Marc Faber believes bonds are currently a bad investment.
“I disagree with the bond bulls that are basing their case on a deflationary environment. In such an outcome tax revenues would collapse and stocks would fall heavily.” Should stocks fall the Fed would initiate more quantitative easing.
Faber says people shouldn’t be buying bonds with yields trading near 3 percent.
Faber believes the dollar will fall and people need to invest in assets that are not dollar-based.
“I don’t think the US will default in terms of not paying the interest on its debt. They will though default via a falling dollar as Bernanke begins printing more money.”
Related Information in Prosperity View
- Quantitative Easing – Interest, Inflation Rate Tradeoff
- Asian Perspectives on U.S. Quantitative Easing
- Stocks are a Good Investment to Beat Inflation
- Our Economy: No-Growth and Immune to Stimulus
- A Liquidity Trap – Monetary Policy Unable to Stimulate the Economy
- How to Borrow and How to Lend – Lessons From The Interest-Only Mortgage
- Emerging Markets Still a Compelling Investment
- Debt – Bankruptcy, Late Payments, Credit Card Balances – It’s All Correlated
