Marc Faber Issues a Warning to Investors on QE3, the Global Economy, Stocks and Bonds

Marc Faber is one of the most respected investment analysts and has for many years published the Gloom, Boom, & Doom Report. Faber is also a frequent guest on TV financial news networks.

Recently, Faber issued a warning that investors should pay close attention to…

On the QE3 program recently started by the US Federal Reserve:

“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.”

“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.”“I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system. It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets and you have at the same time increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development. I don’t want to build a new business. But what I may do is look around the world, where are the distressed assets. So I will go and buy existing assets, takeovers. But takeovers don’t add to employment. They destroy employment.Secondly, I would just like to mention one thing. This money printing business, they have been saying that for the last 15 years that bailing out LTCM were necessary. Then they say the NASDAQ collapsed after March of 2000. We need to create another bubble, print money. They created a gigantic credit bubble and the misery that we have today.”

“I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system. It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets and you have at the same time increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development. I don’t want to build a new business. But what I may do is look around the world, where are the distressed assets. So I will go and buy existing assets, takeovers. But takeovers don’t add to employment. They destroy employment.

“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.”

Pay particular attention to the last line in Faber’s warning. He is predicting that the US Treasury will once again confiscate privately owned gold. He recommends owning gold outside the USA, but this is obviously both impractical and unwise. The better solution is to own gold in a manner that protects your wealth from gold confiscation laws.

Rare gold coins fall outside the provisions in the gold confiscation regulations.

 

CNBC – ‘Massive Wealth Destruction’ Is About to Hit Investors: Faber

Dr. Marc Faber

Published: Monday, 2 Apr 2012 | 8:12 AM ET

By: Jeff Cox
CNBC.com Senior Writer

Runaway government debts have triggered uncontrolled money printing that in turn will lead to inflation that will decimate portfolios, according to the latest forecast from “Dr. Doom” Marc Faber.

Investors, particularly those in the “well-to-do” category, could lose about half their total wealth in the next few years as the consequences pile up from global government debt problems, Faber, the author of the Gloom Boom & Doom Report, said on CNBC.

Efforts to stem the debt problems have seen the Federal Reserve  expand its balance sheet to nearly $3 trillion and other central banks implement aggressive liquidity programs as well, which Faber sees producing devastating inflation as well as other consequences.

“Somewhere down the line we will have a massive wealth destruction that usually happens either through very high inflation or through social unrest or through war or credit market collapse,” he said. “Maybe all of it will happen, but at different times.”

Noted for his pessimistic forecasts and gold advocacy, Faber nonetheless lately has been telling investors that stocks are a good choice as central bank policies pump up asset prices.

He reiterated both his commitment to stocks and gold, but said investors also can find value in other hard assets, particularly in distressed properties in the U.S. South.

“InGeorgia, inArizona, inFloridatheir property values will not collapse much more and will stabilize, so I think to own some land and some property, not necessarily in the financial centers but in the secondary cities, these are desirable investments relatively speaking,” Faber said.

As for stocks, Faber said Fed Chairman Ben Bernanke’s policies will be friendly toward equity investors, at least for now.

The stock market is in the middle of an aggressive bull run that has seen the major indexes rise more than 25 percent from their October lows.

“I think that people should own some gold and I think that people should own some equities, because before the collapse will happen, with Mr. Bernanke at the Fed, they’re going to print money and print and print and print,” he said. “So what you can get is a bad economy with rising equity prices.”

© 2012 CNBC.com

2012: Buy Gold on the Dip

Gold is retracting, giving back much of its gains for the year to date. We are seeing gold at mid-January levels and it is finding resistance in any moves over $1675.  The projection for 2012 ,an election year, are for mostly good news and economic sunshine. Jim Rogers, Chairman of Rogers Holdings,  commented while on CNBC’s The Kudlow Report, This is 2012. There’s an election in november. There’s an election in france. There are 40 elections this year. The germans are having an election a year from now. You will see a lot of good news and a lot of money being spent. A lot of money being printed. Yes, this year’s fine. Worry about 2013. Be panicked about 2014, but this year, a lot of good news is coming out.

Jim Rogers isn’t alone he is join by Marc Faber , of the Gloom, Boom & Doom Report, who told CNBC, If you don’t own any gold, I would start buying some right away, keeping in mind that it could go down. He was later quoted in ETF Daily news: The possibility of the gold price going down doesn’t disturb me, says Faber.  Every bull market  has corrections. Adding that investors who own no gold today should immediately  begin to incrementally allocate no more than a total of 25 percent of their  portfolio holdings in gold.

We have commented on Fed Chair Ben Bernanke’s change of tone on QE3 & the economy after Rep. Ron Paul blasted him on the floor of Congress about the real value of silver & gold. This year is  should be viewed for investors as the summer before the long hard winter of recession. Now is the time to acquire precious metals & rare coins to build up your Tangible Asset Portfolio.

Marc Faber, Jim Rogers & John Paulson: Buy Gold on the Dips

Over the last week gold has retracted almost $100 an ounce. We could discuss all the technical reasons for this retraction: we could talk about the boost in the buying power of the Dollar in an election year. We could talk about the Euro Debt non-resolution, resolution. We could also bring up the ongoing tension in the middle-east. Honestly, all you need to know is Gold has retracted and now is the time to buy.

Marc Faber told CNBC, If you don’t own any gold, I would start buying some right away, keeping in mind that it could go down. He was later quoted in ETF Daily news: The possibility of the gold price going down doesn’t disturb me, says Faber.  Every bull market  has corrections. Adding that investors who own no gold today should immediately  begin to incrementally allocate no more than a total of 25 percent of their  portfolio holdings in gold.

Earlier in this current retraction Jim rogers also told CNBC, Probably none of us are going to own any paper money at all ultimately, but that’s later in this decade, because paper money is becoming very suspect everywhere in the world. He went on further to say referring to gold, Everybody’s having a wonderful time running the printing presses. The way to protect yourself at a time like that, historically anyway, has been to own real assets.

Finally reported in Bloomberg, billionaire hedge fund manager John Paulson of Paulson & Co said in a letter to investors, By the time inflation becomes evident, gold will probably have moved, which implies that now is the time to build a position in gold.

These men are some of the smartest guys in any room. Not all of their advice is golden but they all agree as retractions happen be prepared to acquire as much Gold as you can afford. Two out of the three men have gone public with the fear that the current system of fiat currencies will fail by the end of this decade. Leaving gold & silver as some of the few real assets you can own.