The next shoe to drop, which could be China

MARK FABER : Well, I think we have to distinguish between different commodities. We have agricultural commodities, and I think the long term outlook for agriculture in the world is probably rather favorable. I would rather play it by owning farms than by speculating in wheat futures and corn futures because the average investor will find it very difficult to trade these markets. And then we have industrial commodities, and this is an important signal for the market. They collapsed. They did not collapse because of Greece. They are down 30 percent because it is very likely that the Chinese economy is now decelerating very rapidly. And that on the world would have a far greater impact than say Greece. And so I think investors who all focus on the banking crisis in Europe, they overlook the next shoe to drop, which could be China.  in Bloomberg Surveillance

We have a lot of volatility in markets

Marc Faber : : Well, I think we have a lot of volatility in markets and they are, as far as I am concerned, fairly unpredictable because we have a lot of government intervention. We do not know whether QE3 will come about in America, some form is likely. We do not know about the bailout of banks in Europe, some bailout is likely. So there is a lot of uncertainty and the markets move according to momentum. For instance, is it possible for me that the euro just strengthened in the last couple of days as much as it has because the outlook for Europe is probably worse than for the U.S. So we have a lot of uncertainty and all I can say is the best for investors is to stay diversified. - in Bloomberg Surveillance