Tags: faber | short | treasurys

Faber: Short Treasuries Massively Now

By    |   Wednesday, 31 Dec 2008 11:48 AM

The 2008 boom in U.S. Treasurys has been so big that they are now headed for a crash, according to Gloom, Boom and Doom Report editor Marc Faber.

"I think the big trade in 2009 will be to go short Treasurys massively — I really mean massively — because we may not have inflation for one, two, three years," Faber told CNBC.

"You want to be in gold, silver, platinum, and also oil," Faber advises.

"If you believe in a recovery of asset prices as a result of money printing, you should be in hard assets, particularly precious metals."

Faber says he doesn’t see how the Fed can ever again tighten monetary policies to the extent that the Fed fund rate will be above the nominal GDP growth rate and above inflation.

Gold, Faber points out, is one of very few assets to increase in value during 2008.

“I think that, from here on out, gold will outperform 2 percent Treasury notes,” he says. “We’ll have essentially a tailwind for inflation in the long run and for precious metals.”

For investors who feel they must buy equities, Faber recommends resource companies like Freeport McMoran and Billiton.

Sales of U.S. Treasurys continue to rise, Bloomberg reports, led by the biggest rally in two-year notes in a month as traders seek the safety of U.S. government debt while stocks drop and tension in the Middle East increases.

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The 2008 boom in U.S. Treasurys has been so big that they are now headed for a crash, according to Gloom, Boom and Doom Report editor Marc Faber."I think the big trade in 2009 will be to go short Treasurys massively — I really mean massively — because we may not have...
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2008-48-31
Wednesday, 31 Dec 2008 11:48 AM
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