Economic Danger Ahead

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Danger Signs Ahead but Bargain Stocks A-Plenty: Faber

by Michelle Baltazar by Marc Faber Recently by Marc Faber: The Frame of Mind of American Economic Policymakers

Leading contrarian investor Dr. Marc Faber wears his "ultra bearish" cap in his Australian visit, predicting another financial crisis could happen in the next five to 10 years — but even that doesn’t mean there aren’t any investment opportunities, particularly in Asia.

Visiting Australia as a guest presenter for Treasury Asia Asset Management (TAAM), Dr. Faber said that the Federal Reserve’s policy in the past decade only added to the market volatility. By keeping rates artificially low and pumping money into the system, equities, markets and economies will face "unintended consequences," including another financial crisis in the next five to 10 years.

This crisis has not been fully cleansed out of the system, he said.

He repeated his bearish views of the US dollar, which he believes will approach zero (not overnight, but it will happen) while many Asian currencies will rise on the back of a continually improving Chinese currency.

Against that environment, he highlights various investment themes including going long on gold and silver (sovereign funds will likely buy gold when interest rates are around zero), corporate bonds and Asian equities (many markets in Asia are near 20-year lows).

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Dr. Marc Faber [send him mail] lives in Chiangmai, Thailand and is the author of Tomorrow’s Gold.

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