Destabilizing the Economy

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Existing Monetary Policy Destabilising US Eco: Marc Faber

Recently by Marc Faber: The Frame of Mind of American Economic Policymakers

Investment Guru and Publisher of the Gloom Boom & Doom Report, Marc Faber, feels India has come a long way since 1973 in terms of reforms, market development and opening up of the economy.

On US economy

The Federal Bank has slashed interest rates which should have been economically supportive. But as oil prices went up, it was like an additional tax on the consumers and that must have pushed the consumer in America over the edge. So all I want to emphasize that the monetary policy assets — as structured in the US has a destabilising impact on the economy and also on the assets’ markets.

Fed’s costly mistake

If we agree that excessive credit and excessive leverage led to the crisis, then what the Federal Reserve is doing is giving a wrong medicine to the patient — they are giving the drug addicts more drug instead of sending them to rehabilitation, which is not good for the economy. So I think that the whole policy will eventually end in another disaster but we don’t know when and many things can happen in between.

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Dr. Marc Faber [send him mail] lives in Chiangmai, Thailand and is the author of Tomorrow’s Gold.

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