In an interview on Bloomberg TV today, Mark Faber comments on the FED’s decision yesterday to start a QE (money printing) program of indefinite size and duration, starting at a rate of 40 billion per month of Mortgage Backed Securities (MBS).
The most interesting and frightening part of the FED’s press release reads “… If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability…”, meaning money will be diluted ad infinitum if need be.
In Mark Faber’s words: “The fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won’t. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols…Very happy. Very good for the Fed. Congratulations, Mr. Bernanke. I’m happy. My asset values go up but as a responsible citizen I have to say the monetary policies of the U.S. will destroy the world.”