During a recent round-table discussion (accessible below), Marc Faber explained his asset allocation strategy and his incredulity at what the Fed is doing.
"I have around 25% in gold... and it's my insurance policy. It is important that one day when the so-called shit hits the fan - and I think the Fed is well on its way to creating that situation - you have access to your gold, that it is not taken away."
Faber goes on to discuss his lack of surprise at the Fed's un-Taper, the wealth in-equality impacts, and Asia's growing lack of faith in the USD.
Via Sprott Global Resources Roundtable,
On The Impact Of Fed Policy,
"When the Fed began Quantitative Easing 1 (QE1) in 2008, I said it would continue until QE99. So I'm not so surprised by the "no tapering decision." But this money printing has numerous unintended consequences and actually does not help the economy much. Asset purchases benefit maybe 1% of the population, the super-rich.
I'm not complaining because I own stock, bonds and real estate, but from a social point of view, it's undesirable because it creates widening wealth inequality and dissatisfaction among the majority of voters.
This could lead to more votes for a populist leader who will then tax the wealthy more heavily.
On Asian demand for precious metals,
"In the Far East, we have a tradition of owning physical gold, but what is new is the Chinese government encouraging citizens to own gold.
I believe that in the face of political instability and a lack of faith in the U.S. dollar, Asians will continue to accumulate physical gold and silver.
On holding precious metals,
I recommend an asset allocation of about 25% in equities; 25% in fixed income, securities and cash; 25% in real estate; and 25% in precious metals—gold, silver. I think I have around 25% in gold whereby I don't value my gold.
I have it and it's my insurance policy. It is important that one day when the so-called shit hits the fan—and I think the Fed is well on its way to creating that situation—you have access to your gold, that it is not taken away.
The full webcast replay is avalable here (click image for link to access)