Marc Faber : advices to avoid industrial commodities copper, nickel, and zinc, for the time being

Marc Faber believes China’s economy will slow down and likely crash in 9-12 months. He suggests avoiding industrial commodities, like copper, nickel, and zinc, for the time being and avoiding companies exposed to Chinese economic growth. Faber finds wheat, corn, and soybeans attractive and believes these agricultural commodities are in the process of making major lows.

Marc Faber recommends copper, nickel, iron and oil amongst the Commodities and Thailand and Singapore among the Emerging Markets

The system will be bankrupt in five to ten years

According to Marc Faber author and publisher of the Gloom Boom and Doom Report , the developed economies have now become more risky than emerging economies , in a recent interview with the Swiss news paper Letemps.ch he stated that The United States will seek to create an inflation of 6% per year, but will not be able to do it without problems on debt. To create this inflation rates will be kept exceptionally low, approaching zero as at present.

The deficit this year will be 1.6 trillion U.S. dollars and in the medium term is unlikely to be less than 1,000 billion, this will result in five or ten years, a payment of 35% of fiscal revenues and the interest.

The banks, now feeling safe will take the money and will pay 0% to 5%. This will penalize savers and enrich the banks.

In five or ten years we will have the effect of a new crisis, resulting from the bubble of borrowing countries. Some countries will fail, starting with the United States, which is already technically bankrupt.

Usually emerging markets are at bigger risk of failure, but today they have a financial situation better than many developed economies.

The most interesting markets for Faber are Thailand and Singapore, but also India and China, although on the latter prices are already very high.

Good prospects, again according to Faber, for commodities such as copper, nickel, iron and oil. Regarding gold, Faber maintains a 10 to 15% of the portfolio. On agriculture: they represent the best long term investment.

Regarding the stock market: it may grow, but in relation to the amount of money that will be printed.