By Shani Raja
July 21 (Bloomberg) -- Marc Faber, who told investors to bail out of U.S. stocks before 1987's so-called Black Monday crash, said oil prices may fall to $100 a barrel as demand slows in a global economy at the ``tail end'' of its expansion.
Accelerating inflation and rising interest rates worldwide are likely to dent the value of commodities including oil, said Faber, who publishes the Gloom, Boom & Doom Report, at an investment forum in Sydney today. Real-estate in India and Cambodia were among his favored Asian investments, he said.
``Global liquidity is under some relative tightening, and that is unfavorable for all asset classes,'' said Faber, 62. There will be ``sharp corrections'' in commodities prices.
Central banks from Vietnam and Russia to Brazil are raising rates as inflation replaces the global credit crunch as their biggest concern. The World Bank said last month that global economic growth will probably slow to 2.7 percent this year from 3.7 percent in 2007, amid spiraling food and fuel costs and mounting losses tied to credit-market investments.
``What you've had since 2001 is a global synchronized boom,'' Faber said. ``In the history of capitalism this is most unusual. When it comes to an end it should affect all countries.''
Stocks worldwide have tumbled this year, erasing almost $12 trillion in value, as financial institutions piled up $447.6 billion in credit-related losses, and investors braced themselves for a U.S. economic recession.
Bull Market
The U.S. went into recession last October and current statistics are hiding its ``severity,'' Faber said in a July 1 interview with Bloomberg Television. Growth in the world's largest economy faces ``significant downside risks,'' Federal Reserve Chairman Ben S. Bernanke said July 15.
Those comments contributed to crude oil in New York falling more than a tenth from its record high of $147.27 on July 11. Oil has still gained 72 percent in the past year. Arjun N. Murti, a Goldman Sachs Group Inc. analyst, in May predicted that crude may rise as high as $200 a barrel within two years.
``When you have volatility, any market can drop 50 percent and still be in a bull market,'' said Faber, who told today's forum that he prefers holding physical commodities rather than shares or futures.
Corn, soybeans and wheat have surged to records this year, amid rising incomes in emerging markets. Macquarie Group Ltd., Australia's biggest investment bank, said on July 10 global demand for food will continue to drive a rally in soft commodities.
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