Faber gave a scathing response to Bernanke’s QE3 announcement. On his blog his left the message
If I had messed up as badly as Bernanke I would for sure resign. The mandate of the Fed to boost asset prices and thereby create wealth is ludicrous — it doesn’t work that way. It’s a temporary boost followed by a crash. – in CNBC
Faber gave an interview this morning with CNBC,
Central bankers are “counterfeit money printers” and Federal Reserve Chairman Ben Bernanke should resign for messing up the U.S. economy so badly, Marc Faber, author of the Gloom, Doom and Boom, told CNBC on Friday.
Bloomberg | Getty ImagesMarc Faber, managing director of Marc Faber Ltd. and publisher of the Gloom, Boom and Doom Report
He said Bernanke was one of the main proponents of an ultra-expansionist economic monetary policy that was to blame for the latest financial crisis. “If I had messed up as badly as Bernanke I would for sure resign. The mandate of the Fed to boost asset prices and thereby create wealth is ludicrous — it doesn’t work that way. It’s a temporary boost followed by a crash,” Faber said.
“QE helps rich people whose asset prices go up and whose net worth then increases but it doesn’t flow to the man on the street who is faced with higher costs of livingwith price rises. You just have a small economy that is booming but the majority of the economy is damaged by QE,” he said.
Bernanke announced on Thursday that the Fed would buy $40 billion a month in MBS, giving the impression that this time around there would be no time limit to the program, which would only stop once a sustained uptick in employment is visible.
“The money printers are responsible for this crisis. If we continue with this expansionist monetary policy we won’t be facing a fiscal cliff it will be a fiscal grand canyon,” he added.
Faber then responded to Mike Konczal’s comments that this latest round of QE would expand the scope of Federal Reserve policy and was “great for main street”
Faber poured scorn on the notion that QE helps the economy, declaring that commentators like Konczal would have said the same in 2001 when low interest rates led to the biggest housing bubble in the United States. That in turn led to the financial crisis of 2008.
“If we have an economic crisis in the Western world it’s because the government makes up 50 percent or more of the economy. This is a cancer that is taking away people’s freedom,” he said.
Faber went on to say on an interview on Bloomberg that the Fed monetary policy will destroy the world.