Today Dr. Marc Faber spoke with King World News about what the big problem will be as the stock market plunges. He also discussed what he expects will happen to gold.
Eric King: “You talked for so long about derivatives and how they were going to eventually blowup. That blowup almost took the system down (in 2008). Derivatives, are they the same powder keg waiting to destroy the financial system that they were prior to 2007?”
Margin Calls To Create Big Problems
Dr. Marc Faber: “Yes, I still think they are extremely large. And the positions, particularly in interest rate futures, are huge. Some are probably hedged, but some aren’t. We could have a big move at some point that would hurt speculators or someone who is on the wrong side of the market…
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Dr. Marc Faber continues: “And I would just like to mention, as an example, that the money printing also creates more volatility in individual equities and individual commodities. For instance, wheat was trading more or less sideways. Now in just 4 or 5 days wheat has gone up very strongly. So my view is that when problems occur, the volatility will be extremely high because you have large long positions in everything from stock index futures, bond futures, commodity futures, and you have equally large short positions. And whether the margin calls of all these players can be met will be interesting to see.”
Eric King: “As we begin to see the decline (in stocks) this time, you did mention even the collectibles going lower, but the gold market, could that buck the trend?”
“I Prefer To Hold Gold”
Dr. Marc Faber: “I wish I knew. But my view would be that you are buying it here at a reasonably attractive level. Will it go up straight away or later? Who knows? But I think that many people who were speculating in gold and silver, they migrated to cyber currencies and they are now speculating in these instruments. I prefer to hold gold.
What will the next crisis, if it’s a real serious crisis, look like? As an example, maybe the lights are switched off in New York, or the internet doesn’t function. So if the internet doesn’t function and you go to the grocery store and you want to buy groceries with a credit card, you will not get them. But with gold coins you will be able to survive…KWN has now released the powerful audio interview with Dr. Marc Faber that took place on a crystal clear line from Asia and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***KWN has just released the extremely important and timely audio interview with London metals trader Andrew Maguire and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: ALERT: Andrew Maguire Just Exposed The Catalyst That Will Create Massive Gold Price Surge CLICK HERE.
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