The U.S Economy: A Matter Of Concern (FNM, FRE)

In an interview focused on the latest economic conditions, Dr. Marc Faber said that the debt to GDP is 375%. Considering Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), the debt to GDP is more than 600%, leading to higher fiscal deficits and interest rates, which in the long run is not sustainable given the current conditions of both Fannie and Freddie.

Dr. Faber expressed his concern over the U.S. economy stating that the level of savings in the U.S. is much lower compared to that of developing countries. On the issue of the rise in gold prices, Dr. Faber praised the Reserve Bank of India as it holds only a small amount of its reserves in gold.