Sunday, February 5, 2012
Marc Faber : When assets become like cash, it may be safer to hold your money in the bank
Marc Faber : Ten years ago we had relatively low inflation in the Western world. Now, with interest rates at zero, we have high asset valuations. Asset prices have gone ballistic in stamps, modern art, wine, you name it. Gold, silver, other commodities, equities in emerging markets, high-end real estate -- all have done well. When assets become like cash, it may be safer to hold your money in the bank. If asset prices collapse, you'll be better off in Treasury bills with zero yields. Then the central banks will print money and bail you out. At least you'll get your principal back. With money-printing, you never know what sector of the economy will be inflated. Maybe we have had profit inflation and there will be a severe correction. I don't expect corporate profits in the U.S. to collapse by more than 20% in the next 12 months.
Posted by Biz TV