Marc Faber Says Gold Still Cheap Relative To Fed Money Printing

Veteran Faber-watchers will be familiar with his point, but he is sticking to it. As he explained to CNBC, he's still saying that gold is cheap when the Federal Reserve's inflating is taken into account.

...Investments in hard assets will be good buys in the future as Chairman Ben Bernanke and the rest of the Fed continue the liquidity-friendly policies, Faber said.

However, that also will mean bad news for consumers, who will pay more for food, energy and a broad spectrum of other goods as inflation accelerates.

That will occur, Faber said, even if the Fed enacts incremental interest rate increases. That's because small raises won't be able to keep pace with inflation and thus won't slow down the hike in prices in real dollar terms.

"One day they will increase it by a quarter percent. But what does it mean when commodity prices are going through the roof, energy prices are going up, health care costs are going up, insurance premiums are going up?" he said. "Everything is going up. Only at the Federal Reserve is there no inflation."

Yep, Dr. Faber is still the same man. In pegging Fed tightening action as coming too late and being too little, the odds are in his favour. That's been the standard modus operandi ever since the Great Depression.