Marc Faber: White House Should Let Markets Work

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

The US administration’s interventions in the market will not solve problems and will bring about unintended consequences, Marc Faber, author and publisher of the "Gloom, Boom & Doom Report," told CNBC Friday.

President Barack Obama on Thursday proposed new limits on the size and trading practices of big banks, to prevent excessive risk-taking.

"I don’t have a very high opinion of Mr. Obama," Faber told "Squawk Box Europe." "I was negative of Mr. Bush but I think Mr. Obama makes him look like a genius."

"Basically I think everybody will agree that in an economic system the market solves problems best."

The result of the slashing of interest rates to 0 percent in the autumn of 2007 was the surge in oil prices in the first half of 2008, because investors were looking for a place to put their money to get a return, he explained.

"The annual expenditures for oil of the US increased… you had another $500 billion tax on the consumer. That pushed the consumer down even more in his reduction of consumption," he said.

"Most people don’t have money left after the policies implemented in US," Faber said. "These people, they should all send a thank-you note to Ben Bernanke for printing money because it didn’t benefit the US, it benefited emerging countries."

Faber said he was against repealing the Glass-Steagall Act that was separating investment banks from commercial banks, but he does not think state regulation is the answer.

"When someone tells me the government should regulate the banks, they shouldn’t. It’s a disaster. But they should have interest rates that are high, that curtail speculation," Faber said.

Debt Is Bad, Invest in Stocks

The following crisis is likely to be in sovereign debt, because interest payments on government debts could reach between 35 percent and 50 percent of government revenue in 10 years, according to Faber.

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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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