Tags: Faber | Stocks | Bonds | years

Faber: Stocks Will Beat Bonds Over Next 10 Years

Thursday, 27 Oct 2011 07:49 AM

Stocks will beat out bonds over the next 10 years thanks to loose monetary policies that tend to pump u riskier assets, says Marc Faber, author of the Gloom, Boom & Doom newsletter.

"When you print money everything goes up at different times, different asset classes," Faber tells CNBC.

"I think that stocks may still continue to go up, and I would rather own equities than government bonds for the next 10 years."
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Printing money, officially known as quantitative easing among other expansive monetary policies, allows governments to avoid paying down debts and focus on ways to pump up economic indicators.

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Marc Faber
(Newsmax file photo)
Even though all that money finds its way into stock markets and headline equities indices rise, the economy will feel painful side effects down the road.

"Each money-printing exercise brings about unintended consequences. These unintended consequences are higher inflation rates than had no money been printed," Faber says.

The Federal Reserve has expanded its balance sheet to nearly $2.9 trillion to boost the economy, mainly through buying government debt via two rounds of quantitative easing, moves that Faber has branded inflationary and damaging.

Some Federal Reserve officials say the U.S. economy may need another shot in the arm via a third round of quantitative easing, known widely as QE3.

"I don't think the Fed has run out of bullets," says New York Federal Reserve President William Dudley, according to Reuters.

"It's possible that we could do another round of quantitative easing, we could do quantitative easing round three."

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Stocks will beat out bonds over the next 10 years thanks to loose monetary policies that tend to pump u riskier assets, says Marc Faber, author of the Gloom, Boom Doom newsletter. When you print money everything goes up at different times, different asset classes, ...
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2011-49-27
Thursday, 27 Oct 2011 07:49 AM
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