Marc Faber, the editor and publisher of the Gloom, Boom & Doom report, has no faith in the dollar. He says precious metals are the only true currency.
"[The U.S. dollar] is not a desirable currency," Faber told CNBC, which described him as perplexed why the world has been so "enthusiastic" about the greenback. "I think the most desirable currency will be gold, silver, platinum and palladium. I still think the mining sector has embarked on a new bull market," he said.
"Over the last 12 to 24 months, many sectors have had huge declines,” he said. "And I see here, there are some opportunities."
Faber points to the gold miner ETF GDX. After falling more than 67 percent to its low on Jan. 19 of $12.40, the ETF has rebounded up to $20.58 in the last month. Faber thinks it's going higher, CNBC reported.
Gold futures are still up 15% on the year, according to FactSet, reflecting demand for safety earlier in the year as riskier assets were roiled by fears of a recession.
Some analysts attributed gold's decline Wednesday to recent comments by Federal Reserve officials, who suggested the central bank could still raise benchmark interest rates despite keeping them steady in March.
Higher rates would boost the dollar and make gold more expensive for investors who hold other currencies, pushing the price down.
Gold isn't the only space Faber finds hidden opportunity. He points to Asia where much of the economy and the market is still struggling.
"I think that in Asia, the sentiment turned very bearish at the end of last year and especially concerning China and the Chinese economy. And as a result of that, Macau gaming companies got slaughtered," Faber said. "And now they are, in my view, at a relatively attractive level. They started to move up: [Las Vegas] Sands China, Wynn China."
Wynn's stock tumbled 80 percent to its January low of $49.95. Since then the stock has made a powerful comeback to $95, but Faber believes it could still surge higher, CNBC quoted him as saying.
"I don't think it's a bargain by any means, but I believe China despite its near-term problems that could be very substantial, will in the long run be a very rewarding investment destination."
With U.S. stocks at year-to-date highs, Marc Faber is shedding some of his gloom and doom.
"Over the last 12 to 24 months, many sectors have had huge declines," the editor and publisher of the Gloom, Boom & Doom report told CNBC's "Fast Money" traders on Tuesday. "And I see here, there are some opportunities."
Faber points to the gold miner ETF GDX. After falling more than 67 percent to its low on Jan. 19 of $12.40, the ETF has rebounded up to $20.58 in the last month. Faber thinks it's going higher.
"[The U.S. dollar] is not a desirable currency," said Faber, perplexed why the world has been so "enthusiastic" about the greenback. "I think the most desirable currency will be gold, silver, platinum and palladium. I still think the mining sector has embarked on a new bull market."
Gold has surged 16 percent from its December low, but it is down sharply Wednesday.
Gold isn't the only space Faber finds hidden opportunity. He points to Asia where much of the economy and the market is still struggling.
"I think that in Asia, the sentiment turned very bearish at the end of last year and especially concerning China and the Chinese economy. And as a result of that, Macau gaming companies got slaughtered," Faber said. "And now they are, in my view, at a relatively attractive level. They started to move up: [Las Vegas] Sands China, Wynn China."
Wynn's stock tumbled 80 percent to its January low of $49.95. Since then the stock has made a powerful comeback to $95, but Faber believes it could still surge higher.
"I don't think it's a bargain by any means, but I believe China despite its near-term problems that could be very substantial, will in the long run be a very rewarding investment destination."
Faber warns that ultimately “you cannot grow an economy by just throwing money at people” and that “QE for the people” will be like “throwing gasoline on a fire.”
Faber is entertaining, has a good chuckle at the central banks and IMF’s monetary policies and laughs at the idiocy of the IMF’s recent counterfactual statement when Lagarde said the world economy would be worse off without negative interest rates:
… they will always say, if we hadn’t done this and hadn’t done that, it would be much worse. They have no proof for this assertion. In my view, it would have been better to let the crisis, already the first one in 2000, run its course and prevent the colossal credit bubble that was built up that then led to an even bigger crisis, and now they’re doing the same mistake.
According to Faber, credit as a percent of the global economy is up “very strongly” since 2007.
“[M]ost of the credit is now for transfer payments, and that is very negative for long term structural economic growth because it allows, actually, the government to become bigger and bigger and to have more regulations,” Faber said. “And I can tell you, I’m in the financial sector and I talk to people in the financial sector. Half the time is nowadays consumed with filling out forms by regulators.”
The financial crises in 2000 and 2008 would have been better if central banks hadn’t intervened, Faber said. He warns against the upcoming “helicopter money” policies:
“… the magicians at central banks, they always come out with a new trick and these negative interest rates that we have today, this is for the first time in recorded human history from the times of Babylon up to today that we have negative interest rates, and it’s not going to end well. That, I can tell you. But the sequence of how it will not end well, I’m not so sure. But they still have a lot of ammunition. What they can do is helicopter money. In other words, they can send you and Mr. Bloomberg and me and everybody, say a check for $10,000, and that is like throwing gasoline into a fire…. will it help the economy? That is the question. It won’t help in the long run. You cannot grow an economy by just throwing money at people.”
“… the less policies, the better it would be. We all learned at school that the free market and the capitalistic system is the best allocator of resources, and now what we have is the worst allocation of resources because it’s the government that tells you how these resources are allocated and they continuously expand their interventions, and I can tell you, I started to work in 1970. In the 70’s and early 1980’s, central banks actually never came up in discussions. They have now become like the messiah, and everybody watches what the central banks do and in the end, in my view, they will have, from a long term perspective, no impact whatsoever. Now can they move markets short term? Yes, but maybe not in the direction they want to.”
Faber recently told GoldCore in a webinar how he will “never sell his gold”, he buys “more every month” and believes owning gold in vaults in Singapore “is safest.”
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Dr Marc Faber on the promising performance of Gold and also says China could suffer near term significant setbacks but will perform very well over the long term.
