Accumulate Gold and Japanese Shares, Says Marc Faber
Business Intelligence Middle East
the Swiss fund manager and Gloom Boom & Doom editor says
a correction in assets prices has begun but the long-term outlook
for gold remains favorable and recommends accumulating the precious
metal on any weakness. He also recommends accumulating Japanese
shares as reconstruction work will push money into equities.
to Fox Business Network on Thursday, Faber said: "What
is happening in the Middle East is friendly for gold, friendly for
oil, and other commodities".
in the Middle East will only increase over time, nothing has been
solved; in Libya we have a civil war, it is not necessarily about
democracy..... All these things are indicating, including the earthquake
in Japan, that central banks will continue to pursue expansionary
monetary policy to keep interest rates artificially low and that
boosts equities and commodities, Faber noted.
how the earthquake will impact Japanese bonds and shares, Faber
said "the key to the performance of Japanese shares is that
the Japanese bond market becomes unattractive and that the Yen over
as a result of the reconstruction work that may cost up to US$300
billion, that obviously the government will need to monetize, and
Japanese bonds in the long-term will become terribly unattractive,
and that will push money into equities."
think Japanese shares are worthwhile to accumulate.
predicted the stock market crash in 1987 and turned bearish shortly
before the 2007-2009 bear market, warns a correction in asset markets
has already begun.
are moving up, he says, "but they are not acting all that well"
and he doesn't expect new highs for now.
What is the
magnitude of the correction?
in very volatile times; a correction could be 10%, 20%, he said,
highlighting "I would on any weakness accumulate gold."
outlook for gold is favorable," the Gloom Boom & Doom editor
equities, he doesn't expect a breach of the February highs and sees
weakness in May, June.
out on the S&P on February 18th at 1,344 and usually in April
we have seasonal strength but I think its likely that the
S&P will not be able to make a new high and then we will have
a more significant setback in May, June," Faber told Fox Business
In a recent
CNBC interview Faber was asked whether the Japan situation would
have any impact on the Fed's Treasury purchases, a.k.a. Quantitative
Easing (QE) and whether it would make it harder for the Fed to pull
back in June. The Gloom Boom & Doom editor said he expected
further equities weakness and suggested the Fed will pull back until
the S&P drops up to 15%.
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 East
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