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Marc Faber Bullish on the U.S. Dollar

October 11, 2011 | About:

Marc Faber was interviewed by CNBC this morning. He is currently bullish on the U.S. dollar due to the fact that global liquidity is tightening.

"Where the dollar is concerned, the reason I'm actually quite positive is that global liquidity, despite of the fact that the ECB and the European governments will flood the market with liquidity to pay the sales out that, global liquidity is tightening. and whenever global liquidity is tightening, it's bad for asset prices but good for the U.S. dollar as was the case in 2008."

This is a significant departure for Marc Faber as he has always been a gold bull and he has previously said that the dollar and U.S. Treasuries were a disastrous investment.

Faber expects that the volatility in the markets could continue for six months. He currently favors the U.S. dollar over commodity currencies such as the Canadian dollar and Australian dollar.

Prior to this summer's stock market correction, Faber rightly predicted that there would be a sell-off in risk assets. In May 2011, he said: "I am now quite negative about most assets. If I were a trader, I would short some U.S. equities and as an investor, I am deferring any new purchases of the beneficiaries of the inflation trade (except for gold, which I accumulate every month regardless of its technical position)."

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