Marc Faber: A year ago, the consensus about the dollar was extremely bearish. I said the dollar would go up. Once in awhile, you can be lucky. [The U.S. Dollar index was up 12.6% last year.] The situation at the end of 2005 was the opposite. Speculative long positions were at a low extreme, and speculative short positions, especially in the yen and euro, were at historic highs. The surprise for 2006 is the dollar will resume its downtrend.

In the last 10 days the Asian currencies have been strong. I’m still recommending Asian assets, including currencies. If the Dow Jones industrials and the U.S. housing market drop 10% one day, I have no doubt Mr. Bernanke [incoming Fed Chairman Ben Bernanke] will print money like water. Also, since 2000, U.S. financial assets have weakened vis-à-vis gold and silver. In 2000 you needed 45 ounces of gold to buy one unit of the Dow. Now you need only 20 ounces. If the Dow goes to 100,000, as the bulls wrote in those wonderful books in the late 1990s, you’ll probably be able to buy it with half an ounce of gold. It won’t happen this year. It will take a few years until gold is $200,000 an ounce.