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Friday, December 6, 2013
The FED will continue to Buy Assets in order to try to support the Asset Markets.
Q: We have the non-farm payrolls data coming out from the US today. In your opinion what is the taper timeline that we could be working with and will emerging markets such as India see the same amount of volatility and uncertainty that we just saw a couple of months earlier in the year?
MARC FABER : When they introduced Quantitative Easing one (QE1) in November 2008, my view was that this would be a permanent status, in other words that we would go up to QE99 and that they would not abandon the asset purchases. Now there has been talk about tapering for the last 6-8 months, but in my view if they taper, it will be a very cosmetic gesture and on any sign of further economic weakness, or if asset markets decline again like the stock market drops 10-20 percent they will actually increase the asset purchases. My sense is that the Federal Reserve will continue to buy assets in order to try to support the asset markets. - in Moneycontrol