Marc Faber says 21st century central banking has led to ‘no safe assets’

Economic Collapse News | 8 Sept 2015

Central banking has metastasized into a mixture of insouciance and ignorance. Today’s crop of central bankers believe they’re the smartest people in the room who have all the answers and can manipulate every facet of the economy. This thinking creates the booms and busts, the recessions and depressions.

Marc Faber, editor and publisher of the Gloom, Boom and Doom Report, believes 21st century banking and constant monetary policy interventions have created an environment where there are “no safe assets” anymore.

Speaking in an interview with Bloomberg TV on Monday, Faber described how it was safer in the 1950s to deposit your money at a bank, but today there is repeated fear, anxiety and unknowing of what will happen next.

“I think that because of modern central banking and repeated monetary policy interventions, there is no safe asset anymore,” he told the news outlet.

“When I grew up in the 1950s it was safe to put your money in the bank on deposit, the yields were low but it was safe. [But] nowadays you don’t know what will happen next in terms of purchasing power of money, but what we do know is it’s going down.”

When it comes to investing, Faber believes the best opportunity for bigger capital gains and a downside risk is in the mining sector, particularly in the field of precious metals.

“Commodities may still go down for a while but I don’t think they will go down forever,” he added. “I would rather focus on precious metals [such as] gold silver and platinum because they don’t depend on industrial demand as much.”

Faber also urged investors to not become too frightened of the negative news coming out of China.

“I think China from a cyclical point of view is in a very serious downturn but from a secular point of view I think there is still tremendous growth opportunity in the long run.”

In fact, emerging markets stocks may provide the best value for investors right now.

“In terms of relative value I don’t think emerging markets are cheap cheap but I think the return expectation I would have over the next seven-10 years by investing in emerging markets would be much higher than say U.S. stocks,” Faber said.

Right now, the United States stock market is overhyped, overvalued and too expensive “from a historical perspective.”

At the start of Tuesday’s trading session, the Dow Jones is up more than 265 points at 16,367.51. The Asian stock markets finished the day with mixed reactions. The Nikkei ended Tuesday in the red by 433 points, the Shanghai Composite closed relatively unchanged at 90 points higher and the Hang Seng Index was up a whopping 676 points.

[youtube https://www.youtube.com/watch?v=T06y6j65ICM]

 

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