Marc Faber "I love the Fact that Gold is Finally Breaking Down"; Gold vs. Apple; Patience, Gold, Japan

Marc Faber loves that gold is finally breaking down. The reason is not to gloat, or a prediction. Rather "gold will offer an excellent buying opportunity".

Marc Faber on Bloomberg TV on the Fall in Gold Prices

"I love the markets. I love the fact that gold is finally breaking down. That will offer an excellent buying opportunity. I would just like to make one comment. At the moment, a lot of people are knocking gold down. But if we look at the records, we are now down 21% from the September 2011 high. Apple is down 39% from last year's high. At the same time, the S&P is at about not even up 1% from the peak in October 2007. Over the same period of time, even after today's correction gold is up 100%. The S&P is up 2% over the March 2000 high. Gold is up 442%. So I am happy we have a sell-off that will lead to a major low. It could be at $1400, it could be today at $1300, but I think that the bull market in gold is not completed."

"$1300. Nobody knows for sure but I think the fundamentals for gold are still intact. I would like to make one additional comment. Today we have commodities breaking down including gold. At the same time we have bonds rallying very strongly. If you stand aside and you look at these two events, it would suggest that they are strongly deflationary pressures in the system. If that was the case, I wouldn't buy stocks or sovereign bonds because the stock market would be hit by disappointing profits if there was a deflationary environment."

On gold falling lower if we have a deflationary environment:

"Yes, I agree. That's why I said if the gold market collapse is saying something about deflation and at the same time we have this sharp rise in bond prices and the signals are correct that we have deflation, I wouldn't buy stocks because in a deflationary environment, corporate profits will disappoint very badly."

On whether a deflationary environment is possible right now:

"Everything is possible…In the economy of the cuckoo people that populate central banks, everything is possible. What you have is gigantic bubbles, the NASDAQ in 2000, then the housing bubble and then commodities in 2008 when oil went from $78 to $147 before plunging to $32 within sixth months. That kind of volatility comes from expansionary monetary policies from money-printing."

"All I'm saying is that I think we're going to have a major low in gold in within the next couple of weeks. Gold, as of today, you should actually buy as a trade. I think it can rebound in the next two days by $40."

On why gold will rebound $40 in the next two days:

"Because we are about in gold as oversold and we were essentially during the crash in 1987. From there we have a strong rebound. All I am saying as a trader I would probably enter the market quickly for a rebound of $20 or $40. From a longer term perspective, I would give it some time. We may go lower. I am not worried. I am happy gold is finally coming down, which will provide a very good entry point."

On whether investors should also stay in cash:

"My argument is that you should always have in this kind of high volatility environment a fair amount of cash because opportunities will always arise again and again and if you have cash you can then buy assets at a reasonable price. I think Patience is very important in this environment. The question is, how do you hold your cash? Hopefully not with a Cyprus bank.

Marc Faber is a great contrarian investor and publisher of the Gloom Boom & Doom Report. He is well known for his accurace predictions of stock market crashes and other correct calls on different investment assets.

Faber: Cyprus Catastrophe 'Can Happen Anywhere in the World'

The banking catastrophe in Cyprus could be repeated in the United States and elsewhere, according to Marc Faber, the editor and publisher of the Gloom Boom & Doom Report.

“It can happen anywhere in the world, in Western democracies, because you have more people that vote for a living than people that work for a living,” Faber told CNBC.

Therefore, the wealthy in the United States should “be prepared to lose 20 to 30 percent. I think you’re lucky if you don’t lose your life,” he noted.

“If you look at what happened in Cyprus … people with money, they will lose part of their wealth either through expropriation or higher taxation.”

Despite equity markets reaching all-time highs, Faber is “very cautious” about the U.S. market.

"What concerns me really is that most foreign markets have performed very badly since January — emerging markets are down 10 percent and European markets have grossly underperformed the U.S. In other words, the U.S. is the only game in town," he stated.

"Each time there was only one game in town … it ended badly. So I am very cautious about the U.S. market. We could very well first rise and then have a crash from summer onward," Faber explained.

“We have this money printing, which obviously will lead to misallocation of capital.”

He cited concern over a “narrow leadership” concentrated in consumer stocks, such as Johnson & Johnson and Procter & Gamble.

But, Faber noted, 92 percent of financial wealth is owned by 5 percent of the population.

“The majority of people don’t own meaningful stock positions and they don’t benefit from a rise in the stock market,” he said. “But they are being hurt by rising costs of living and we all know that the real income of the median household is going down for the last few years.”

Marc Faber is a great contrarian investor and publisher of the Gloom Boom & Doom Report. He is well known for his accurace predictions of stock market crashes and other correct calls on different investment assets.