© Bloomberg TelevisionMarc Faber
Lately, though, gold doesn't seem like it can catch a bid.
"Despite the continued reverberations regarding the Cyprus bailout and its involvement of bank deposits, gold struggled to maintain the positive momentum created in the first two weeks of March and instead now looks very likely to move lower, towards $1580/oz," wrote Deutsche Bank commodities analyst Xiao Fu in a note this morning.
So, what does Faber have to say about it?
This morning, on Bloomberg Surveillance with Tom Keene and Alix Steel, Dr. Doom was asked why gold wasn't holding up.
Here's his explanation:
When you print money, the money does not flow evenly into the economic system. It stays essentially in the financial service industry and among people that have access to these funds, mostly well-to-do people. It does not go to the worker. I just mentioned that it doesn't flow evenly into the system.Faber is, of course, still bearish on U.S. stocks. He told Bloomberg that he sees "considerable downside risk" in the market.
Now from time to time it will lift the NASDAQ like between 1997 and March 2000. Then it lifted home prices in the U.S. until 2007. Then it lifted the commodity prices in 2008 until July 2008 when the global economy was already in recession. More recently it has lifted selected emerging economies, stock markets in Indonesia, Philippines, Thailand, up four times from 2009 lows and now the U.S.
So we are creating bubbles and bubbles and bubbles. This bubble will come to an end. My concern is that we are going to have a systemic crisis where it is going to be very difficult to hide. Even in gold, it will be difficult to hide.
Precious Metals will be about the only game left in town, but by then, basic necessities will be more important, thus the investment in PM's, so that when that day arrives, you have funds to purchase them, if they are still available. When they shut down the digital system, payment for goods and services will be hard to come by if one isn't prepared beforehand with either cash or PMs. They represent the means of last resort before TSHTF.
Regarding gold pricing on the controlled market, seeing it essentially flat-lining as of late is a good sign of things to come if you have possession of it, digital holdings won't count if you cannot access them during a shutdown. Same with food, what good is buying it if you cannot take possession of it? Hard to eat the digital printouts, not very tasty. That price suppression is a good sign of the jump in the near future, as it would have collapsed in price if it was losing support, and everyone knows the price has been in suppression mode since we went off the gold/silver standard in '72 wasn't it? Wall Street has been paid to keep it low every since, but rising demand especially within their own central banks members of the club are hurting their efforts and thus the other factors of economic malaise to disfunction to corruption is setting the stage for the stock/bond market collapse and PM market explosion. The price wouldn't be flatlining if it wasn't going to go up. That is basic consolidation and that can only last so long until the pressure cooker blows it's top. It seems stories of seizure such as Cyprus and the rumors in Italy and Spain, discussions to do same in New Zealand all point to the pressure cooker letting off steam, which only lasts so long. Containment afterwards leads to overcooking of the product and that can get real nasty.