Quantcast
Other Stories

“I am 67 so I hope I don’t have to see all the [ultimate] disaster, but I am very, very bearish on the trend the world has embarked upon,” Faber ended the interview on a chill-down-your-spine note.

06 May 2013

Commodity Online
Behind the recent gold crash is no central bank manipulation, at least that is what one can gather from the words of the contrarian investor and the author of 'The Gloom, Boom, & Doom report', Marc Faber.

He knows that central banks in Asia are grossly underweight when it comes to gold. And the central banks in Western nations hold substantial quantity of gold. “So why would they depress the price of gold [as] a gift to the Asian central banks, to be able to buy [it] at a lower price? That I don’t [understand] entirely,” he said in an interview to Tekoa Da Silva of bullmarketthinking.com.

Faber fears that the recent collapse in gold prices combined with the “very strong” performance of US Treasuries could be signalling a deflationary shock. The scenario is possible despite all the money printing, he noted.

“I would say if you had a deflationary shock, about the last thing you should own are paper assets…But I think if the markets collapse…physical gold may be the [right] place to be relatively speaking,” he said.

He further added, “I’m still buying gold, and I will never sell my gold.”

But he pointed out a fundamental flaw wiith the investors, “they always buy assets subsequent to the prices having moved up substantially... “instead of continuously applying a disciplined investment strategy that implies diversification between real estate, cash and bonds, gold, and equities,” he noted.

He also noted that the monetary policy pursued by US Federal Reserve has created huge wealth and income inequality. He says that 1% of people have benefitted from rising asset prices.

“They have the same vote as the 1%, except that they are the 99%…so to them, it will be very acceptable to take money away from the 1%…In the end something [big] will happen…what I would really hate is if one day the government comes and says, ‘Okay, we’re going to take 50% of your money and give it to social programs…I think that is a real threat,” he pointed out.

The prevailing social conditions in the western world, the wealth inequality and the money printing... “it is absurd to think that you can create ecnomic growth by boosting asset prices,” he said.

“I am 67 so I hope I don’t have to see all the [ultimate] disaster, but I am very, very bearish on the trend the world has embarked upon,” Faber ended the interview on a chill-down-your-spine note.


YOUR RESPONSE
Click on the image to reload it
Click to reload image
COMMENTS (1)
Alisha
09 May 2013
It is an impeccable decision of buying gold when the rates are getting cheaper and stash them for future, it is worth investing on gold, taking the future perspective. See more ideas of investing in gold:- primebullion.co.nz
Name Email
Post
Reply