Monday, March 30, 2015

Faber Warns : The Middle East will Blow up

ET Now: You have said that one should always bet on mega trends, bet on the big picture. So what are the three mega trends for this decade?

Marc Faber : We are half way into the decade, there are only five years left. As I told you, I personally do not rule out that the US stocks could go up somewhat more, but if you take a 5 to 10-year view, the investors will make more money in emerging economies than in the US. I believe that geopolitical problems are here to stay. I also happen to believe that the Middle East will blow up and whereas everybody was very positive about oil when it was trading around $100 a barrel and above. The same analysts now think it will go down to 20.

My guess is that the price of oil has an equilibrium price of between $40 and $60 and it will settle around that level eventually. Can it drop to $20 for a few days? Yes, it dropped to $32 in December 2008, but then rebounded very strongly. So a lot of things can happen. I would also say that the Chinese stock market, which performed even worse than India after 2006 relative to global markets, bottomed out last summer and we had a huge run-up in prices in the last three-four months of about 50% on the Shanghai A Index. A correction is due, but I believe that China will also join the club of money printers.







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.

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