REGAN: But you don’t anticipate that it will stay there. It’s – it’s supply and demand ultimately, and if it goes to $70 you see less investment and drilling and thus less supply here in the US. So $70 is the floor in your view?
FABER: Not necessarily the floor, but it won’t stay low for a very long time. I think it’s – at the present time, farmers are by and large losing money because the price of corn, wheat, soybeans has collapsed by around 50 percent from the highs and the costs are up substantially. I don’t think oil would stay down for very long because I live in an emerging economy. I can see one thing. The demand for oil in the regions of the emerging world where 80 perent of the population of the world lives is going up still from very low per capita consumption levels compared to say the European economy or the US.
So I think the long-term trend for demand is up, but obviously the decline of oil prices, some people blame it on Saudi Arabia and some other blame it on the US and who knows what, the fact is maybe the decline in oil prices tells you that the global economy is not recovering as all the bullish analysts think, but actually it’s weakening, yes, weakening. But some countries benefit from lower oil prices, particularly India.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.