Comments on: Marc Faber makes bullish comments on Bloomberg

By: A few comments on this blog’s harsher tone about the credit crisis - Credit Writedowns

Mon, 08 Mar 2010 17:14:31 +0000

[...] that I wrote a post at the depths of the market implosion highlighting a phrase by Marc Faber, “Don’t underestimate the power of printing money.” This quote has stuck with me as asset markets have soared in the intervening time. [...]

By: Is economic boom around the corner? - Credit Writedowns

Is economic boom around the corner? - Credit Writedowns — Mon, 08 Feb 2010 12:56:48 +0000

By: AITrader

AITrader — Fri, 13 Mar 2009 21:58:42 +0000

I agree. I was pleasantly surprised by the dollar strength and did not expect. With the mountain of debt the Treasury needs to float, even against the bigger mountain the Europeans are floating, gold *should* have been the natural safe-haven. Schiff and Faber’s call for a dollar collapse and resulting gold rise should have been relatively obvious. The fact it did not happen made me rethink the dollar versus gold as safe haven. I’m still on the fence, but at least for the near term the market is saying it prefers the dollar.

There is a lot of talk recently whether the dollar has double topped or double bottomed against the Pound, Euro, and Yen. A case can be made for either. Due to the current behavior of gold (denominated in dollars obviously), I am inclined to lean in faver of a double top rather than bottom, meaning we are likely to see further dollar strength rather than weakness IMO.

By: Edward Harrison

Edward Harrison — Fri, 13 Mar 2009 21:32:03 +0000

AITrade,

I like Faber too. I missed the dollar rally and am dollar bearish but not in a risky over-leveraged way as Peter Schiff has been.

http://www.creditwritedowns.com/2009/01/wall-street-journal-right-forecast-by-schiff-wrong-plan.html

You probably saw the Schiff-Mish smackdown a few weeks back.

I see people realizing that governments are monetizing their debt. Look at the Swiss and their competitive currency devaluation. And they are clearly printing money already. All of this means that sooner or later fiat money will devalue vis-a-vis gold. It’s only a matter of time.

By: AITrader

AITrader — Fri, 13 Mar 2009 21:23:20 +0000

I like Faber’s analysis and commentary generally speaking. If I recall correctly he was one among a chorus of small voices warning of the current collapse (which included Roubini, Schiff, and even Jim Rogers). His view of the coming dollar collpase and resulting boom in gold is similar to Peter Schiff’s.

What I don’t see in gold in the current market is it trading like a currency alternative. I do remember the days it did so back when it topped $850 during the 1980’s recession. But back then we were less than a decade past the Nixon shock. Prior to this gold was, in theory at least, a currency itself.

Could the current gold ceiling of $1,000 USD and the fact it doesn’t seem to trade in inverse correlation to the dollar in the last few months mean that gold is no longer percieved as a currency substitute? At least not perceived asa currency by a majority of traders? If so, this would explain the apparent recent miss by Faber and Schiff on gold’s rise and their parallel miss on dollar strength (or lack of it).