Saturday, June 22, 2013

Marc Faber Buying GOLD Now More Than Ever

Video Transcript : it's my pleasure. last time you were here you said that the new highs in the markets cannot be trusted which proved to be a good call. at this point do you see further downside to the s&p 500? yes, i see further downside not because of the fed statements, but because like always they hedged their bets in the sense that the tapering off would not necessarily stop mr. bernanke said if the economy does not improve along the lines that we expect, we will provide additional support. so i think the markets are worried about something else. first of all, interest rates have been rising now for a year. the ten-year treasury note and 30-year treasury bond yield bottomed out last july. so we've been in an uptrend in interest rates. then, as i maintained for a long time, the chinese economy is much weaker than the official statistics suggest. my view would be that at the present time the chinese economy at the very best, the very best, is growing at something like four percent per an um and without a huge cred expansion there would be no growth at all. the other emerging economies are essential flat. singapore has relatively honest statistics tissues like other developed countries and oh, emerging economies. you've been quoted as saying that you are personally buying gold as well as gold stocks. when you look at the selloff across the board, across asset classes including gold, does that make you question the performance of this particular asset class given the market environment? yes, correct. technically commodities look horrible. in particular, also industrial commodities, precious metals also look bad. but some technical factors would suggest that we are approaching at least an intermediate low because the commercials which are essentially hedgers, they are people that produce gold and so continuously hedge at the present time they have an extremely low short exposure. in other words, basically they're accumulating gold. secondly, gold is close to $1300 compared to, say, $700 in 2008, the conditions in the mining industry are horrible. the exploration companies are running out of money, and industry conditions are worse than they were in 2008. so i think that a lot of supply that potentially would have come to the markets through new exploration will simply not be there. in addition to that, i think that in emerging economies, selling funds, central banks and individuals who continue to accumulate gold, physical gold.


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