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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Marc Faber on Gold, the Coming Big Bust, hyperinflation, and then Collapse

Commodities / Gold and Silver 2010 Apr 13, 2010 - 04:03 AM GMT

By: LewRockwell

Commodities

Marc Faber, the Swiss fund manager and Gloom Boom & Doom editor, warns that when the next crisis hits, 'you'd see people flee from all paper currencies into precious metals'.


Speaking in an exclusive two-part interview with The Daily Crux, Faber said: "When the percentage of interest payments to tax revenue gets too high, it will become clear to everyone that the government will need to print money in earnest to make these payments. That's when you're likely to see a crisis of confidence in the dollar".

"The question is will there be a crisis of confidence in all paper monies and what will the reaction of investors be? I would imagine that when the crisis really emerges, you'd see people flee from all paper currencies into precious metals," Faber added.

Does he think gold will fall anytime soon below US$1,000, or even US$900?

Faber wouldn't rule out a move to the US$950–US$1,000 level, where gold broke out last year.

"My sense is that if gold went lower than US$1,050, the Chinese would come in and buy some. I think they're waiting for lower prices"

"But honestly, I'm telling everybody in the world the same thing. I own my gold and I will never sell it, especially when I see clowns like Ben Bernanke, Larry Summers, Tim Geithner...

When I'm looking at all these characters in government, I want to own physical gold."

"We're just coming out of a seasonal period where gold is often weak, and heading into a period of seasonal strength, so it's possible gold may start outperforming here," Faber said.

Explaining how investors often miss on long term bullish trends by timing the market, Faber said:" As prices rise in a bull market, investors often try to be clever, and will sell thinking they'll buy the asset back when it drops back down a bit. Of course, oftentimes they never get the chance to do that, and end up missing a large portion of the rise.

You saw this when gold was trading in the US$900s last year. When gold finally broke out over US$1,000, many people thought it was too expensive and didn't buy."

"Of course, so far we haven't seen US$1,000 again," Faber added,

I can tell you if gold is trading at US$200, we'll all have bigger problems to worry about. None of us will have jobs. We'll all be bankrupt.

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Copyright © 2010 Business Intelligence Middle East

    http://www.lewrockwell.com

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    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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