If you do not know Marc Faber by name, perhaps you have heard of the Gloom Boom & Doom Report that he publishes. He is well known for criticism of monetary policies, as you might have garnered by the name of his report. In an interview on Bloomberg Television this morning, Faber was blasting Ben Bernanke and the FOMC for taking on policies of printing money.
Faber on more Federal Reserve stimulus:
It is difficult to tell what will happen. I happen to believe that eventually we will have a systemic crisis and everything will collapse. But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don't like bonds. I don't particularly like equities, but I think equities are a better space to be in than bonds.
Don't count on the money reaching the man on the street. Faber said:
The fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won't. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols ...Very happy. Very good for the Fed. Congratulations, Mr. Bernanke. I'm happy. My asset values go up but as a responsible citizen I have to say the monetary policies of the U.S. will destroy the world.
On gold, Faber tells you to own some gold but not in the United States. He said:
I think that the trend for gold prices will be steady, but the trend for the dollar and other currencies will be down. In other words, in dollar terms the price of gold will trend higher. How high it will go, you have to call Mr. Bernanke and at the Fed, there are other people actually that make Mr. Bernanke look like a hawk. So they are going to print money. And they have done it for ages already and where has it led? To record high unemployment essentially since the Great Depression and structural unemployment. Unemployment goes among low paying jobs, not high paying jobs. So, you ought to own some gold, but don't store it in the U.S. because the Fed will take it away from you one day.
If he is right about the U.S. and the gold issue, you likely want to own the ETFS Physical Swiss Gold Shares (NYSEMKT: SGOL) rather than the SPDR Gold Shares (NYSEMKT: GLD).
JON C. OGG
Filed under: 24/7 Wall St. Wire, Banking & Finance, Bonds, Commodities & Metals Tagged: GLD, SGOL