Marc Faber: In The Age Of Cyber-Terrorism, Every Investor Must Own Gold

Tyler Durden's picture

Authored by Shannara Johnson via Hard Assets Alliance,

Take it from “Dr. Doom”: own some physical gold and keep it out of the banking system.

Dr. Marc Faber, a legendary investor and the editor/publisher of the Gloom, Boom & Doom Report, is well known for his contrarian investing style.

In a recent Metal Masters interview with the Hard Assets Alliance, he noted that the biggest geopolitical risk for Americans today is not a conventional war but rather cyber-attacks that could take down the US power grid.

In such a scenario, gold would become an irreplaceable medium of exchange. But it’s not the only reason to own gold today.

Diversified Assets Outside the Banking System

Faber grew up in Switzerland right after World War II, a tough time that caused his family to distrust paper money and taught him the importance of precious metals as a safety net.

Faber remembers how his father talked about rich people as millionaires.

That, in the ‘50s and ‘60s and ‘70s, was a lot of money. Today, a million is nothing at all—small change. Unfortunately. When people talk about, ‘Oh, there is no inflation in the system,’ this is nonsense. Compared to assets, money has lost a tremendous amount of purchasing power.”

After working on Wall Street for over two decades, Faber’s assets consisted mainly of bonds, equities, and real estate. He says it was in the 1990s when he realized that “it’s good to have a diversified asset outside the banking system and not financially related” and began to purchase some physical gold every month.

The Fed largely ignores gold as an asset, he says, because “gold is an embarrassment to central banks.”

When the Lights Go Out, Bitcoin Goes Too

Regarding a possible war, Faber believes it’s unlikely that anyone will ever invade China or the United States. He thinks the true vulnerability lies in “wars that are fought not with tanks—they are fought by, say, somebody could switch off the light in New York, or the electricity, or the Internet. If you switched off the Internet, what would happen?”

This is where the merits of gold bullion become obvious, he says: “In these times, you actually want to have access to something physical that is a recognized medium of exchange.”

“Gold Is Driven by Money Printing”

When the Fed pursues loose monetary policies, Faber states, the people who benefit the most are the super-elite, the 0.01%. They have been moving ahead while the average American suffers:

“50% of American people have no assets. … They don’t benefit from money printing. Actually, they’re hurt because their cost of living is going up, and it’s going up more than the CPI would indicate.”

He believes “that the recovery, globally, is very weak” and the rapidly growing unfunded liabilities are a clear threat that could lead to another financial collapse.

“By being in equities and by being in gold, and also having some exposure to bonds, you have some diversification,” he says.

 

“Then you can hope when the hour of truth occurs, you will only lose, say, 50% of your assets, but your neighbor loses everything. So relatively speaking, you will have done very well.”

Click here to watch the full interview with Marc Faber for more advice on how to weather a crisis.

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tmosley's picture

Any second now, that power's gonna go out, and my jack-off fantasy will come true!

Raffie's picture

Does he not have a bad track record for gold/silver prices?

vato poco's picture

I love Faber to death, but he IS about 0-for-the last 10 years or so. he might someday be proven right ... might ... someday ...

proving once again that pessimism is a shitty long-term worldview. buy gold, sure. but then cheer the fuck UP, Faber!

Latitude25's picture

He bought his gold for under $300.  I'd call that winning.

vato poco's picture

yeah, he did. 15 or 18 years ago. anything since to brag about??

Latitude25's picture

Buy low, sell high long term.

BaBaBouy's picture

""When the Lights Go Out, Bitcoin Goes Too""

Buying Costco Generator to keep my Bitcoinz Alive and Well...

Latitude25's picture

Which just proves the inate superiority of gold.

tmosley's picture

Yeah, I'm sure his inane quip did that.

Latitude25's picture

Does bitcoin require electricity to be useful?

The_Juggernaut's picture

Headline made me laugh. Wtf did you think Faber was going to say?

Son of Thor's picture

I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do… http://disq.us/url?url=http%3A%2F%2Fwww.jobproplan.com%3A68UoF1LgzM-Yo3S...

BaBaBouy's picture

If internet goes down can you hear your Bitcoinz shrink and Disappear ???

booboo's picture

that is like saying if you live in a vacuum can you hear the air.

hibou-Owl's picture

I started buying gold at 309, brought the leg up and sold the lot at 1180.
It funded buying productive farmland, which I believe is the best next investment.
When we get the next collapse gold will be sold to liquidate debt. Farmland will provide food which is inflation proof (like Gold), and it currently attracts an EU subsidy.

SoilMyselfRotten's picture

What's he been wrong about? Telling people to buy gold? He doesn't typically throw numbers around but just espouses it's value and importance during a shitshow. I'll go out on a limb and guarantee you he will be dead right, some day.  :-)~

ludwigvmises's picture

He has been wrong when he said in 2010 that he was "100% sure the USA will enter hyperinflation over the next 10 years and the US Dollar will lose 90% of its purchasing power."  

sinbad2's picture

It's only been 7 years, and the dollar will collapse, and probably within 3 years.

It's not rocket science, just basic math, when those printed dollars come home, the magnitude of their stupidity will be obvious.

ludwigvmises's picture

No the Dollar won't collapse within 3 years.

spiral galaxy's picture

Reminds me of ZH! 0 for the last 10 years or so with gloom and doom. ......proving once again that pessimism is a shitty long-term view.

SoilMyselfRotten's picture

The reality is it's a shitty long term view ahead. If admitting that is pessimistic then my glass is half-empty.

ludwigvmises's picture

Think back to the 70s or 80s. What was people's outlook for the future? Think of your granddad, maybe your father. Both of mine told me "Son, our country's going to hell in a hand basket, it's all going down the tubes." Has it ever been different?

PrezTrump's picture

We'll keep stacking/pumping that sweet sweet crypto.  Great weekend huh ;D

e_goldstein's picture

Especially if you own Dash.

LawsofPhysics's picture

No power?

How will you spend your bitcoin?

ET's picture

Gold is elite money.

Cryptocurrencies were designed to divert money from gold so that the Chinese central bank PBOC could reach its goal for its gold reserve before the dollar suddenly loses its value.

takeaction's picture

Well.......Listened for years...I have sunk many a raft...will it pay off??   

.

.

.

NOPE.

ebworthen's picture

Windmills, that is where the money is at.

I'm telling you, windmills and windmill mining.

My i486 can crank out some serious "coin" hooked up to a windmill.

indygo55's picture

Buggie whips man! We will all go back to riding horses and wagons and I'm gonna be the Buggie Whip King!!

Obsidian Samctum's picture

Lolol boomers and their gold.

Latitude25's picture

Power lines are protected by protective relays.  These relays are basically industrial computers on private networks not connected to the www or in many cases on no network at all.  This is the way it is in the US.  In the EU they have started to deploy virtual relays on networks which I view as a huge risk to the power grid.  Hopefully the US will not follow the EU down this path of modenization amd extreme risk which could result in large outages due to hacking.

gmak's picture

 

i was wondering when jis wrinkled old *ss would show up again.

sheikurbootie's picture

The rich man's creed:

"Be right and sit tight"

If you follow every trend, you'll end up being the sucker.  By the time a trend is a trend, you up being the last to know. 

I sold off millions in real estate in 2005 (I saw the signs of a bubble) and bought gold.  I was right then, I'll be right soon again.

tmosley's picture

I'm sure you sold all your gold rather than riding it all the way down.

Dragon HAwk's picture

Eat the Rich, and steal their Gold.

sinbad2's picture

You are right, this isn't a new thing, it has happened in many countries over the years, and the only cure is to kill the rich and steal their gold.

But you won't get much support for the only known cure here, because most of the people here think, now don't laugh, but they think they are rich.

redc1c4's picture

if you own guns & ammo, plus know how to use them, getting gold will be easy after the crash.

Gods's picture

If I had to kill a man for a single OZ of gold I'd rather starve too death. Yes I do own lots of lead for protection not as an ivestment in finances.

EnragedUSMCExpat's picture

Gold, guns, ammo, antibiotics and medical knowledge will all be major currency when the shit hits the fan, and it will.

Proper Prior Planning Prevents Piss Poor Performance. 

 

Mon T's picture

Remember Faber will be right it is just a matter of when. Shep Wave is right in the meantime. Look at futures. How Do they know this on Friday?

Yellow_Snow's picture

What an old-timer, wish I had a nickel everytime he utters his doomsday predictions.

Ben A Drill's picture

The guy just said last week that he's not buying or selling gold. He said he would hopefully be smart enough to buy gold

at $1000.00 a oz.

How many different ways are there to say buy gold? At what price? I'm going to go out on limb and say.... buy silver under twenty dollars per oz.

Gods's picture

Platinum is looking a better buy. I do like silver as my second. Gold was a good buy in Dec. If BC is any indicator and I do think it is PM's should see a good run up soon.

Ben A Drill's picture

I bought 1 US Platinum Eagle BU 2016 last year. Looked like silver to me, so I was not impressed. Just wanted some Platinum, now, not so much.

I think I'm done buying coins anyways. Hate the mark up (premiums) If I ever do need to sell, I know I'm just going to get spot price, not the intitrinsic value of the coin.

Maybe I'm wrong about that but anytime you sell your not going to get a premium over spot price.