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Marc Faber: Gold to Outperform Stocks PDF Print E-mail
Written by Marc Faber   
Wednesday, 13 March 2013 07:30

I'd rather buy something that is relatively depressed than something that is relatively high. 

Investors Are Being Chased Out Of The Gold Market

“The gold market can be extremely volatile, a normal symptom of a fiat-backed financial system inducing the public into schizophrenia”

“Clinging to the familiarity of a 67-year-long financial system, moving to periods of fearing total loss at the currency graveyard — will chase investors out."

Worried about a Deflationary Collapse

"I do not believe in a deflationary Collapse but I am afraid of it"

I worry about the time when the current asset inflation will give way to a serious asset deflation, which will inevitably happen sometime in the future. As an observer of markets I am, therefore, concerned that the decline in gold prices could be telling us that we are about to enter a period of asset deflation.

I should like to make two points very clear. I am not sure when the asset deflation will start. Most likely, different asset classes will deflate at different times and with different intensity. The second point I wanted to make is the following. In a deflationary environment (whenever it will happen), financial assets (stocks, government and corporate bonds especially high yield bonds) would likely be the most vulnerable assets. In fact, in a deflationary collapse, I would envision money to flow into a sound currency and move out of “funny” paper monies. Therefore, I continue recommending the gradual accumulation of physical gold.

Similarly, most societies die because of their ill-conceived fiscal and monetary policies, and not because of their economic problems.

Big Stock Selloff Coming

"The stock market's run will result in either a 20 percent correction or a more nasty sell off at some point this year, Marc Faber, publisher of the Gloom Boom and Doom report, told CNBC's "Closing Bell" on Thursday. Faber pointed out that it's been almost exactly four years since the stock market bottomed out. "We're up very substantially, I think investors who today rush into stocks should be reminded of that," he said. He sees two possible scenarios. Either a 20 percent correction for stocks and then a move higher, or a scenario that is similar to 1987 or 2000 when stocks rise strongly early in the year only to drop sharply."

Echoing recent comments made on CNBC by Stanley Druckenmiller, founder of hedge fund Duquesne Capital, Faber said "Druckenmiller is a very thoughtful person, and I share his views that it will end badly for stocks. But unlike Stan, I believe it will end badly this year."

 

 

 

 

 

 

 

 

 
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