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Monday 8 March 2010
Forget US Stocks – Buy Gold Every Month ‘Forever’: Faber
Investors should buy some gold every month “forever” or look to emerging market stocks rather than US shares, Marc Faber, editor of The Gloom, Boom & Doom Report, told CNBC.
Forget US Stocks – Buy Gold Every Month ‘Forever’: Faber
CNBC.com 04 March 2010
Investors should buy some gold every month “forever” or look to emerging market stocks rather than US shares, Marc Faber, editor of The Gloom, Boom & Doom Report, told CNBC.
“(Gold’s) quantity cannot increase at the same rate as you can print money, which will eventually weaken the US dollar,” Faber said on Thursday in a live interview.
“I’m not saying that the dollar will go straight away down because other currencies like the euro are even worse at the present time,” he added. “But eventually if you print money, the purchasing power will lose [value].”
Faber also said he believes Greece will be bailed out indirectly by the European Central Bank, but the plan won’t succeed. He sees other European countries following the same path.
“Other counties like Spain and Portugal will also have to be bailed out eventually, and it will lead to more monetization in Europe, one of the reasons why the euro has been so weak,” he said.
“The pain of the austerity will be very burdensome on Greece,” he added. “And eventually the economy can’t grow with the kind of budget they will have to enact and under these conditions, their currency is way overvalued.”
Meanwhile, the US Federal Reserve will eventually have to bail out some states such as Illinois and California, he said.
“If you compare the Depression years, we didn’t have credit cards and we didn’t have unfunded liabilities from Social Security, Medicare, and Medicade,” he explained. “In other words, in 10 years time, between 30 to 50 percent of tax revenues will be spent on interest payments on the government debt...and that will lead to a weak dollar.”
As for stocks, Faber said there are “better alternatives than US stocks.”
“If you believe in equities, I would rather buy Vietnamese shares than U.S. shares because the economy there will grow much faster than in the US,” Faber said. “Or I would buy Indian, Chinese, Malaysian shares.”
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Forget US Stocks – Buy Gold Every Month ‘Forever’: Faber
CNBC.com
04 March 2010
Investors should buy some gold every month “forever” or look to emerging market stocks rather than US shares, Marc Faber, editor of The Gloom, Boom & Doom Report, told CNBC.
“(Gold’s) quantity cannot increase at the same rate as you can print money, which will eventually weaken the US dollar,” Faber said on Thursday in a live interview.
“I’m not saying that the dollar will go straight away down because other currencies like the euro are even worse at the present time,” he added. “But eventually if you print money, the purchasing power will lose [value].”
Faber also said he believes Greece will be bailed out indirectly by the European Central Bank, but the plan won’t succeed. He sees other European countries following the same path.
“Other counties like Spain and Portugal will also have to be bailed out eventually, and it will lead to more monetization in Europe, one of the reasons why the euro has been so weak,” he said.
“The pain of the austerity will be very burdensome on Greece,” he added. “And eventually the economy can’t grow with the kind of budget they will have to enact and under these conditions, their currency is way overvalued.”
Meanwhile, the US Federal Reserve will eventually have to bail out some states such as Illinois and California, he said.
“If you compare the Depression years, we didn’t have credit cards and we didn’t have unfunded liabilities from Social Security, Medicare, and Medicade,” he explained. “In other words, in 10 years time, between 30 to 50 percent of tax revenues will be spent on interest payments on the government debt...and that will lead to a weak dollar.”
As for stocks, Faber said there are “better alternatives than US stocks.”
“If you believe in equities, I would rather buy Vietnamese shares than U.S. shares because the economy there will grow much faster than in the US,” Faber said. “Or I would buy Indian, Chinese, Malaysian shares.”
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