Sunday, October 9, 2016
Marc Faber : Markets are volatile and there is a lot of leverage in the system
This week on #TGIF BloombergQuint's Agam Vakil and Shraddha Babla speak to Marc Faber about the global economy, U.S. elections (find out if he prefers Trump or Clinton), Indian equities (which sectors is he betting on?) and GOLD(still bullish?)!
Q: One asset class that you have been bullish on, is gold. And the love for gold in India is well known. Does that make you look at India positively and what did you make of the recent sell-off in gold?
Marc Faber : Markets are volatile and there is a lot of leverage in the system. Hedge funds borrow money to buy gold, silver, equities, bonds, and currencies. Over the last 2 years, gold dropped almost 30 percent. So we have this volatility. People say markets are not volatile, but that’s not true. There’s a lot of volatility. And I think that the positioning in gold was heavily long. You have to see some of the hedge funds. They know what the positions of other hedge funds are. So when they know a hedge fund is heavily long gold on the margin, they may squeeze that position out by selling gold. And then the hedge fund which has large positions may have to dump gold and the price goes down. And then they can cover.
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.
Posted by Nicole Bourbaki