Have the quantitative easing measures / stimulus by various central banks done an irreversible damage to the long-term prospects of global economy, markets (equity and commodity)? Why / why not?
Marc Faber : There are people believe that Ben Bernanke and other central bankers
have saved the world’s financial system. I am not saying that they are
wrong but I am suggesting that the crisis occurred in the first place
because of the expansionary monetary policy – principally by the US
Federal Reserve since the 1990’s.
In other words, each time there was a crisis – be it S&L (savings
and loans) crisis, LTCM Hedge Fund crisis, Mexican peso crisis which is
also known as the Tequila crisis – ahead of Y2K, monetary policies were
eased and liquidity injection occurred. And then we had the Nasdaq
collapse in the year 2000.
The US Federal Reserve then again embarked on extremely expansionary
monetary policy, which created a gigantic credit bubble and home prices
When this came to an end, that’s when the crisis actually happened. Had
the US Fed not pursued very expansionary monetary policies and paid
attention to excessive credit growth, there would have been no crisis.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.