Marc Faber Gives Advice To Investors And Traders
Dr Doom , the Well-known investment adviser Marc Faber was in South Korea recently, where he took time out to speak to Lee Hyo-sik of the The Korea Times (South Korea) about his short- and long-term outlook for the global economy and markets,
From the Korea Times :
In this interview with The Korea Times, Marc Faber, better known as Dr. Doom for his negative views on the global economy, said that to hedge against rising inflationary risks, long-term investors should In an interview with The Korea Times, Marc Faber, better known as Dr. Doom for his negative views on the global economy, said that to hedge against rising inflationary risks, long-term investors should buy stocks and gold bars, rather than hold onto cash., rather than hold onto cash.commodities, and currencies.Dr Faber projected the United States will go into hyperinflation similar to that of Zimbabwe,
"The U.S. central bank has structured and introduced policies without considering exponential credit growth and its consequences. I think the Federal Reserve is not independent and has become a mere political apparatus of the U.S. government. Keeping interest rates artificially low and printing money has and will cause an asset bubble,” Dr. Doom said
"People have been encouraged to borrow and speculate on stocks and other assets over the past year because they do not earn anything from putting money into bank deposits due to the record-low interest rate" he said. “It will again create an asset bubble and next time when it bursts, we will not be able to respond to it in the same manner as we can now.”
"The United States will not raise interest rates for many years to come because it needs to pay off its huge debts. With higher interest, its borrowing costs will go up, putting a heavier financial burden on the U.S. government. It means the interest rate will remain low and the U.S. will not be able to narrow fiscal deficits for many years. In turn, too much money in the economy will raise costs of everything, including healthcare and education, giving rise to hyperinflation,” Faber said.
He added that The U.S.-led hyperinflation will spread to the rest of the world, advising investors to put money into inflation-hedging assets, such as stocks and gold bars.
“Now, risks are too high, compared to expected returns. Investors should increase their cash positions. I would rather take a long vacation and wait until the market moves either upward or downward. Given a list of unfavorable factors, I bet on a market downturn. It won’t be too late for investors to act after the market sends visible signs of its direction,” he said.
Source The Korea Times
