Europe Situation 'Does Not Look Good': Mobius

Commodity prices are in an upward trend despite the dramatic falls witnessed in recent days, and will rise in US dollar terms over the longer term, while the situation in Europe "does not look good," Templeton Emerging Markets Executive Chairman Mark Mobius told CNBC in an interview.

“We've got a long-term bet on commodities, simply because of the supply/demand situation. Of course as I've always said there's going to be fluctuations and sometimes there'll be a fluctuation of 20 percent as much as that. But over the long term, there's no question, commodities are going to be up, in US dollar terms,” Mobius said.

The dollar strenght would have an impact and slow down the increase in commodity prices in dollar terms, Mobius said.

"But over the longer term the trend is definitely up in any currency whether it'd be dollars, euros, whatever...Of course the emerging markets are benefiting from the stronger currencies and they don't feel this increase that you're feeling in the US," he added.

Turning to Europe, Mobius said he was very concerned about an uncontained default of Greece, and the spread of that to other peripheral economies like Ireland and Portugal.

"It does not look good. Unfortunately the medicine that is being applied is the same medicine that was applied during the Asian crisis you know, which didn't work. You've got to have growth, otherwise there's no way you're going to pay back your debts," Mobius told CNBC.

"So it's something that I hope the European central bankers and leaders will think about carefully," he added.