Friday, March 25, 2011

Marc Faber Bullish on Japan, Gold and Commodities

Marc Faber on FOX Business News 03-24-11
Dr Marc Faber spoke with Fox Business Network about the war in Libya the situation in the middle east and the aftermath of the Japanese earthquake , the implications on the commodities markets and the overall global economic situation

Marc Faber : ...basically what is happening i the middle east is of course friendly for Gold and friendly for Oil and other commodities , I mean the mess in the middle east will only increase over time nothing has been solved , in Libya we have basically a civil war not necessarily about democracy , there is one group of people that wants to oust Ghaddafi , may be rightly so , but all these things are basically indicating including the earthquake in Japan that central banks will continue to pursue expansionary monetary policies , they keep interest rates artificially low and that boots obviously equities and also commodities " and when asked how comes he turned bullish on Japan , Dr Marc Faber answes
"...well I think after this kind of twenty years bear market in Japan the valuation is low and he key to the performance of Japanese shares is that the Japanese bond market becomes unattractive and that the Yen over time weaken I think that as a result of the reconstruction work that may cost up to $300 billion U.S. dollars that obviously the government will have to monetize, will push money into equities. I think Japanese shares are worthwhile to accumulate , having said that I think that asset markets are beginning or have have begun a correction. We peaked out on the S&P on February 18th at 1344 and usually in April we have seasonal strength but I think it’s likely that the S&P will not be able to make a new high and then we will have a more significant setback in May, June." " well I think it will be difficult for the S&P to make a new high above the previous high of 1344 wich was reached on February 18th and thereafter I think the correction will continue , I mean a lot of stocks are already down 20% important stocks and also precious metals too , in my opinion they are moving up but they're not acting all that well " regarding what's happening in Europe Dr. Marc Faber answers " Well I think the Euro, contrary to expectations has rallied. I think what we could see in the next few months a rebound of the U.S. Dollar, weakness in asset markets,in equities and also a correction in commodities, and maybe a rebound in U.S. treasury bonds. We live in very volatile times; a correction could be 10%, 20%. I would on any weakness accumulate gold because as long as you have the central banks that print money the longer term outlook for gold is favorable"
The above transcript was done manually by the owner of this blog hence it is far from from being perfect , use at your own risk...


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