In a subscriber-only ETF.com interview, excerpted by Hard Assets Investor, Marc Faber weighs in on where gold’s headed and why he prefers the end product over the companies that mine it:
Q: Gold plunged immediately after the [Oct. 31] BoJ announcement [that it would expand its asset purchases], which came only days after the Federal Reserve announced the end of QE. Where do you see gold headed in 2015?
Faber: I think it will go up. But can it go down first? Yes. In general, I would say the game that central bankers are playing is very clear: They start out with QE1 in the U.S., and then that forced essentially other central banks to do the same, to also go QE. They’re kind of passing each other the ball. One stops, the other one starts. It’s basically a game designed to kill the purchasing power of paper money. I’m not sure they’re aware of it, but in my view, this is the beginning of the end of paper money in this century.
And asked about physical gold vs. mining shares, Faber says: In general, my advice to investors is to own physical gold and not gold mining shares. Because in a disaster scenario, you don’t know what financial assets will be worth, whereas physical gold is in your possession.”…Read more>>>
Acting Man: Gold market sentiment – A contrarian’s dream?
Gold Market Macro: Eastern physical demand versus Western financial supply – who will win out?