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[stocks]

Any areas of the globe that are looking reasonably attractive?

Well, never before has the world economy been as globalized as it is today. I have recently looked at GDP growth and I have looked at the growth of equity markets around the globe. And these are, historically, the highest correlation metrics. That's why, being bearish on one major economy -- you have to bearish on all of the other equity markets as well. They all move together. And being bearish on equities on a cyclical perspective over the next 2 years or so. I'm also bearish on commodities because of what I said about China.

Including gold?

Gold is not a commodity - gold is a currency and it is the only currency without liabilities and cannot be mismanaged by its own central bank….so gold is different. Gold, I think, can get hit here to around $200 on the downside and about a thousand or 1050 in a shakeout. There was recently too much noise in the gold market, but that was another opportunity to buy, because eventually gold is the best store for your savings over the next five years or so.

And let's talk about the gold standard again. Can we go back to being on the gold standard in the future?

I don't think we can go to a gold standard again, because if we go to a gold standard, there is not enough gold around to cover all the needs of all the companies to cover their currency. But gold, in one form or another, will play an important role in the next currency system once it is born out of the ashes of the current currency system. Therefore, I do believe that gold will be the best way to move your savings from the old world, that is in short of a final game until it breaks down completely and we have a new system.

So it sounds like you're looking for something to be replacing the EU, and the US Dollar, and the Chinese system. Are we looking for some brand new restructuring or are we going to still see the old political lines? How does this play out?

I really do not know. I don't think that our systems are functioning and we need a new generation of politicians who are completely free of the old thinking and Europe will be disintegrating. We will be going through a lot of pain and changes in the coming years and at some point in time, a new generation of politicians will arrive and they will tell the truth and they will tell the people - "We have a problem, it's going to be painful to fix it, but we have to do it for the sake of our future and our children."

In the US, we only have politicians who tell people what they want to hear, and very few who say "Here's some medicine, it's going to be uncomfortable, but you got to suck it up because the alternative is far worse."

That is the case everywhere, but I'm hoping that can change. It doesn't change just by saying things. You get strong leaders only after a period of pain and hardship. You don't get them in a world of high prosperity.

So do you ultimately see the EU breaking up?

The EU may not break up, but the Euro…will most likely break up. I don't see how that can survive. You have a currency for economies with completely different economic structures, and one size fits all in terms of monetary policy, and currency policy and fiscal policy just does not work. Because over the long term, the productivity differences are such that you build enormous imbalances and stress and currencies are here to balance imbalances. And if you take that factor - the currency - away, then you have to balance through the real economy adjustments and that's much more painful.

Read more: http://www.businessi...8#ixzz0wyyGmCQt

[inamosa]

Thanks for sharing. Good read.