Q: There have been stray concerns on where the market might be headed, and whether things are approaching a bubble like proportion, especially in the equity market. What do you feel?
A: Basically, we have had huge fiscal stimulus packages and we had quantitative easing in basically all countries around the world. So asset prices have recovered strongly after March 6 this year, with stocks rising, commodity prices rising and the dollar weakening again and each time the dollar weakens it is kind of a symptom of some inflation in the system and excess liquidity building up. What we have is large cash positions around the world and zero interest rates and also the policy by the Fed to keep rates very low level for a very long time as was the case of 2001. With this in mind, money goes out of cash balances into something, either consumption or into some kind of assets like equities or commodities or bonds or art or real estate.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
