Dr Doom Marc Faber on why commodity prices will rise, oil to hit $70 soon
Long-depressed commodity prices are set to finally head higher for two key reasons, Marc Faber, the publisher of the Gloom, Boom & Doom report, told CNBC.
It all boiled down to the need for infrastructure, said Faber, who is also known as Dr. Doom for his usually pessimistic views.
"The need for infrastructure in Asia is huge. They have to build roads. You go to Jakarta, Manila, the infrastructure is a catastrophe," he told CNBC's "Street Signs," adding that to accommodate tourists, Asian countries needed to build airports and railways. "You cannot ship that many people by airplanes. There's no space."
The second reason commodity prices were set to rise was because developed markets were also set to boost their spending, he said.
"In the western world, they believe — I'm not saying it's the right belief — but the belief among economists and the neo-Keynesian and the interventionists is that monetary policy alone cannot lift the global economy out of its slow growth mode," he said. "So they have to go and build infrastructure and boost governments' fiscal deficits."
That was also set to send commodity prices higher, he said.
"This combination of infrastructure in emerging economies and infrastructure spending in the developed economies of the U.S. and Europe, in my opinion, will mean that inflation will actually surprise on the upside," he said.
When it comes to one particular commodity – crude oil - Faber also pointed to economic growth in emerging Asia as boosting prices, adding that oil could easily test $70 a barrel in the not too distant future.
U.S. oil futures were down 0.55 percent at $50.57 a barrel, while Brent futures were off 0.41 percent at $51.58 at 11:42 a.m. HK/SIN.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1