Thursday, January 5, 2017

I do not believe much in Fiscal Policies

Since you mentioned earnings and overall growth projections for the Indian economy through next 12 months, we conducted a poll at ET Now talking about what market participants feel the market can do in terms of pure returns for this year. A majority believed that the Indian market can make a fresh attempt at record highs in 2017. That is the Nifty going past 9000. Do you think that is possible?

Marc Faber : I am not sure we will be on a record high right away but people pursue expansionary monetary policies and we have talked before about the Fed increasing rates. I think if the Fed increases rates, they will make sure that the rate increase does not lead to real interest rates going up substantially. If you have inflation at say 5% and you have a Fed fund rate at 2.5%, you are still negative real rates of 2.5% .  In India, pro-growth monetary policy will be pursued and you also have a fiscal policy that is pro-growth. Theoretically, I do not believe much in fiscal policies but this is the view of economies. Over time, the rupee will continue to weaken and stocks will adjust on the upside.

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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.

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