Interest Rates : To increase rates would imply lot of pain in the economy temporarily, but in the long term, it would be desirable

What would you suggest the government to do to tackle the present economic crisis?

Marc Faber  : The Indian government has created a huge problem, as it has under-reported the rate of increase in the cost-of-living or inflation. And by not measuring inflation properly, the government has kept interest rates negative in real terms. What the government can do or should do is, though it can be painful, it should increase rates substantially, stabilise the rupee. To increase rates would imply lot of pain in the economy temporarily, but in the long term, it would be desirable. - in ET Now



Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.