Throughout the summer, the mainstream media continued to state that the Federal Reserve would be tapering its aggressive $85 billion per month bond-buying program. However, that did not come to fruition – the only person it seemed to understand this in the media was Peter Schiff – and it is unclear as to when it’ll happen or if it ever will.
Marc Faber, the publisher of The Gloom, Boom & Doom Report, told CNBC on Monday that he believes the central bank will not be tapering at all and rather will be increasing its quantitative easing measures. Akin to Ron Paul and Schiff, Faber is likening it to “QE-infinity.”
“The question is not tapering. The question is at what point will they increase the asset purchases to say $150 [billion], $200 [billion], a trillion dollars a month,” explained Faber, who added that every time a government introduces a temporary measure it becomes permanent. “The Fed has boxed itself into a position where there is no exit strategy.”
This month, the Fed will be holding a meeting to discuss the future of its asset purchases.
Although officials like to note that there is very little inflation occurring in the United States – price inflation is rampant – Faber retorted that there has been tremendous asset inflation in the markets.
“We are the bubble. We have a colossal asset bubble in the world [and] a leverage or a debt bubble,” added Faber. “One day this asset inflation will lead to a deflationary collapse one way or the other. We don’t know yet what will cause it.”
Faber may not be incorrect in his projections. It was reported that Janet Yellen, the Federal Reserve Chair nominee and potential successor to Ben Bernanke, has hinted at more inflation to improve the labor market and many Austrians concur that it is likely a possibility, especially with a weak economic recovery.