From Bloomberg:

Gold may "easily" rise to a record $1,000 an ounce next year as the dollar weakens and Asian central banks diversify their reserves, said Marc Faber, who advised investors to acquire the metal at the start of a six-year rally.

A "continued" weakening of the U.S. currency may help gold to climb above its all-time high of $850 traded in January 1980, said Faber, managing director of Marc Faber Ltd. and publisher of the Gloom, Boom & Doom Report.

"That's baked in the cake in my opinion," he said today in an interview. "Gold is still relatively cheap. It hasn't risen as much as nickel, or oil."

...

"I don't know of any market that goes up in a straight line," he said. "A continued correction from here wouldn't surprise me; it's a correction, a setback, in an ongoing bull market."

Step aside Marc Faber, Chris Laird has written the most gloomiest and doomiest newsletter article predicting the subprime mess could result in an 80% drop in stocks.

He did raise some good points though.  Like why did the ECB inject so much liquidity into the markets last week without much news to justify it?  Do they know something we don't?

Anyhow, I'm not trying to cause a panic.  I personally am not panicking.  But I feel it is important to take a look at the extreme point of views.

For those interested here is a link to the doctor's monthly market commentary.

http://www.ameinfo.com/news/Dr__Marc_Faber/

Marc Faber - the man who predicted the stock market crash in 1987 - thinks we are at the start of a bear market:

"We're right where the market would usually be at the start of a bear market," Faber said in an interview from Copenhagen. "Financial stocks are not performing well and this is usually a bad indicator for the market."

A measure of financial shares has retreated 5.9 percent since Feb. 20. Countrywide Financial Corp., the biggest U.S. mortgage lender, and Lehman Brothers Holdings Inc., the fourth- biggest U.S. securities firm by market value, led the losses.

Inflation and rising oil prices may restrain economic growth and keep stocks from completing a rebound from the Feb. 27 rout that sent the S&P 500 to its worst plunge in four years, Faber said.

"What the government publishes as inflation isn't the cost- of-living increase for the average household in America," said Faber, who oversees $300 million at Hong Kong-based Marc Faber Ltd. Increases in corn, wheat, soybean and meat prices have driven food costs up for most Americans, he said.

Emerging markets, including China, may fall more than the U.S., according to Faber. Rising oil prices and defaults on mortgages by the riskiest borrowers in the U.S. reduce the cash available for investments in those markets, he said. Growth in the U.S. current account deficit has boosted global equities, he added.

'Excess Liquidity'

"In an environment where global liquidity is tightening, emerging markets that benefited from excess liquidity would be the most vulnerable," he said.

Marc Faber, Mr. Gloom, Boom & Doom, is predicting:

"In the next few months, we could get a severe correction in all asset markets," Faber said in an interview with Bloomberg Television in New York. "In a selling panic you should buy, but in the buying mania that we have now the wisest course of action is to liquidate."

...

The bullish outlook of traders in everything from bonds, equities and commodities to real estate and art suggests valuations are peaking, Faber said. Last year, the Morgan Stanley Capital International World Index of developed stock markets jumped 18 percent, while a survey of Wall Street's biggest bond- trading firms predicted U.S. Treasuries will post the best gains in five years during 2007.

...

Strategists at 14 of the biggest Wall Street firms all estimate that U.S. stocks will advance this year. The last time they were in agreement was for 2001, when the S&P 500 dropped 13 percent.

Of course Marc Faber is famous for predicting the crash of 1987.  He also advised investors to buy gold in 2001 which has since more than doubled.  Right now his favorites are Singapore and Vietnam stocks.  He also likes Japan.  This is what he said about gold and oil:

Faber said gold should rally further on expectations that supply of the precious metal will decline and demand for it will increase to hedge against inflation. Gold climbed 23 percent last year, its sixth year of gains.

"The price of gold will continue to go up and probably very substantially," Faber said. "In the long run, it's very clear that central banks are basically increasing the supply of money and the supply of gold is obviously very limited."

Oil prices are also tipped to rise as political instability in the Middle East and other petroleum-producing areas threatens supply and global demand increases. Crude oil in New York added less than 0.1 percent to $61.05 a barrel in 2006, after tripling in the previous four years.

"Everyday the world is burning more oil than new reserves are added," Faber said. "You wont see $12 dollars again" for every barrel of oil. "The trend is likely more to be upside because demand in Asia is going to double over time."

Does anybody here on StokBlogs agree or disagree with his predictions?  If so, why?

It's no secret that I'm big on oil, gold and resources in general and not a big fan of the US stock market right now. I'm not a member of Barron's Roundtable, but Dr. Faber is and he has some interesting things to say in his February market report.

Sharpsicle had asked me about a good chart showing the historical Dow/gold ratio and this article shows it from 1900 to the present. I think the Dow/gold ratio is a great indicator for the macro trend. The last Dow low/gold high coincided nicely with the beginning of the historic 1982-2000 bull run in stocks. The three major peaks for the Dow were 1929, 1966 and 2000. '29 and '66 were generational highs and I guess I'm betting history will probably look very similar.

Even if you disagree with my thesis, it's a good idea to read what Dr. Faber has to say. I assume he didn't get on the Roundtable by being foolish.