Monday, December 21, 2015
The FED will use whatever happens as an excuse to cut rates again and engage in unlimited purchases of assets
ETF.com: You've been a critic of the Fed and its policies. Do you think the latest interest-rate hike was the right thing to do?
Marc Faber: The best would be to have no monetary interventions. In other words, as Milton Friedman pointed out, to have a steady growth in money supply, fixed by the constitution at 2% or 3% per annum. We don't need a central planning authority to intervene and buy assets and boost the money supply or slow down the growth of money supply.
I'm against these constant interventions in the price of credit with monetary policies, but if they're going to do them, they should have raised rates in 2011 and 2012 when economic growth was much stronger than it is now. Right now, the global economy is slowing down meaningfully, so they should not have increased interest rates. But they did so to maintain some credibility.
The global economy is probably already in recession now. It will be more obvious in the U.S. in March or June of next year. At that time, the Fed will say, "Well, we didn't want to increase interest rates, but there was pressure on us to do so. So we increased them, and now we have a recession, and now we have to cut them again and flood the market with QE4."
They'll use whatever happens as an excuse to cut rates again and engage, as [ECB President] Draghi is currently doing, in unlimited purchases of assets. - in ETF.com
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Posted by Nicole Bourbaki