Q: The financial markets globally are obsessed with whether the Federal Reserve (Fed) will withdraw stimulus or not? What is your observation, do you expect the Fed to continue pumping the system with liquidity?
Marc Faber : First of all, whenever
the market is obsessed with one indicator, whether in the 1970s when it
was the money supply, or in the 1980s, when it was the deficit,
employment, it usually loses its relevance. But, I believe that the Fed
will continue to monetize. We had quantitative easing (QE)1, QE2 and now
we are in QE3.
In 2009 they started with QE1, (I believe) we
would go up to QE99 or there will be an unlimited QE over time, I still
believe that. The only thing is that over time the impact of QE or money
printing loses its traction. This QE has not boosted employment for the
ordinary people but has boosted the asset prices that are owned by very
small portion of the population, the 1 percent, it is not even 1
percent, it may be 0.5 percent that benefits from rising stock prices,
rising high end property prices in the Hamptons, in the US. Property
prices over the last 12 months are up 35 percent, but it does not
benefit the man on the street, but they will continue to do it. - in moneycontrol
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.