The U.S. dollar has long held its position as the world's primary reserve currency. It's also considered a safe-haven currency because of America's robust economy and stable political system. But according to renowned global investor and economist Marc Faber, the greenback's dominance is now on shaky ground.
"I think that the U.S. dollar will become over time — not tomorrow, but over time — a worthless currency," he said in a recent interview with Stansberry Research.
Faber is highly critical of the U.S. central bank.
"The Fed, like other government agencies, and like other politicians and government officials, they are all lying. They never tell the truth. They tell the public what the public needs to hear," he said. "They can't afford the stock market to drop 50%. So they will print money."
Don’t miss:
- This Jeff Bezos-backed platform has made real estate investing as easy as ordering things on Amazon. Read how you can invest in rental properties with as little as $100.
- Elon Musk has reportedly bought 6,000 acres of land just outside of Austin. Here’s how to invest in the city’s growth before he floods it with new tech workers.
Faber believes that instead of having one global currency, it's best for the world to have many different currencies and that countries can trade freely with each other using their own currencies.
"In other words, when China trades with Saudi Arabia or China trades with Brazil or China trades with Russia, there's no need that transaction should occur in U.S. dollars. It should occur either in Saudi riyal or in Chinese yuan," he said, adding that it would be best for the world if the U.S. dollar system were "gradually phased out."
This holds significant implications for investors.
Dollar, Empire And Democracy
Given Faber's dire warning for the U.S. dollar, it's no surprise that he wants investors to look outside of America.
But it's not just about one country.
"My view is that as inflation will reaccelerate in the future, that investors should have money outside of the U.S. dollar region, and that includes the close allies and vassal states or provinces of the U.S., that are Canada, Australia, the United Kingdom and New Zealand — the woke countries are all in the American empire," he said.
For those looking for opportunities, Faber noted that some Chinese stocks are inexpensive, and you can find "very inexpensive stocks" in Latin America.
Having earned the nickname "Dr. Doom," Faber is never afraid to share his bearish outlook on economies and markets. But this time, he's questioning democracy itself.
"The two leading candidates are Mr. Trump and Mr. Biden. This must be a complete indictment of the system of democracy," he said of the U.S. presidential election.
"I have serious doubts about democracies anyway. It's a system that will die out, and we'll have totalitarian rule again, either through family traditions, in other words, an aristocracy or royalty or money royalty, elite, whatever it is, democracy is doomed to fail."
A ‘Relatively Safe' Portfolio
Considering that Faber is the publisher of the "Gloom, Boom and Doom" report, one might expect him to have a strong focus on safe-haven assets like gold.
While Faber invests in the yellow metal, he has a diversified portfolio.
In an interview with Kinesis Money earlier this summer, Faber revealed that 25% of his portfolio is stocks, 25% is real estate, 25% is cash and bonds and 25% is gold.
"It's not the ideal portfolio for performance, but it's relatively safe," he said.
Faber also warned investors that money in the bank is no longer safe, because "the banks are no longer safe" and "monetary inflation is very high."
Faber's portfolio is tailored to combat inflation. Gold, with its inherent scarcity — unlike fiat money, which can be printed without limit by central banks — serves as a valuable hedge against inflation.
Real estate is another popular inflation-fighting asset. As the price of raw materials and labor goes up, constructing new properties becomes more expensive. And that contributes to the appreciation of existing property values.
Investors can access the sector through publicly traded real estate investment trusts (REITs). And if you don't like the stock market's volatility, you can also invest in rental properties with as little as $100 through the private market.
Read next:
- Bezos-Backed Startup Lets You Become A Landlord With $100
- Blackstone Bet $13 Billion On The Impending Student Housing Price Surge. These Investors Are Doing The Same With $500
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
