MARC FABER: Not Even Gold Will Save You From What Is Coming

By on March 28, 2013

Marc  Faber, who authors the Gloom Boom & Doom newsletter, is usually pretty  bearish on stocks and bullish on gold.


Lately, though, gold doesn’t seem like it can catch a bid.

“Despite the continued reverberations regarding the Cyprus bailout and  its involvement of bank deposits, gold struggled to maintain the positive  momentum created in the first two weeks of March and instead now looks very  likely to move lower, towards $1580/oz,” wrote Deutsche  Bank commodities analyst Xiao Fu in a note this morning.

So, what does Faber have to say about it?

This morning, on Bloomberg  Surveillance with Tom Keene and Alix Steel, Dr. Doom was asked why gold  wasn’t holding up.

Here’s his explanation:

When you print  money, the money does not flow evenly into the economic system. It stays  essentially in the financial service industry and among people that have access  to these funds, mostly well-to-do people. It does not go to the worker. I just  mentioned that it doesn’t flow evenly into the system.

Now from time  to time it will lift the NASDAQ like between 1997 and March 2000. Then it lifted  home prices in the U.S. until 2007. Then it lifted the commodity prices in 2008  until July 2008 when the global economy was already in recession. More recently  it has lifted selected emerging economies, stock markets in Indonesia,  Philippines, Thailand, up four times from 2009 lows and now the U.S.

So we are  creating bubbles and bubbles and bubbles. This bubble will come to an end. My  concern is that we are going to have a systemic crisis where it is going to be  very difficult to hide. Even in gold, it will be difficult to hide.

Faber is, of course, still bearish on U.S.  stocks. He told Bloomberg that he sees “considerable downside risk” in the market.

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