Marc Faber: I Will Never Sell My Gold in My Life
by Constantine Gardner
Business Intelligence Middle East
Dr. Marc Faber
the Swiss fund manager and Gloom Boom & Doom publisher
discussed this week his 2013 predictions. In a nutshell, he expects
a lot of surprises [not on the positive side] for investors. He
sees declining markets, a correction in gold followed by higher
prices, favorable fundamentals in oil and reiterates that US Treasuries
are "undesirable" and the dollar is a "very sick"
the phone to CNBC's
Mandy Drury Thursday, Faber said equities "after possibly
some near term strength will essentially decline in most countries."
Japan, Vietnam and China from his prediction because "they
underperformed over the last 4 years so badly."
there are many reasons for equities to fall, citing in particular
that earnings could disappoint and the fiscal issues are not resolved
- tax increases and more spending which could have a negative impact
on the economy. He also sees many basket case countries "with
little hope for improvement that could spillover in social unrest
and geopolitical tensions."
March 2013 will mark the 4th anniversary of the current bull market
and he can see trouble ahead: "Lately, we had important shares
like GE, IBM, Wall Mart doing badly," he said, pointing out
that when important shares "that are reflective of the economy
perform this badly, you have to ask yourself about the soundness
of the entire market."
In his January
Commentary Faber highlighted his concerns about 2013 and advised
investors to adopt a prudent "capital preservation" stance.
He wrote: "That something is not quite right with the economy
is evident from the recent performance of Wal-Mart, Tiffany, Genesco,
and Kohl's. What disturbs me about most asset markets is that we
had outsized gains since early 2009 (there are exceptions such as
Vietnamese, Chinese, Japanese, and European equities, and also US
opinion, investors' expectations about future returns on their assets
are far too optimistic. In a world that currently hardly grows investors
will need to reduce their future return expectations. I believe
2013 will not be a favorable year for holders of assets. My priority
has now shifted to the preservation of the outsized gains I have
achieved over the last three years."
But, with this
caveat: "I am also mindful that corporations and wealthy individuals
are cash rich and since there are very few promising investment
opportunities aside from equities, they might one day shift their
considerable liquid assets into stocks."
consolidated close to two year highs Friday after Europe's Central
Bank expressed cautious optimism on the eurozone's prospects.
I am not
selling my gold
I am buying
gold every month but I would prefer to see a final sell off to shake
out margin buyers and speculators and then I will increase my position
again more meaningfully, Faber told Drury.
In an earlier
interview with CNBC's
Squawk Box Tuesday he quantified the expected drop: "I
don't think [gold] will go up right away, and we maybe have a correction
of 10% or so on the downside.But I see that governments will
so I want to have gold as an insurance policy."
In his January
commentary Faber was more specific calling a bottom for gold perhaps
down to between US$1,550 and US$1,600."
prices dipped back below US$1658 an ounce Friday PM in London.
never sell my gold in my life," Faber told Drury, adding, "as
long as I see people like Mr. Bernanke and Mr. Obama and The U.S.
Congress, I will always buy every month some gold.
role & the Fed
could form part of "an immensely important phase in the history
of world money," according to a report published Friday by
the World Gold Council and produced by the Official Monetary and
Financial Institutions Forum.
economies have attempted to dismantle gold's monetary role,"
the report says,"[but] this has failed."
from some FOMC members suggest that "it would probably be appropriate
to slow or to stop purchases well before the end of 2013".
little sign that core FOMC members such as Bernanke and Yellen are
shifting," adds a note from Standard Bank, "the Fed's
QE is likely to continue for as far as the eye can see."
the rest of the article
Marc Faber [send him
mail] lives in Chiangmai, Thailand and is the author of Tomorrow's
2013 Business Intelligence Middle
Best of Marc Faber