Marc Faber: Let Big Brokers Fail; Buy Gold Not Oil

Marc Faber: Let Big Brokers Fail; Buy Gold Not Oil - Economy * US * News * Story - CNBC.com: "Let Big Brokers Fail; Buy Gold Not Oil: Marc Faber"

Fears that another major investment bank may get into trouble have hammered stocks recently but some analysts have said the major Wall Street banks were safe as the Fed cannot afford to let them fail.

"I think there's a good chance that the Fed itself will fail one day if they say 'We're not going to let you fail,' and the government will have to bail out the entire system," Faber said.

"If I'm a bad businessman and I go out of business, who's gong to help me?" he said. "But Bear Stearns and the Wall Street elite, because they are tied into the Treasury and the Federal Reserve and they have lunch together, it's a club and so forth, they're bailed out. It's a joke!"

"I think a lot of banks are already bankrupt … but they hide their rotten assets … in categories where you don't really need to value them," Faber said. "I think the financial sectors, by-and large, has much larger problems than is perceived by the investment community and the stock market to some extent is telling you that...

Buy Gold

Investors should go into gold as its price did not rise as fast as that of other commodities while the central bank keeps printing money, Faber said.

The Fed has been "misleading" investors on wanting a strong dollar, Faber said, as it kept lowering the interest rates. "When it comes to action, they show no concern about inflation."