Oct 05, 2009, 11.11 AM | Source: CNBC-TV18
The US markets ended lower for the second session yesterday on the back of mixed global cues and disturbing job loss data. Does this mean we’re still not out of the woods?
Marc Faber (more)
Director, Marc Faber Ltd |
Here is a verbatim transcript of the exclusive interview with Marc Faber on CNBC-TV18. Also watch the accompanying video.
Q: The concerns that the market and market participants seem to be grappling with is, is this looking like it is approaching bubble like territory or looking overbought?
A: Basically we have had huge fiscal stimulus packages and we had quantitative easing in basically all countries around the world. So, asset prices have recovered strongly after March 6 of this year, with stocks rising, commodity prices rising, and the dollar weakening again. And each time the dollar weakens it is kind of a symptom of some inflation in the system and excess liquidity building up. What we have is large cash positions around the world and zero interest rates. So, the zero interest rates and also the policy by the Federal Reserve to keep the matter very low level for a very long time, as was the case after 2001. With this in mind, money goes out of cash balances into something, either consumption or into some kind of assets such as equities or commodities or bonds or art or real estate.
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