Dennis Gartman, the economist and author of The Gartman Letter, sat with Alix Steel for a three-part interview this week, republished below

NEW YORK ( TheStreet) -- Dennis Gartman, the economist and author of The Gartman Letter, is cautiously bullish on equities, bearish on the euro and very bullish on the dollar and gold.

Gartman recently sat down with me for a three-part interview, in which he detailed his investment outlook. The following Q&A and videos are a compilation of the series that ran on TheStreet earlier this week.

Long, but Not Too Long

Global markets have seen strong rallies since the beginning of the year. Year-to-date, the Russell 2000, an index of small-cap names, is up 7.8%, the S&P 500 has risen 3.2%, the Nasdaq has popped 4.1% and the Dow Jones Industrial Average has added 2.1%. Some more bearish analysts are forecasting a 7% to 10% correction in the coming months, arguing that stocks have run too far, too fast.

TheStreet: Do you think that this bull market we are seeing right now is for real? Or do you see a big correction coming up?

Gartman: Anybody who has tried to be short of stocks since last March gets led to slaughter. And all I can tell people is that even I try to be short stocks every once in a while. I get over it very quickly. Why do I get over it? Because as soon as I do it, it costs me money.

You have said before that you don't want to be aggressively long, though. What does that mean?

If you're long, that's one thing. If you're aggressively long, that's another thing. Right now I would characterize my positions as being modestly, sort of tacitly, kinda a little bit, sort of kinda long, sorta maybe.

What does that mean?

It means I'm kinda sort of long but not aggressively so. I'm a hedge fund and I actually think in terms of being a true hedged hedge fund. Most hedge funds are basically long only punters. I'm a hedger. I'm long some things and short other things. I'm long Ford ( F), for example, and short Toyota ( TM) ... I'm long restaurant stocks and I'm short grains ... Right now I'm just a little bit longer then I am short so on balance I am a little long, I'm not aggressively long.

What sectors are you most bullish on?

Restaurant stocks.

Which precious metal do you like the best?

I like gold not because it's better than any other metal. It's just that it's demonstrably more liquid than any other metal. I don't have the stomach or the stupidity to trade things like platinum, which can move 2% to 3% in the course of a day. That's just something I don't understand and would never be able to trade.

What are you most bearish on?

I'm most bearish on Europe ... I think Europe is in terrible condition and I'm terribly bearish of Japan. I'm rather aggressively short the Japanese yen.

The Euro Is Doomed

The euro has fallen 4% against the U.S. dollar since the beginning of the year. According to many analysts, the sovereign debt crisis in Greece and its rippling effect on other European Union countries will continue to weigh on the currency. On the flip side, the U.S. dollar has been making a steady recovery. The U.S. dollar index has risen from $77.52 to over $80 since January. Currently the dollar is the most popular reserve currency in the world. The euro was set to be a strong competitor. Now what?

Gartman: Euro Is Doomed

I spoke with Gartman to get his take on the global currency crisis.

TheStreet: You are positive on the dollar and not the euro and other currencies ?

Gartman: I tend to be bullish on the U.S. dollar, but the operative word is "tend." If you made me take a position in the dollar ... I'd probably be a buyer, but the operative word there is "probably." I really have very little interest in what the U.S. dollar is doing at this point. I have a greater interest in what's happening over in Europe.

What do you think is happening in Europe?

I think that Greece is just the first problem and anybody who thinks that the Greek problem has been resolved is fooling him or herself. This problem is only going to get worse and the monetary authorities ... are all aware of the fact that they have real problems. Greece may eventually default. I'm sure it will. And even if they bail Greece out, they have to bail every other fiscally irresponsible country in the rest of the European Union. I think the European Union itself is coming apart. I think it's only a matter of time until it does.

I have read that you have said the euro is a doomed currency. Do you still think that?

Oh, absolutely.

So what's going to be the last currency standing?

Canada. Aussie. New Zealand. Us.

A lot of people say that California debt is as bad as Greek debt, so why wouldn't the dollar, in addition to the euro, get hit?

It may, it's possible.

Talk about the relationship between the U.S. dollar and gold.

Well, theoretically there is some correlation between the U.S. dollar and gold. Characteristically, as the U.S. dollar weakens, gold tends to get stronger, but I'm not sure at this point that you can hang on to that thesis and trade with it as you might have a year or two years ago. We've seen gold go up even on days when the dollar is strong, which drives some people crazy and confuses them. I think gold is simply becoming the second reservable asset replacing the euro, which people thought was going to be the next reservable asset. The dollar remains the most important reservable asset for central banks around the world. Gold is now probably the second most.

Don't Fight the Trend on Gold

Gartman has taken a lot of heat for his gold calls in the past. In April 2008, he sold out of his gold position, but then in June went long again. Since then, gold prices have hit an all-time record high in U.S. dollars of $1,227 an ounce.

Gartman: Bullish on Gold

TheStreet: Where do you stand now on gold ?

Gartman: Well, since basically October of last year I've been bullish on the gold market, but not in dollar terms. I've been bullish of the gold market in euro terms, bullish of gold in sterling terms, bullish of gold in yen terms, bullish of gold in Swiss franc terms. I'm not particularly bullish on the gold market in dollar terms and that's actually been the wise way to go ... Gold in dollar terms is ... $150 below where it was on its high the first week of December, but in euro terms, Swiss franc, yen terms it's at new highs ... I've been that way since October. I'm not changing now.

Are you building up your position as you go or are you just holding gold for the long term ?

Well, I run a hedge fund and ... we try our best to stay long. There have been times where I have been longer. There have been times since October where I was on the sidelines. But on balance, when I've been in the market, I've been long.

How are you buying?

I own gold in Swiss franc terms. I own gold in euro terms. I own gold in sterling terms. And I own gold in yen terms.

What are you buying? Physical gold? ETFs? Metal stocks?

Yes, yes and yes ... I own a very small amount just for myself and my wife of physical gold. But that's just a very small amount. My hedge fund own s gold in futures terms. We own gold in terms of Market Vectors Gold Miners ETF ( GDX). We own gold in terms of the ETF itself SPDR Gold Shares ( GLD).

Are there other specific mining companies that you look into?

If I'm bullish on gold ... I don't want to own miners because I don't want to be exposed to the idiocy of management. If I'm going to be a buyer of gold I'd rather own the purer play ... rather than the leveraged play which comes with being long of gold mining stocks. I just have no interest in gold mining stocks at all.

Can you give a price target for how far you see gold going?

I've been in the business for 35 years and the best that one can do is to get the trend right ... And when I hear people say, 'Well I think that gold is going to $3,000' -- what if it gets to $2,950 and it doesn't get to $3,000 and people think you're a fool? ... Right now, as I like to say, the trend for gold in all of these non-U.S. dollar denominated manners is from the lower left to the upper right on the chart.

Where will gold go? I haven't the faintest idea. I couldn't tell you if my life depended upon it other than the trend is up ... the only people who are short who have made any money are those who are short of gold in US dollar terms. Anyone who is short of gold in foreign currency terms has had a very bad year and a half ... I would bet that six months from now it would be higher than where it is now. I would bet that in a year from now it will probably be higher than where it is six months from now. But where do I think it's going to go? I haven't the faintest idea.

Now the gold trade is very crowded ... So why do you still want to be in a trade that's crowded ?

Because gold in sterling terms, gold in euro terms, gold in yen terms, gold in Swiss franc terms keeps making new highs. I'm not smart enough -- and maybe when I trade another 10-15 years I'll be smart enough -- to be able to make a better answer to you. But the only answer that I can understand is that anyone who is short of gold in foreign currency terms is losing a lot of money. Anybody who is long of gold in foreign currency terms is, on balance, making a lot of money.

What about the IMF releasing their tons of gold into the open marketplace, are you worried about that?

Oh, I'm worried about everything all the time. Yeah, I'm worried about that. I'm worried about who might by it. I'm worried about the IMF selling it. I'm worried about where the gold is. I'm worried about everything. Do I lose sleep over it? No

But that's not changing your upward outlook for gold ?

No I think that gold ... in terms of foreign currencies has been making new highs.

Even if the gold tons from the IMF get dumped into the open marketplace and no one buys it?

That won't happen.

Do you have any speculation on who would buy it?

Some country.

Why do you think they haven't bought it already?

Because they don't feel any compulsion to have to do it yet. It's probably China, but China is very good at trading ... It's not going to tell anybody that it wants to buy it, it's going to tell everybody that it doesn't have any need or interest in owning it. Then that's just about the time they'll buy it. If they don't buy it, someone else will. Is it possible we could walk in one day and see gold down $30 on an announced IMF sale of the last 200 where no one showed up? Sure, it's possible. Sure, it's very possible. Do I think it's probable? No, not at all.

-- Written by Alix Steel in New York.

Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.

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