"I think Goldman Sachs is a very honest firm. They have a very strict compliance department compared to the others — they're like an angel. But they targeted Goldman as it stands as a symbol of Wall Street," Faber said.
With U.S. President Obama's ratings sliding due to the health care reforms, the government was going after the investment bank to distract the attention of the people, he claimed.
"Maybe the intention is not to hurt Goldman Sachs, but just to gain popularity with the middle class and the lower class of America, so they will perceive Mr. Obama to have done something against the evil of Wall Street."
Cash Will be 'A Disaster', Accumulate Gold
In light of the current economic environment, investors should not own cash as it is going to be 'a disaster', said Faber.
"If you print money like in Zimbabwe... the purchasing power of money goes down, and the standards of living go down, and eventually, you have a civil war," he added.
Faber warned that the mood has turned very very negative among certain groups of society.
Instead of holding cash, Faber, commonly referred to as 'Dr Gloom', advised investors to "gradually accumulate physical gold and silver" while those who want exposure to shares of gold exploration companies should buy them from time-to-time when they become cheap.