Marc Faber: US Dollar Worth Less Or Worthless?!

Marc Faber sees US dollar becoming worthless on fiscal policy 'disaster'

• INTERNATIONAL. Marc Faber the Swiss fund manager and Gloom Boom & Doom editor said the US dollar will become worthless when people eventually realise the fiscal situation in the US is a "disaster".
  
  Speaking today in an interview on Bloomberg TV, Faber said: "It will go to a value of zero eventually, but not right now".
  
  "I think it will take about 10 years until people realise that the fiscal situation of the US is a complete disaster," Faber added.
  
  The famed investor reiterated his long-held views that the Federal Reserve’s expansionist monetary policies are the causes of the financial crisis by creating a large amount of leverage in the system and creating a credit-addicted economy.
  
  "In my opinion, about 50% of tax revenues will be used just to cover the interest payments on the government debt. That is unsustainable. Then you'll really be forced to print money."
  
  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 Bernanke, he said.
  
  "As soon as the S&P drops to 900 or 800, he will print money again," Faber said.
  
  Referring to the Fed Chairman, Faber said: "He's a money printer. He's nothing else."
  
  While the dollar may rebound in the short term because it's been oversold, a rally won't last because the US will be forced to print more money to pay its debt, he said.
  
  Faber blames previous Fed Chairman Greenspan’s decision to hold interest rates at artificially low levels for precipitating the housing bubble and sees current Fed Chief Ben Bernanke repeating the mistake in the current crisis.
  
  "The Fed seems to ignore the fact that one of the causes of this crisis was the amount of leverage in the system. This is a credit-addicted economy," Faber told the European Investment Conference in Frankfurt on Thursday.
  
  He sees central bankers as having become hostage to inflated asset markets and questions how sustainable the next boom would be given that it was simply storing up more debt.
  
  Total US debt to GDP is now at 375%, without including the contingent liabilities from Medicare and Medicaid, he said.
  
  Faber sees this having serious implications for inflation.
  
  In his September issue of The The Gloom, Boom & Doom Report Faber wrote: "The future will be a total disaster, with a collapse of our capitalistic system as we know it today, wars, massive government debt defaults and the impoverishment of large segments of Western society."
  
  The years 2006 and 2007 were "the peak of prosperity" and the world economy is not likely to return soon to that level, he recently said.
  
  Unless the system is cleaned out of losses, "the way communism collapsed, capitalism will collapse".
  
  "The best way to deal with any economic problem is to let the market work it through."