Tuesday, August 12, 2014

Marc Faber: Gold to outperform S&P500, Nasdaq markets and US Dollar

My inclination is to believe that the central banks eventually will have to make a choice. They have created asset bubbles. At the same time, the economy has hardly recovered. 

What will happen when the asset bubbles burst again, say the stock market goes down 20%, the property market goes down and so forth? What will be in the mind of the Federal Reserve and other central banks? 

What will be in their minds is more money printing will do less damage than no money printing. And so the asset purchases, the QE 1, 2, 3, 4 will go on to what I predicted in 2009: It will go to QE 99. And as a result of that, not only the US dollar but all currencies will lose in value against some assets, irregularly at times. Real estate will go up at times. At times commodities will go up at times. Stocks and bonds will go up at times. But my inclination is to think that when this all happens and even before – because the market is a discounting mechanism – is that gold and silver will again appreciate against the US dollar.

Marc Faber still likes the yellow metal

Gold has done well since year 2000

And don't forget – and I have to stress this – the media is all over the fact that gold hasn't performed well, in September of this year, for the past three years and silver equally. But they never mention that between '99 and 2001, all precious metals significantly outperformed stocks and even today, precious metals between 2000 and today have significantly outperformed stocks. But the media paints people that own gold as kind of out of this world, out of touch. 

In my view, the recent gold rally has occurred amidst very negative sentiment. I get so many research reports from all over the world, from banks, investment advisers, gold bugs and so forth. 

General mood on Gold

By and large in this rally the mood has stayed negative. I think we made a major low over the last two years around $1180 to $1200 on the gold price and around $20 on the silver price, and I don't recommend people to put all their money into gold – but maybe they should; the question is, where would they keep it? Certainly not in the US – but in general I would say now is probably quite a good time to buy some gold and silver, and I believe that from here on gold and silver will outperform the S&P 500, the Nasdaq and the Russell 2000. It's my view.

Gold Silver are relatively attractive still

Now, if we have a complete breakdown of the monetary system then maybe everything goes down and then stocks may go down 80% and gold only 40% or 50%. I'm just saying, relatively speaking in my view, gold and silver, platinum, palladium are quite attractive and I recommend people to have at least some exposure to precious metals in physical form.

VIA http://thedailybell.com/exclusive-interviews/35527/Anthony-Wile-Marc-Faber-on-Commodity-Cycles-Monopoly-Central-Banking-and-the-Wealth-Redistribution-Craze