This morning on CNBC Marc Faber the author of Gloom, Boom and Doom Report spoke on a number of issues streaming from the current Debt Limit debacle in Congress. First was US Treasury Bonds Faber said it was mind-boggling to hold a 10 year bond for only 3%. I don’t think the US will default in terms of not paying the interest on its debt. They will though default via a falling dollar as Bernanke begins printing more money, Faber told CNBC.
Faber commented further on the Debt Crisis in light of Moody’s warning of downgrading the US credit rating. They will get an agreement or fiddle around with the debt ceiling. I disagree with the bond bulls that are basing their case on a deflationary environment. In such an outcome tax revenues would collapse and stocks would fall heavily.
Gold was Faber’s final word as it often is for the renowned gold-bug, The risk is not to hold gold. Whilst there is the potential for 10 percent downside in the short term over the next 5 to 10 years the gains will be big. Or put another way, the purchasing power of paper money will fall.
With gold at a record high against the Dollar these words of wisdom should motivate investors to seek out metals for the near & long term.
Read further: CNBC – Buying US Debt ‘Mind-Boggling’: Marc Faber