(Chicago Tribune) Investors, who think they are safe hiding in bonds, are playing with fire, The Gloom, Boom and Doom Report publisher Marc Faber warned in Chicago.

"When the turn comes and inflation and rates rise, all the money in bonds will move into equities," he told analysts and money managers from throughout the world at the CFA Institute's summer seminar.

In the near term, Faber expects the Federal Reserve to keep rates low, but he warned, "money printing is extremely dangerous." If he was the Federal Reserve chairman, he said, "I'd push rates up and push down the deficits. It would be painful," but in the long run would relieve the threat to the global economy that comes from massive levels of debt.

In 2007, Faber was warning investors to avoid stocks as he observed the growing threat of a financial meltdown. Now, he says the cure for the meltdown is a threat to bonds, which would plunge in value if rates and inflation rise -- as he says they ultimately will.

"At some point people won't want to be compensated at two percent" in bonds, and will put money into stocks, he said. "Government bonds will not be a good investment for the next 10 years."

While Faber sees opportunity in Asian stocks and developing frontier economies, he thinks investors should prepare for financial problems in the U.S. and Europe. He suggests buying physical gold and keeping it overseas in places such as Singapore and Hong Kong. He considers gold exchange traded funds vulnerable financial products rather than a solid asset. He also suggested investors buy art as a hard asset and farmland because he expects food shortages as emerging economies develop. Rather than investing in international companies, he said he'd buy local companies with local brands.

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