Central banks will turn on the printing presses this year and unleash a tsunami of dollars, euros, yen and other currencies as part of the much talked about currency war. Ostensibly, central banks all over the world are racing to the bottom while the rest of the general public suffers from devalued money.
A wide spectrum of central banks have fired shots in this post-financial crisis policy of weakening currencies, a defining fiscal measure that has been as prevalent as incompetence in Washington, Frankfurt, Tokyo, Ottawa and London.
The Federal Reserve revved up all cylinders at the start of the economic collapse and introduced more than $4 trillion into the economy, while the Bank of England underwent its own type of monetary easing by artificially low interest rates. The Bank of Canada slashed interest rates last month and the European Central Bank (ECB) has just started its own version of QE by pumping more than $1 trillion into the eurozone over the next 18 months. Let’s not get started on the Bank of Japan.
It’s a terrible time for any consumer or investor who strictly owns fiat money.
If there is a way to short the central banks then do it, says finance guru and famous contrarian investor, Marc Faber, who is also the editor and publisher of the Gloom, Boom & Doom Report.
Speaking in an interview with Barron’s magazine, Faber explained that he isn’t at all satisfied with the monetary policies being perpetrated by central banks everywhere, whether it’s bond-buying, low interest rates, money printing or market intervention.
“If I could find a way to short central banks, that is what I would do,” Faber said. “This is the year that people will lose confidence in central banks, mostly because of the failure of Abenomics in Japan.”
As we previously reported last month, the one way that Faber is shorting the central banks is by going long on gold, a precious metal that has been in a bear market for two to three years now. At the time of this writing, gold is trading at around the $1,275 mark.
“One way is to go long gold,” Faber added. “I recommend buying physical gold, silver, and platinum. If you are looking for bigger gains, I suggest either mining-company stocks or the Market Vectors Junior Gold Miners exchange-traded fund.”
Metastasizing a nation’s money is excused in the name of spurring economic growth and increasing lending on the part of financial institutions and borrowing on the part of consumers. All what it leads to is more debt, more malinvestment and more worthless fiat money.
Steve Martin says
Oh, banky, banky, banky, what is the banking point!