Wednesday, October 7, 2015

Marc Faber on The Gold Correction







Marc Faber, Editor and Publisher of “The Gloom, Boom & Doom Report’” talks about gold.

What about gold? Being in a correction mode for a couple of years already, it recently has broken down some more.

Well as you know there are so many explanations ranging from manipulation to essentially Chinese selling which could have been the case you know that margin calls went out for stock accounts, the margin buyers may not have been able to sell their shares because still about 20% are not trading.

Number two, they can’t sell their properties because you can’t sell overnight the properties so the margin call has to be met the next day and property transactions may take, I don’t know three months until you close and maybe there were some corporations or individuals that were holding gold and so that they could liquidate, that is an explanation that I could sympathise with.

Or you could say because of the strong dollar people became, or had hesitations of owning gold because they said if the dollar is strong why would I own gold? I mean there are lots of explanations. The simple explanation is of course that there were more sellers than buyers at that particular time. Now if you look at the pole market in gold, 1999 255 dollars went to 1921 dollars in September 2011 and then we had this correction which now we are in 2015, four years on and the price was always holding around 11 or 12 hundred and now it looks like it has broken down on the downside and then you have to ask yourself well is it a breakdown that will lead to further selling in other words, prices would move lower and find the low at, I don’t know, maybe 700, 800, 900 dollars, a thousand or is it a final liquidation from which prices will start to move up.

I really don’t know, all I know is that I own gold and it doesn’t worry me that it went down because as I mentioned to you I have this diversification, the bonds in US dollars and the cash in US dollars has been a good investment essentially over the last twelve months. Then I own equities and I own properties in Asia that have been reasonably good investments so the fact that gold is going down doesn’t worry me and I buy every month a little bit but I think on this weakness I will increase the position substantially because I had maybe say 25% in gold but because equities and properties went up, the dollar went up and gold went down, the allocation to gold is no longer 25% but maybe only 10 or 15%.

So then I have to stock it up again. But I would say an individual should definitely own some physical gold.

But I would say an individual should definitely own some physical gold.
The bigger question is where should he store it? because I think if we think it through, the failure of monetary policies will not be admitted by the professors that are at central banks, they will then go and blame someone else for it and then an easy target would be to blame it on people that own physical gold because they can argue, well these are the ones that do take money out of circulation and then the velocity of money goes down, we have to take it away from them.

That has happened in 1933 in the US. With our brilliant governments in Europe that follow US policies and with the ECB talking every day to the Federal Reserve, they would do the same in Europe, take the gold away from people.

Interview conducted by Johannes Maierhofer and Peter Matay

Full Interview - http://www.marcopolis.net/the-big-pic...




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.

3 comments:

  1. I've read all the information I could get my hands on, and I still don't understand. I think its because I'm making assumptions from preconcieved notions.

    Like, lets say the currency is USD/JPY = 91.003. Does that mean if I buy, I'm spending yen to buy dollars? Where the hell did I get these yen? And if I sell, does that mean I'm spending my dollars to get yen? So now I have yen in currency in my bank?
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Dr. Marc Faber Tomorrow's Gold







Dr. Marc Faber author of the Gloom, Boom and Doom report is a world class Investor, Doctor Faber 's typically controversial and contrarian views have earned him the label of Dr. Doom. Doctor Doom also trades currencies and commodity futures like Gold Natural Gas and Crude Oil.Even his harshest critics must admit that he's been unerringly correct in his market forecasts over the past three decades . Marc Faber is a Swiss investor.He was born in Zurich, Switzerland. He went to school in Geneva and Zurich and finished high school with the Matura. He studied Economics at the University of Zurich and, at the age of 24, obtained a PhD in Economics magna cum laude. Between 1970 and 1978, Dr Faber worked for White Weld & Company Limited in New York, Zurich and Hong Kong. Since 1973, he has lived in Hong Kong. From 1978 to February 1990, he was the Managing Director of Drexel Burnham Lambert (HK) Ltd. In June 1990, he set up his own business, which acts as an investment advisor and fund manager. Faber is publisher of the Gloom Boom & Doom Report newsletter and is the director of Marc Faber Ltd which acts as an investment advisor and fund manager.