Marc Faber believes that the dollar will weaken so much that it will eventually have zero value due to the well-worn printing press snipe.
Of course, such a prediction seems to assume no action on the part of the world or U.S. in the face of a weakening dollar, thus it really doesn’t mean much.
Still, even if this zero-value prediction does come true, the corrollary would be that stocks, property, and commodities will rise to astronomical dollar values.
This is because in the end, it doesn’t matter what kind of currency you want to measure these assets in. If they produce things people value, such as oil does, or such as a major U.S. corporation does, then they’ll be valuable. Yet bonds and cash-holders would be wiped out of course.
In fact, Faber favours stocks and commodities right now despite his dour outlook, so at least his argument is coherent if not very believable.
AZStarnet: “It will go to a value of zero eventually, but not right now,” Faber said today in an interview on Bloomberg Television. “Looking at Mr. Obama’s administration, it should already be there. I think it will take about 10 years until people realise that the fiscal situation of the U.S. is a complete disaster.”
The best investments right now are foreign currencies, commodities and equities, Faber said. Stocks will continue to benefit from the actions of Federal Reserve Chairman Ben S. Bernanke, he said.
“As soon as the S&P drops to 900 or 800, he will print money again,” Faber said, referring to the Standard & Poor’s 500 Index, which was at 1,084 today. “He’s a money printer. He’s nothing else.”
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