If Marc Faber had to choose one asset class for the next 10 years it woud be gold. Cash and US treasuries would be be his least preferred decennial investment. US equities would be a reasonable choice for wealth protection, though not necessarily grow much when adjusted for inflation.
Dr Faber pointed out that with the US so deep in debt the Fed thinks it cannot allow asset prices to drop below a certain point because that would devastate the balance sheets of the banks with debt deflation. But Dr Faber holds that in the long run this is just rolling up another crisis for the future that will destroy the US dollar and cause an even bigger financial crisis.
Declaring himself the ‘most pessimistic of forecasters, nobody is more pessimistic than me’ Dr Faber outlined a scenario in which the dollar has to be replaced by another unit after a future inflation, and holders of cash and bonds lose virtually everything in the process.
Monday, September 27, 2010
Marc Faber: "Nobody Is More Pessimistic Than Me"
Posted by Nick