Marc Faber Believes US Treasury Yields May Rise Sharply
Marc Faber, author of "The Gloom, Boom and Doom Report," told CNBC today that the markets have created their own gold standard, as there is a high amount of uncertainty regarding other asset classes.
Faber said that apart from exchange traded funds that have proliferated the market, there has been more and more physical buying of gold. He pointed out that although gold outperformed bonds and stocks between 2001 and 2008, stocks stole the show in 2009. This indicated that retail investors own gold and this set of investors cannot switch between different assets, unlike institutional investors.
Faber has predicted that global economy will improve for the next six months as compared to March 2009. He said that he would prefer to buy Exxon (NYSE: XOM), Chevron (NYSE: CVX) and Schlumberger (NYSE: SLB) at this time.
Marc Faber also expressed his view that yields on US Treasury may rise sharply (between 10%-20%) over the next 5 to 10 years due to inflation and oversupply. In his earlier article, "Gloom, Boom & Doom Report," he had indicated that printing money is one way a government silently defaults on its debt. He explained that when a government prints more money, the repayment of creditors occurs in a currency whose purchasing power gets severely curtailed through the money-printing process.
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