“I think interest rates forever in the US will be at zero. By zero I mean below the rate of inflation ; that was also the pattern after the recovery which began in November 2001 up to 2007…The fed fund rates went from 1% in June ’04 to 5.25% in Aug. ’06 but there was never any monetary tightening,” Marc Faber, author of “The Gloom, Boom and Doom Report,” told CNBC Thursday.
Faber believes that with Bernanke at the Fed chances of having real short term interest rates that are above 1% are almost non-existent.
Suggesting that the multiplier is broken forever Faber added that this as a result will cause a lot of inflation. Faber also said investors should avoid bonds and cash over the next 10 years and choose stocks instead.
