets and the US may outperform the emerging economies’ stock markets in the next 3 months. The economist forecasts that MSCI Emerging Markets Index will lose 30% in 2011.

As for the US, the S&P 500 index will decline this year by 10%, says Farber. US stocks will be affected by the rising commodity prices, especially oil. The index won’t decrease much as the stocks of oil companies will show strong growth.

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