Marc Faber : New Crisis on Horizon Once Fed Support Ends

Feb. 2 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, discusses his investment strategy in emerging markets and the outlook for the U.S. recovery. He speaks from Troika Dialog's "Russia Forum" in Moscow with Andrea Catherwood on Bloomberg Television's "The Pulse."

Bernake and his crowd are latter going to have to chose: the stock maket, old bucky, or the bond market as none of the nonsense going on is substainable,. one of them is going to get thrown under the bus and if he really screws up which seeing how he has screwed up damn near everything all three may come down like a ton of hard rock at the same time.They won't be able to put Humpty Dumty back togther again next time if that happens.

Marc Faber : the Fed is endangering emerging economies

Marc Faber :"...My principal criticism is that the Federal Reserve can drop dollar bills onto the United States from helicopters as Mr Bernanke says - not from helicopters but electronically they can print money. The criticism I have is that Fed can control the quantity of money quantity that it drops onto the United States. But they do not control where it will flow to and this money has flown through the American trade and current account deficit to emerging economies and this has boosted the growth rates in emerging economies and their currencies. So the benefit of expansionary monetary policies has not been felt in the United States, but in emerging economies and that is my main criticism.

Now what happens if so much money flows to emerging economies is that you get bubbles over time - currency bubbles, stock market bubbles, real estate bubbles. The question is then how do these emerging economies’ central banks react to that. The Brazilian Finance Minister has just said we are in the midst of a currency war, a foreign exchange war and the central banks of emerging economies have a choice to do nothing - then they have high domestic inflationary pressures with accompanying bubbles - or they tighten monetary policies and their currency becomes even stronger and you have a speculative bubble in the currency. So the Fed has put them actually in a very difficult position and I believe we are going to end up with bubbles in precious metals and to some extent in emerging economies’ real estate and equity markets and every bubble eventually bursts. It does not have to happen tomorrow. It could last another year, but the Fed is actually endangering emerging economies at the present time. ..."

Fed Discloses Details of $3.3T in Crisis Loans

Dec. 1 2010 | The Federal Reserve on Wednesday revealed the details of some $3.3 trillion in emergency loans it made to financial institutions during the credit crisis as mandated by a revamp of US regulations. CNBC's Steve Liesman has the details.