This could be the biggest threat to the economy
With the exchanges between President Trump and North Korea’s Kim Jong-Un, there has been increasing concerns of escalation, nuclear or otherwise, between the two nations.
Marc Faber, however, believes that the next great battle might be fought on a more subtle battlefield. As seen in Olivier Garret and Shannara Johnson’s piece on Forbes, the publisher of the “Gloom, Boom & Doom Report” finds an attack on the U.S. unlikely and points to cyber-terrorism as the real threat that everyone should look out for.
There’s no question that cyber attacks are becoming more sophisticated, and with the increased connectivity of the 21st century, such an attack could have devastating consequences. Faber gives the example of a major U.S. city such as New York having its electricity or Internet switched off. In such an event, the only assets that would hold value would be physical ones that are recognized as a medium of exchange.
Even bitcoin, the cryptocurrency valued for its security, would be rendered close to meaningless. Gold bullion, however, would not only keep its price but likely see a significant increase.
The threat of a cyber-attack isn’t the only thing making Faber hold onto his bullion. The publisher is known for his contrarian investing style, yet many don’t realize that his backstory provided hard lessons on the value of assets.
Growing up in post-WW2 Switzerland, Faber came to distrust paper money early on while learning to appreciate the safety net that precious metals provide. Talking to the Hard Assets Alliance, Faber recalls how a million dollars was once an almost exorbitant sum, yet today is something that is increasingly reachable.
Unlike some, Faber understands that inflation is real and sees no better example of it than the loss of the dollar’s purchasing power. The Fed continues to ignore gold while applying loose monetary policies that only benefit the wealthiest 0.01% – those with the largest number of real assets.
“50% of American people have no assets. … They don’t benefit from money printing. Actually, they’re hurt because their cost of living is going up, and it’s going up more than the CPI would indicate,” Faber explains.
Faber believes that investing in an asset outside of the monetary system is the only way to both shield yourself against a cyber-attack and protect your wealth against the constant erosion of currencies. To him, gold bullion remains the best possible asset to own that’s independent from banks, including central banks. It promises to keep its value against any threat, both virtual and physical.