Mkts to rally but retest Oct lows thereafter: Marc Faber
Published on Fri, Jan 09, 2009 at 11:00 | Source : CNBC-TV18
Updated at Fri, Jan 09, 2009 at 23:37
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Mkts to rally but retest Oct lows thereafter: Marc Faber
Marc Faber, Editor, Publisher-The Gloom, Boom & Doom, feels global markets would rally a bit more. He said 2009 is likely to be better than 2008 for global markets. “But they are likely to retest their October lows after that.”
Q: In this kind of an environment since both those commodities have turned quite volatile crude and gold how would you map them for this year?
A: I do not think that gold will rise a lot in the near future because compared to the CRB (Commodity Research Bureau), a broad index of commodities gold is very overvalued as compared to nickel, copper and oil. In the near-term, industrial commodities which are more oversold than the stock market two months ago could rally somewhat.I would position myself as a trader in some commodities.
Q: You had mentioned earlier that you expect to see global markets go back to the lows we saw last year. Would you say there is a fear of overshooting that target and markets might actually see lows lower than what we saw in October?
A: Yes, I think that's absolutely possible and likely. The global economy is in deep trouble. The big question is we are in depression but is this depression is going to be inflationary or deflationary? In both cases the markets will not perform particularly well because in a deflationary depression all asset prices will continue to go down. In an inflationary depression interest rates will go up and so on the both assumption equity prices are not particularly inexpensive.
