Marc Faber: US 'Financial Mess' Will Force Government to Take Your Gold

Friday, 02 Mar 2012 07:52 AM

By Julie Crawshaw

Economist Marc Faber, publisher of the Gloom, Boom and Doom report, says the government will seize privately held gold, even as he continues to buy physical gold himself.

“I prefer to play the commodity space by owning physical gold,” Faber tells Chiefsworld. “If I were an American, I would store it outside the U.S., because in the U.S., it is not completely unlikely that they will eventually take it away.”

“Like in 1933, gold will be purchased back by the government” because eventually the financial mess will be so bad that gold prices “will go ballistic, and the government will take away something from a minority, and not many people own gold."

Faber says he’s not in a hurry to buy gold, but accumulates gold every month because he believes the gold market is still under a correction.

Faber notes that the Chinese economy is slowing, and says it will slow further and perhaps crash at some point, which is why he is staying out of commodities other than gold.

Meanwhile, Nomura's Bob Janjuah says markets are so rigged by government policies that investing dangers lurk virtually everywhere.

"My personal recommendation is to sit in gold and non-financial high quality corporate credit and blue-chip big cap non-financial global equities," Janjuah writes at Zero Hedge.

"Bond and currency markets are now so rigged by policy makers that I have no meaningful insights to offer, other than my bubble fears."

Elsewhere, Gold traders are getting more bullish after billionaire hedge-fund manager John Paulson told investors it’s time to buy the metal as protection against inflation caused by government spending.

Twelve of 22 surveyed by Bloomberg expect prices to gain next week and five were neutral. Paulson & Co. is already the biggest investor in the SPDR Gold Trust, the largest exchange-traded product backed by bullion, with a stake valued at $2.9 billion, a Securities and Exchange Commission filing Feb. 14 showed.

Gold for April delivery, the most actively traded contract, rose $10.90, or 0.6 percent, to settle Thursday at $1,722.20 a troy ounce on the Comex division of the New York Mercantile Exchange.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

Marc Faber: US 'Financial Mess' Will Force Government to Take Your Gold