Gold Won't Save You?

I am a proponent of the average survivalist holding some precious metals, such silver bullion and coins that have silver melt value, and, even some gold is they can afford it. This is to use primarily as barter in the phase of an economic collapse where people realize fiat currency has no value or at least will not accept fiat currency.

Others look at Gold and Silver as an investment for hyper inflation. And to be sure there is substantial potential for becoming very well off by having significant holdings of precious metals in the (hopefully) later stages of a collapse where the country and economy are being rebuilt .

Enter Marc Faber's premise that "Not Even Gold Will Save You From What Is Coming", an article published on the well respected Business Insider.

Marc Faber, who authors the Gloom Boom & Doom newsletter, is usually pretty bearish on stocks and bullish on gold. Lately, though, gold doesn't seem like it can catch a bid.

"Despite the continued reverberations regarding the Cyprus bailout and its involvement of bank deposits, gold struggled to maintain the positive momentum created in the first two weeks of March and instead now looks very likely to move lower, towards $1580 an oz," wrote Deutsche Bank commodities analyst Xiao Fu in a note this morning.

So, what does Faber have to say about it?

This morning, on Bloomberg Surveillance with Tom Keene and Alix Steel, Dr. Doom was asked why gold wasn't holding up.

Here's his explanation:

When you print money, the money does not flow evenly into the economic system. It stays essentially in the financial service industry and among people that have access to these funds, mostly well-to-do people. It does not go to the worker. I just mentioned that it doesn't flow evenly into the system.

Now from time to time it will lift the NASDAQ like between 1997 and March 2000. Then it lifted home prices in the U.S. until 2007. Then it lifted the commodity prices in 2008 until July 2008 when the global economy was already in recession. More recently it has lifted selected emerging economies, stock markets in Indonesia, Philippines, Thailand, up four times from 2009 lows and now the U.S.

So we are creating bubbles and bubbles and bubbles. This bubble will come to an end. My concern is that we are going to have a systemic crisis where it is going to be very difficult to hide. Even in gold, it will be difficult to hide.

Faber is, of course, still bearish on U.S. stocks. He told Bloomberg that he sees "considerable downside risk" in the market.

Listen to Mr Faber yourself and see if he makes sense.