Stocks don’t look particularly attractive right now, but relative to government bonds, equities look quite attractive.

One day, the entire financial system will collapse. It could be 3 years, 5 years, 10 years – and when this happens you would be much better off holding equities.

In the next few years, yields will be much higher, and the purchasing power of the US dollars will have decreased significantly.

If we look at the end of 2009, we experienced a very strong rally in stocks. However, Marc Faber was wrong about how the market would act in 2011. But meanwhile, people who were in precious metals have done very well. Marc Faber’s Asian portfolio has also done very well.

From 1999 to 2000, the NASDAQ doubled. But at no time during that period was the NASDAQ a good buy. And that was the symptom of inflation and a bubble. The same could happen with US Treasuries.