Marc Faber on why commodity prices will rise

Long-depressed commodity prices are set to finally head higher for two key reasons, Marc Faber said.
It all boiled down to the need for infrastructure, said Faber, who is also known as Dr. Doom for his usually pessimistic views. The need for infrastructure in Asia is huge. They have to build roads. You go to Jakarta, Manila, the infrastructure is a catastrophe,” he told

The second reason commodity prices were set to rise was because developed markets were also set to boost their spending, he said.
“In the western world, they believe — I’m not saying it’s the right belief — but the belief among economists and the neo-Keynesian and the interventionists is that monetary policy alone cannot lift the global economy out of its slow growth mode,” he said. “So they have to go and build infrastructure and boost governments’ fiscal deficits.”

That was also set to send commodity prices higher, he said.

“This combination of infrastructure in emerging economies and infrastructure spending in the developed economies of the U.S. and Europe, in my opinion, will mean that inflation will actually surprise on the upside,” he said.

When it comes to one particular commodity – crude oil – Faber also pointed to economic growth in emerging Asia as boosting prices, adding that oil could easily test $70 a barrel in the not too distant future.

 Varchev Traders

Read more:
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance