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Investment Guru Urges Eastern-Centric Approach Recently by Marc Faber: The Frame of Mind of American Economic Policymakers
Turkey is likely to become less Western-oriented and more Middle Eastern- and Asian-focused in coming years, according to Marc Faber, an investment guru who visited Istanbul as a guest of Garanti Masters Private Banking. “We have not lived through the latest crisis yet. The economic, social and geopolitical watch will be reset permanently after this crisis,” said Faber, who spoke to a number of select guests Tuesday night at the Swissôtel. Faber is the publisher of the Gloom, Boom & Doom report, an in-depth economic and financial publication, which highlights unusual investment opportunities around the world. In his presentation, Faber questioned whether expansionary monetary policies and large budget deficits would lead to high inflation. “The global economic revival and asset bubble experienced simultaneously between 2002 and 2007 caused an immense collapse,” he said. “The capital devastation caused by the decline in asset values in the last crisis is unique for the period since World War II. Expansionary monetary policies, which have caused the recent credit crunch, are the wrong cure for the problem. What other option does the Federal Reserve have when the ratio of the total debt of the credit market to gross domestic product is 375 percent?” Prisoner of inflated markets Noting that central bank experts have become “imprisoned” by inflated asset markets, Faber said: “When necessary, we should look at whether tight monetary policies are still applicable. A short-term boom stemming from expansionary fiscal and monetary policies is also a possibility. But how long it can be sustained? This poses a question. The current crisis has failed to clear the system. Policies introduced as a measure to combat the turmoil have the same content as the ones implemented after 2001.” November 6, 2009 Dr. Marc Faber [send him mail] lives in Chiangmai, Thailand and is the author of Tomorrow's Gold. Copyright © 2009 Hurriyet Daily News and Economic Review
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