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Marc Faber, not exactly the biggest fan of Ben Bernanke, had some interesting words for the Federal Reserve Chairman.
Faber, the author of The Gloom, Boom and Doom Report, said in a Bloomberg interview that in light of the recent turmoil in financial markets “I can already smell QE3.”
“Next week we will see if Bernanke is a true money printer or just an amateur money printer,” Faber continued, referencing the upcoming Federal Open Market Committee (FOMC) meeting.
As for his view on the broader markets, Faber predicted substantial volatility in the months ahead. ”Stocks will be dropping 30%, then rallying 20%, and dropping another 30%. That’s going to be the pattern. And whoever can’t live with that shouldn’t be buying equities at all.”
Faber – who has been bullish on gold for many years – also noted that with real interest rates in negative territory, investors have few safe choices. U.S. government bond yields are extremely low, and are denominated in what he described as a weakening currency. Cash pays next to nothing, and equities are very risky. As a result, Faber reiterated his positive outlook on the yellow metal, but did not provide a price target at this time.