The Federal Reserve's money-printing policies continue to make gold an attractive investment even though it has hit a succession of new highs recently, Marc Faber, author of the Gloom Boom & Doom report, told CNBC.
Faber, sometimes called "Dr. Doom" for his contrarian investment perspectives and often dour views on the economy and stocks, rejected the notion that gold is in a bubble even as it begins to approach $1,500 an ounce.
In doing so, he related a story from a conference he attended this week where he asked the investment professionals in attendance if any had more than 5 percent of their personal assets in gold. No one raised a hand.
"If it were a bubble a lot of people would have gold. The whole world would be trading gold 24 hours a day," he said. "But I don't think it's really a bubble. I think gold is maybe cheaper today than it was in 1999, when it was $252.
What makes gold such an attractive investment is due in part to the Fed's move to keep the US dollar cheap as a way to boost asset prices and stimulate a recovery.
Gold is denominated in US dollars, so a decline in the greenback makes the metal—along with most other commodities—cheaper to buy on the global markets.
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."
In that environment, cash and bonds will lose value. Other good choices besides gold, he said, are "commodities, real estate, art, collectibles and so forth, anything that essentially cannot be multiplied at the same rate as paper money, that is subject to the printing presses of Mr. Bernanke."