Tuesday, August 24, 2010

Dr. Gloom With Dire Predictions

Faber: Buy India, Avoid Long Bonds, China
Friday, 20 Aug 2010 11:34 AM

Gloom, Boom and Doom editor Marc Faber advises investors to avoid long-term Treasury bonds and China."I think eventually inflation will accelerate," Faber told CNBC. "Whenever food prices go up, and grains have been very strong recently, with the sum delay, you get inflationary pressures."Faber expects the U.S. dollar will weaken. “That's the policy of the U.S. government, to weaken the dollar in order to cushion the downturn in the American economy," he says.He does, however, like the idea of investing in India. “If I look at the long-term potential . . . there is an emerging middle class and capitalism has now been truly endorsed by everybody," he says, plus India has some "very well run" companies.Faber also likes investing in Mongolia, which he “believes has the potential to be the Saudi Arabia of Asia because they only have 2.5 million people.”“It is a huge land mass and very resource rich," he says. "They have in the Gobi dessert, copper, gold, coal and much more would be found, in the future."As Mongolia’s second-highest export partner after China, Canada is also the largest foreign investor in Mongolia’s resource sector, with 25 firms active in the country, The Toronto Star reports.Canadian companies spent an estimated $500 million in 2008 on drilling and improvements to their properties, a figure that would grow rapidly if the industry expands.Significant deposits in Mongolia include uranium, molybdenum, iron ore, copper, and gold.

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