Marc Faber Says Gold Is Cheap Right Now

That's his message, according to BullionVault News. Not only is he bullish, he deploys some figures that make him sound hyper-bullish:

"Gold remains the best bet as a currency these days because of the fact that the yellow metal supply is extremely limited. Gold at the current price of $1110 per ounce is less expensive than when it was sold for less than $300 per ounce years back..."

For the benefit of those who might reply "hunh?", he explains:

"A company's stock could be less expensive at $100 than when it was selling for $10, because earnings growth has outpaced the appreciation of the shares and therefore its price/earnings ratio has declined. So gold could be cheaper at the current price than when it was at less than $300 because of the explosion of foreign exchange reserves in the world, zero interest rates, the huge debt overhang, and the expectation of further money printing."

Note the metric he uses: central-bank reserves. Using it implies that Faber thinks that gold is a kind of money.

I should also note that Faber's a greenback bear right now.


I got this article courtesy of LewRockwell.com. Also there is this analysis by alternate-medicine guru Bill Sardi, which cites Faber's reasoning. Therein, he claims that the central banks are knocking down the price of gold along with the "banksters." The latter, he opines, are hoping to scoop up gold at a bargain - and the same may go for the former too.

However, he seems skeptical about the U.S. dollar heading into history's dustbin.