- “Whole Financial System Will One Day Implode” – Marc Faber- “I feel
like I’m on the Titanic …”- Arguing over the best assets akin to re-arranging
deck chairs on Titanic- Investors need escape plan and “safety boat”- Forget
Fed rate hike, Fed QE 4 is coming- Diversify and hold “commodities, precious
metals”
The highly regarded editor of the Gloom, Doom and Boom report, Dr. Marc
Faber has warned that “the whole financial system will one day implode”.
Speaking on CNBC’s Squawk
Box, he likened the global economy to the Titanic.
Dr. Faber believes that arguing over which assets are best in the
current environment is akin to re-arranging deck chairs on the ill-fated
Titanic. Only last month,
Stephen King – chief economist with HSBC – made the same analogy.
“When I look at the whole financial sector … I feel like on the
Titanic. We’re fighting about deck chairs -which assets are performing best
and we’re fighting over the best tables in the ballroom – but I think it’s
worthwhile to have your own safety boat and have your own ladder that will
lead you to your safety boat because I think the problem is that the whole
financial system one day will implode.”
Faber believes that the Fed and central banks will have no choice but to wade
back into another QE program rather than raise rates in an attempt to avert
the iceberg.
Such a move would likely have negative consequences for confidence in
central banks and paper currencies across the globe. Then, people may come to
realise that the central banks are not omnipotent after all and that currency
debasement is set to continue and even intensify.
Investors and savers need an escape plan. The safety boat which Dr.
Faber has in mind entails a highly diversified portfolio.
Among the basket of assets he proposes are a 25% allocation to stocks,
a 25% allocation to property, 30-year U.S. Treasuries and precious metals.
“I have advised my investors and also on this program that you have to
have a diversification and that you should hold around 25% in stocks, 25% in
real estate” … “And I would also hold some commodities, precious
metals.”
Faber remains long gold – but he prefers physical gold coins and bars
and opts for storage in Singapore.
Marc Faber on
Storing Gold in Singapore
Essential
Guide To Storing Gold In Singapore
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,178.25, EUR 1,049.57 and GBP
760.01 per ounce.
Friday’s AM LBMA Gold Price was USD
1,179.25, EUR 1,055.68 and GBP 761.27 per ounce.
Gold fell $0.50 or 0.04 percent Friday to $1,181.00 an ounce. Silver
slipped $0.10 or 0.62 percent to $15.94 an ounce. Gold rose 0.86 percent for
the week, while silver fell 0.99 percent over the 5 trading days.
Gold in U.S. dollars
Gold in Singapore for immediate delivery was up 0.3 percent to
$1,184.28 an ounce near the end of the day, while gold
bullion in Switzerland came under pressure and fell 0.6% to $1,177.40 an
ounce.
Gold in Asian trading saw safe haven bids push gold higher after Greece
failed to agree to a deal with its creditors. However, prices then came under
pressure despite falling stock markets and declining risk appetite.
U.S. Fed officials are still undecided as to when to raise interest rates.
At the Fed’s previous meeting they removed all date references in its forward
guidance and noted that the economic weakness may be “transitory” in nature.
By alluding to this the Fed is now dependent on published economic data and a
rate increase could happen at any future meeting. The wording of the policy
statement released this Wednesday will be interesting.
Greece left last minute crisis talks with its creditors after 45
minutes of negotiations. Prime Minister Alexis Tsipras arrived with no new initiatives
to the talks. nor did Greece’s creditors. Greece’s latest payment is 1.6
billion euros to the IMF by the end of June.
In late morning European trading gold is down 0.59 percent at
$1,174.13 an ounce. Silver is off 0.40 percent at $15.88 an ounce, and
platinum is also down 0.87 percent at $1,082.68 an ounce.
