Marc Faber called unreliable investment in the currency


Central banks need to stop manipulating currencies and interest rates and to intervene in free markets, said Marc Faber in an interview at the St. Petersburg international economic forum. “Because of their intervention, investors just don’t know what to do. For example, if you buy a Swiss bond, you are guaranteed to lose money. Investors explain that it is better they lose some money on a reliable investment, than give the money to the Fund, which can lose a lot or everything,” says Faber.

The Bank of Russia clearly is doing his job better than the European Central Bank, the Federal reserve, the Japanese Central Bank, the Bank of England and many other large controllers, I’m sure Faber. “In my opinion, any interference of Central banks in free markets are destructive, they should have very little impact on the economy. With their function can handle computers that just allows money supply to grow at 2-3% per year”, — said the financier. In his opinion, if the regulators nevertheless decide to intervene in market mechanisms, their interventions should be symmetrical, that is to reduce interest rates when it is necessary to revive the economy and increase when there is a possibility of overheating. “But this does not happen, concludes Faber. — Major Central banks have just reduced interest rates to lows, gave loans to grow uncontrollable rate until 2007. Today, they again repeat their mistakes, not noticing a marked growth in lending.

The Bank of Russia does not commit these errors, this is a big plus, adds Faber.

All economies slow down in growth, and Russian is no exception, adds Faber. “The issue with the Russian economy like this: how its slowdown was triggered by sanctions from the Europeans as the fall in oil prices and how internal problems. In my opinion, 90% of the problems the Russian economy was caused by falling commodity prices, as well as, for example, in Saudi Arabia,” — said the investor.

According to Faber, investors today don’t understand how the world will look like in five to ten years. The important thing is to diversify your assets: invest about equally in the estate, equities, debt securities and precious metals, believes the financier. In addition, every investor should diversify their portfolios on a geographical basis. “Once upon a time, each a priori was keeping the money in the country: the Russians before the revolution of 1917 kept all the money here and just lost everything. Now anyone can invest in assets around the world, but for some reason, many do not.”

Faber is sure that the most reliable assets is gold, silver and platinum. “Courses of various currencies change in relation to these precious metals, gold rose from $255 per ounce in 1999 to $1921 per ounce in September 2011, then fell again and is now trading at around $1,300 per ounce”, — he told. Despite the fact that sometimes a variety of currencies strengthens relative to gold and other precious metals in the long term, given the easing of major Central banks, namely the precious metals will be the best investment, I’m sure Faber.

Marc Faber — Swiss investor, financier-analyst and publicist. In 1970-1978 worked at the investment Bank White Weld & Company in new York, Zurich and Hong Kong. In 1978-1990 he was the managing Director of the Hong Kong branch of Bank Drexel Burnham Lambert. In June of 1990 in Hong Kong founded his own investment company, Marc Faber Ltd. In 2009, Bloomberg named him among the five best financial experts in the world. The Financial Times calls him “an icon in the world of Finance. Faber is known that acting contrary to trends in the market. In 2002, in his book Tomorrow’s Gold: Asia’s Age of Discovery, he correctly predicted the rise in oil prices, precious metals and the growth of the economies of developing countries, in particular China.