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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Giraffe who wrote (42634)	10/10/1999 9:35:00 PM
From: Crimson Ghost	Read Replies (2) \| Respond to of 116766

Marc Faber bullish on gold bearish on big cap stocks: 8:40p EDT Sunday, October 10, 1999 Dear Friend of GATA and Gold: Here's an interesting article from Friday's Australian Financial Review, forecasting gold's success in a number of hypothetical world financial scenarios. Please post this as seems useful. CHRIS POWELL, Secretary Gold Anti-Trust Action Committee Inc. * * * GOLD SHINES THROUGH GLOBAL GLOOM By Tony Boyd Global Markets Editor Australian Financial Review www.afr.com.au Friday, October 8, 1999 Gold looks like a winner under a number of different scenarios for the world economy, including the bursting of the financial bubble in the United States, according to Dr. Marc Faber, markets guru and author of the Gloom, Boom, and Doom Report. Dr. Faber says that under the "global healing" scenario favoured by Morgan Stanley's chief economist, Mr. Stephen Roach, commodities and inflation would rise "significantly." "In such a case I think that gold will go up very strongly," he says. "But I don't believe in this Goldilocks golden healing scenario. Instead I rather think we are going to get the global bust." However, Dr. Faber says that under the global bust scenario, which would be triggered by a Wall Street crash, gold would do well. "If there is a bust, the Americans will do what they have done when there has been a problem in the past and that is let the dollar depreciate by printing money," he says. "So if they do that I think gold will really start to go through the roof because people will start to lose confidence in money." Dr. Faber says there is another scenario under which gold would continue to rise and that involved a further slide in the U.S. dollar. "Let's assume that the U.S. dollar becomes very weak," he says. "The Europeans would not want to have a very strong euro. They could accept a 10-20 per cent appreciation in the euro but they would not want any more simply because the European economies are basically still weak." He says pressure by Europe on the Americans to raise rates would probably fail, which would force the Europeans to cut rates, leaving investors looking for alternative currencies. "If you look at all the currencies in the world, I think it's very difficult to make a really good fundamental case for any of them," he says. "The U.S. dollar is relatively strong but sick because of the growing trade and current account deficit. The euro is not a particularly desirable currency and the Japanese yen is not attractive because of the financial problems Japan has. "So at the end of the day there is only one currency that is attractive, and that's gold." He says the sudden run-up in the gold price from short covering was a classic outcome of a "crowded trade." He says the world's two big remaining "crowded trades" were big market cap stocks on Wall Street and the interest rate swap market. -END-