CommodityOnline.com (India) interviewed noted investment advisor and fund manager Marc Faber by telephone recently. CO reporter Sreekumar Raghavan wrote:

The artificially low interest rates set by US Federal Reserve should be blamed for the increasing speculation in home stock, bonds and commodities, according to Marc Faber, globally renowned investment advisor and fund manager who runs the website Gloomboomdoom.

In a telephonic interview with Commodity Online from Hong Kong, Marc Faber said that because of the recessionary trends in US economy both trade and current account deficits are declining which means less liquidity in the international markets. This means commodity prices could decline although in the near term both gold and oil prices are bound to move up.

Dr. Faber, like legendary oil investor T. Boone Pickens, Jr., questions the impact of speculators on high oil prices. Raghavan wrote:

Faber said that the role of speculation in rising oil prices may be a little over estimated because it indeed is a result of supply demand mismatch. From 1980 to 2000 period, very little new investments went into mining and exploration which is the main cause of the present crisis… Increased demand from countries like India and China whose economy is fast growing has resulted in a shift in demand curve to the right.

The publisher of the monthly investment newsletter The Gloom Boom & Doom Report also talked about emerging markets. The CO reporter wrote:

He said he is upbeat on the prospects of emerging countries in Africa, Asia and Latin America but investors and speculators are yet to fully understand the potential lying in these countries.

Source:

“US Fed Reserve’s policies led to rising speculation”
Sreekumar Raghavan
CommodityOnline.com (India), June 14, 2008

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