Ultra Bearish Marc Faber Says Current Gold Price 'Low', Investors
Must Prepare for the Worst as 'It Will Come to War'
Business Intelligence Middle East
the Swiss fund manager and Gloom Boom & Doom editor said markets
are "extremely oversold" and a "snap-back" rally
50 points on the S&P could start as early as today.
sees no new highs for the year, and expects markets to drift lower
to a mid-term target of 1,050-1,100 for the S&P by October-November
of this year.
In one of his
gloomiest predictions, he tells investors to prepare for the worst
by buying precious metals on dips.
a phone interview from Zurich with CNBC
this morning, Faber said: "The market has experienced huge
technical damage. Near term as of today, all markets are extremely
oversold, so a rebound will happen.
technically is so great that the rebound, no matter if QE3 happens
right here, is unlikely to lift the markets above the May 2 high
on the S&P at 1,370," he added.
Faber has set
a mid-term target of 1,050-1,100 on the S&P 500 by October-November
of this year. After, "we will have to see if QE3-QE4 will come
and whether markets will stabilize."
the renowned investor said he would use rebounds as selling opportunities.
500 Index slumped 60.27 points, or 4.8% yesterday, to 1,200.07.
The percentage drop was the biggest retreat since February 2009,
as concerns the global economy is weakening prompted a global rout.
An index of
global stocks entered a so-called correction yesterday, falling
more than 10% from this year's high. The seven-day sell-off has
wiped out more than US$4.4 trillion from market values worldwide,
according to Bloomberg News.
has gone mad," Faber told Susan Li and John Dawson on Bloomberg
Television's "On the Move Asia," earlier this morning.
don't understand that markets are volatile and that they have to
be prepared to see stocks drop 30% annually and then rallying 20%
and then dropping again. That's going to be the pattern, and anyone
who cannot live with that shouldn't be buying anything".
predicted the stock market crash in 1987 and turned bearish shortly
before the 2007-2009 bear market, expects a snap-back rally about
50 points on the S&P- as early as today or Monday.
already smell QE3. Now we'll see if Mr. Bernanke is a true money
printer or an amateur money printer," he said.
is a true money printer, he's going to start printing soon, markets
will rally but not to new highs," he told Bloomberg.
market is telling you that the economy is in recession," Faber
said in an earlier interview this week.
the bond market is telling you that the economies of the Western
world are weakening, but at the same time the stock market is still
relatively high, I think the stock market is vulnerable."
Treasuries are still perceived as a safe haven because everyone
knows the US has an endless ability to print money, Faber told CNBC
today, adding that he US will not default, instead it "will
pay the interest in a worthless currency."
that some companies will start to disappoint in the second half
of this year and "we might have liquidity problems in the market
in terms of financing."
It will come to war
CNBC on Tuesday, Faber said there is a case for being "ultra
bearish about everything".
his stance, he said: "I see that 10 years ago, a huge shift
in economic power began from the Western World the US and Western
Europe to Asia and emerging economies."
shift in the balance of economic power to emerging economies is
accompanied by a shift in the political and military power, and
that..., the West will not just sit and do nothing about it."
expedition is the first shot," he argued.
the West would want to control China by controlling the oil supplies
from the Middle East, and then it will come to war," he predicted.
In war time
the one thing you don't want to own is government bonds, he said.
"I would prepare for the worst. In a worst case scenario investors
are better off in precious metals," he stressed.
the rest of the article
Marc Faber [send him
mail] lives in Chiangmai, Thailand and is the author of Tomorrow's
2011 Business Intelligence Middle
Best of Marc Faber