Gold, equities may become safe havens now: Tyche Group

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See what other FIIs are saying about the markets See what other experts are saying about markets See what Udayan Mukherjee is saying about the markets

European crisis have been weighing down the global markets for a long time now. Martin Hennecke of Tyche Group doesn't see any solution to the crisis soon. "We think the end of the crisis is still ahead of us as the major countries are also going to face the same type of debt crisis like the weaker countries," he adds.

According to him, commodities and stocks may become the new safe havens because they are inflation proof. "Gold as a commodity will be becoming the next safe haven and to some extent equities as well because they have tangible assets behind it. We would say that Asian economies look relatively healthier than the West," he adds.

Also read: Greece, Budget, Credit Policy key triggers now, says BofA-ML

Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Reema Tendulkar. Also watch the accompanying video.

Q: Would you be confident about Greece ultimately coming out and completing its negotiations both with private investors and with its own politicians? Is it just a matter of time?

A: Germany might just have enough money right now to devise Greece. Apart from Germany, there isn't any country in the Eurozone that has got any money to bail out the weaker Eurozone countries. So, it's all about Germany bailing out other countries.

But the problem is, after Greece, we have Portugal now looking in options of potential default as well. We know that Spain and Italy don't look much better. The debt is only increasing of all these countries. There aren't any improvements.

Italy has got two trillion Euros of debt. That even for Germany would be far too much to bail out. So, we don't see any solution to the Eurozone crisis. We think the end of the crisis is still ahead of us as the major countries are also going to face the same type of debt crisis that the weaker countries have been facing. A similar thing is going to happen in the US and in the UK, their deficits are basically out of control as well.

Q: We are witnessing a fairly decent rally in the six weeks of 2012. Are you therefore advising or are you taking profit on the rally or are there more legs for this rally despite the problems you are mentioning?

A: The crisis in the western countries is actually so bad that you might see the market is going up because of the crisis. This time around it's not just the stock market crisis or banking crisis, it's crisis of the major western countries- US, France, Germany, UK. They are losing control of their debt.

When you have the sovereign debt crisis like that then the only solution for those countries is most likely money printing, quantitative easing. That would mean as crisis intensifies we may see opposite result of what happened in 2008 where stocks and commodities crashing. We may now actually see commodities and stocks becoming the new safe havens because they are inflation proof, whereas cash or bonds have no protection against inflation. There is no intrinsic value, it relies on government promises.

Gold as a commodity will be becoming the next safe haven and to some extent equities as well because they have tangible assets behind it. Particularly we would say that Asian economies look relatively healthier than the West. We are looking for equity opportunities there as part of a diversified portfolio that's not leveraged and that also includes gold for crisis protection.