Marc Faber, author of the Gloom Boom Doom report, recently spoke about his predictions for 2012.

The banks are in very bad shape. The reason for this is thaty they are so leveraged. Because of this, Faber is bearish on the banks. But he isn’t necessarily bearish on equities because the central banks will continue to print money in order to keep them afloat.

The central banks will continue to address the symptoms, but they won’t do anything to solve the problem. No country except Germany has kept their promise to keep their debt to GDP ratio under 60%. There is just going to be more can-kicking. They will never address the fundamental problems. The paradox of the situation is that we spent and borrowed to get into this situation, and the politicians are just going to spend and borrow more in order to try to get out of it.

The monetary policy of Ben Bernanke was to raise the prices of housing. But he wasn’t able to achieve that. The prices of everything else has gone up, but not real estate.

Marc Faber is still convinced that this entire system will be worth zero. But he doesn’t want to put a firm date on it. All of the derivatives will fail,. especially in the face of war. We don’t know how the war will look in 5 years. You need to diversify now in order to protect yourself. With equities, you probably won’t lose all your investment. Gold is a good investment, but there is a chance that the governments will try to take it all away. You definitely want to avoid government bonds.