Marc Faber, publisher of Gloom, Boom & Doom Report, talks with Bloomberg about his forecast on the stock market, sovereign debt crises, and precious metals.

Faber expects a summer rally, with a lot of resistance around 1,200/1,220 on the S&P, followed by a downturn and bottoming out sometime in October/November.

“Stocks could go up and the economy can deteriorate,” says Faber. He thinks the fiscal deficits will continue to increase and is not sure a recovery ever happened. “When you have huge fiscal and monetary stimulus, and at the same time you have private sector credit contraction, you can get huge volatility in economic and financial activity.”

Envisioning a forthcoming disaster in the next few years, Faber is happy to own physical gold. “It’s a race in the purchasing power of paper money to the bottom, and the only assets that will, for sure, keep their purchasing power are precious metals.”