Gloom, Boom and Doom publisher Marc Faber says the best solution for Greece's economic problems is still terrible for the country’s citizens.
"The best outcome for Greece probably would be to exit the eurozone," Faber tells Barron's. "But the new Greek drachma would depreciate by 50 percent to 70 percent against the euro."
"The Greeks don't want their pensions paid in a depreciating currency. Nor do they want austerity, as their pensions and government salaries would be cut by 50 percent."
Faber think we won't see a "breaking point" in the European economic crisis for three to five years, which makes his support of gold as a necessary portfolio element even stronger than his contrarian usual.
“I am also warming to gold shares,” Faber says. “Gold corrected to $1,522 last December from $1,921 in September. It rebounded to $1,795 in February and is back down around $1,600. The correction could last longer, but given that governments will print more money, gold is relatively effective as a currency.”
“My preference is physical gold, but I would also own some gold shares, which have been decimated.”
According to proactiveinvestors.co.uk, Gold tumbled this week, shedding more than US$30 per ounce, as hopes for another round of quantitative easing from the Federal Reserve faded.
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