Legendary Swiss market pundit Marc Faber recently advised a group of high flying investment managers to ‘buy farmland and gold,’ reports the Times of London.
Dr Marc Faber is an interesting and often controversial commentator. His greatest claim to fame is having advised investors to pull out of the stock market a week before the 1987 crash. Now his belief, he reportedly told an assembled group of pension and sovereign wealth fund members in Tokyo the US is going to go bankrupt. The best way to achieve international asset protection and diversification is to buy physical gold and farmland, he believes.
So who is Dr Marc Faber? Dr Faber moved to Hong Kong in 1973 and – although he still keeps an office there – he resides in Chiang Mai, Thailand, along with a number of our subscribers and friends. As well as having penned several books, Faber has his own monthly investment newsletter The Gloom Boom & Doom Report. Faber has been long term bearish about the American economy for a number of years and continues to be so.
According to Wikipedia, he concluded his June 2008 newsletter with the following:
The federal government is sending each of us a $600 rebate. If we spend that money at Wal-Mart, the money goes to China. If we spend it on gasoline it goes to the Arabs. If we buy a computer it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala. If we purchase a good car it will go to Germany. If we purchase useless crap it will go to Taiwan and none of it will help the American economy. The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I’ve been doing my part.
The reporting in the Times also offers insight into Faber’s way of thinking:
His investment advice, which was the first keynote speech of CLSA’s annual investment forum in Tokyo, included a suggestion that fund managers buy houses in the countryside because it was more likely that violence, biological attack and other acts of a “dirty war” would happen in cities.
He also said that they should consider holding part of their wealth in the form of precious metals “because they can be carried”.
One London-based hedge fund manager described Mr Faber’s address as “excellent, chilling stuff: good at putting you off lunch, but not something I can tell clients asking me about quarterly returns at the end of March”.
Needless to say, we agree with Dr Faber’s predictions. We have been telling people for several years to get out of the financial system by buying physical gold, as well as diversifying with multi-currency offshore bank accounts.
We also recommend purchase of productive and useful real estate, as opposed to real estate held for speculation. Farmland in countries like Paraguay, Uruguay and Brazil, for example, has proven to be an excellent investment over the past few years, but will only show its true value in the future. Our planned Paraguay Citizenship and Real Estate Investment Tour has been delayed somewhat due to pressure of work, but we are still planning to go ahead with it, now probably in early May. Anyone interested in coming along is more than welcome to contact us.