Economist, investor and Gloom, Boom and Doom editor Marc Faber says gold and silver prices will drop for the next three months, but he's not about to sell his precious metal holdings.
“Not to own gold is to trust central banks and that you do not want to do!” Faber told Arabian Money.
“The other day, a Fed governor said, ‘If I had money, I’d short gold,’” Faber relates. “If you don’t have money, you shouldn’t be a Fed governor in the first place.”
Faber believes Federal Reserve Chairman Ben Bernanke will wait until later this year before printing more money, which will drive up the price of gold again.
He also sees a bubble in China. “Whenever you have a proliferation of fraud on a massive scale as we’ve seen recently with Chinese companies, it’s a very, very clear symptom of a bubble,” says Faber. “Of course, you have more Chinese fraud companies in the U.S. because the public doesn’t know anything about China.”
“The people who make money in China are mostly locals. There are some foreigners who have made money, but by and large, it’s a local story.”
The New York Times reports that some analysts say an economic slowdown could expose huge hidden liabilities in the (Chinese) banking system.
Many of the problems are tied to a $586 billion stimulus package Beijing announced in late 2008 and a huge wave of state-backed lending in 2009 and 2010, money infusions that were aimed at buffering China from the global financial crisis.
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