Tuesday, August 30, 2011

Faber: Gold is the safest bet in these financial crunch times- ...more- Balkans.com

Marc Faber, the publisher of “The Gloom Boom and Doom report” has said that paper money has lost its value and Gold is the safest bet in these financial crunch times. He also owns the Marc Faber Limited, which acts as an investment advisor.
Faber is known for advising his clients to liquidate stock positions one week before the 1987 October crash. He also predicted the rise of oil, precious metals, commodities and emerging markets in his book “Tomorrow's Gold: Asia's Age of Discovery”. In it he had specially predicted the rise of China. His prediction of the U.S. dollar slide since 2002 and the 5/06 and 2/07 mini-corrections also proved to be true.
“Financial conditions are today worse than they were prior to the crisis in 2008. The fiscal deficits have exploded and the political system [in both the U.S. and Europe] has become completely dysfunctional” he said, as reported by marketwatch.
He says that it is dangerous to only hold investments in cash since inflation would eat away its purchasing power since hyperinflation is the pattern to come.
He prefers stocks over cash and government bonds over the long term and personally owns dividend yielding Asian shares in his portfolio.
He views Gold as currency instead of an asset class and argues that since the US dollar fails in performing the function of money, why not hold money in gold and silver.
“Physical gold in a safe deposit box is the safest. Forget about huge capital gains. I would look at capital preservation. I want to preserve my capital”, he says.