Marc Faber : Artificially low interest rates Creates Bubbles and mis-allocation of capital

Marc Faber Interview with The Financial Times 23.2.10

Marc Faber : before they default they will monetize , you will get higher inflation rate not tomorrow but say in ten years time and then eventually you have interest payment problem on the government debt which will balloon in the years to come , i think interest rates re likely to go up and as the government debt expands especially given the unfunded liabilities arising from Medicare Medicaid and Social Security , so i think they'll have a problem sooner or later ...so usually the governments what they have done in these situations is to monetize and trying to get rid of the debt with inflation ...I think all paper currencies will continue to lose their purchassing power as they have in the past hundred years or so ...I think the bailout of Greece is not favorable to the value of the Euro ...the ECB will talk tough and act softly...
Marc Faber artificially low interest rate created the Credit bubble of the last few years and the credit bubble then led to the housing bubble in the United States and we know what the result is ...and that was a consequence of artificially low interest rates ...clearly when you have artificially low interest rates you have mis-allocation of capital