1. Stock Markets--Faber is bearish on the all markets around the world, especially Shanghai, Australia, and Canada. He believes that while markets are temporarily oversold in the very short-term and could bounce, that the direction will likely be down until Oct/Nov. He goes own to explain that the slowdown in China could turn into a crash and that it will bring markets down 20-30%. He specifically said the S&P 500 could fall down to 850-900. He does believe that the March 09 lows of 666 will hold because of money printing,
2. Gold and Precious Metals--While long term bullish, Faber is cautious in the short term on gold and thinks it may dip down to 1100, but this would present investors with a buying opportunity. He notes that from a seasonal perspective gold generally falls in July and into mid August. However he thinks the Elliott Wave deflationists are wrong about gold falling back to 500. He thinks gold could actually go to 4,000 based on M2 (money supply).
3. Gold Stocks--He likes gold stocks and will continue to hold them even though he expects them to fall with the general market.
4. Housing Market--Faber did not address US housing but pointed out that the Australian and Canadian real estate markets are in bubbles (even larger than the US housing bubble) and that with the slowdown in China could collapse.
5. Bonds---Faber said that bonds could rally a little more (between 105-110 for TLT) and he would be looking to short them. Long term you will lose holding bonds because of inflation he declares.
6. Central Bank Policies--As worldwide markets fall central banks will again resort to money printing on a scale larger than last time. And as history shows money printing works which will prevent markets from collapsing.
Good Luck!
Black Swan Insights
