July 16, 2009
Some economists think that another bubble is what’s needed to get the economy moving again.
Gloom, Boom and Doom publisher Marc Faber said this is ridiculous, and that the Federal Reserve — which he holds responsible for creating the housing bubble — wants to do it all over again.
The central bank should not encourage excessive credit growth, Faber tells Moneynews.com’s Dan Mangru in an exclusive interview.
Between 2000 and 2007 the total U.S. credit market debt increased at five times the rate of nominal gross domestic product.
Unfortunately, Faber said, the next bubble is already here. This time it’s government spending and fiscal deficits that Faber thinks will double the government’s debt during the next six years or less.