Dr Marc Faber: Inflation, War, Gold

It's not just about money. There will, thinks Faber, be graver consequences.

The best bet for investors may be to buy a farm and escape from the cities, as a prolonged recession could lead to war, as the Great Depression did, said the Swiss national, who now lives in Thailand.

“Buy a farm and let your girlfriend work on the farm,” he said, to the applause of investors. “If the global economy doesn’t recover, usually people go to war.”

The publisher of the Gloom, Boom & Doom Report talked about how the biggest credit bubble in history was formed, how it imploded, and where we are going from here. While he places the blame on a lot of sources, he clearly holds a special loathing in his heart for the U.S. Federal Reserve. Faber said the Fed created a giant asset bubble by pumping liquidity into the system every time there was some kind of crisis in the economy, be it the tech collapse or 9/11. The result was that instead of having a bubble centred in housing prices or tech stocks, the Fed created a bubble in absolutely everything, he explained:

"We had a synchronized boom, and now we have a synchronized bust."

He expects the U.S. will keep printing money like crazy, and even joked that Fed Chairman Ben Bernanke appears to have Robert Mugabe as his mentor.It gets worse. Faber thinks that geopolitical tensions (mainly over energy) will lead to a "dirty war" between the U.S. and a China/Russia faction that targets people living in cities. He thinks many stocks will continue to crater and that the price of gold will eventually be higher than the Dow Jones Industrial Average.

But hey, at least he said commodity prices will do well once the economy recovers a bit. His advice >>>

"You want to own commodities in the ground, not derivatives at Citigroup."