The Federal Reserve has misled the public, and its fiscal policy has greatly damaged the U.S. economy. But the big Wall Street banks and brokerage firms will be bailed out by the Fed if they get in trouble because they're members of the same "club."

Those are the opinions of Marc Faber, economist, author, former Managing Director of Drexel Burnham Lambert, and editor of The Gloom Boom & Doom Report, a monthly investment newsletter.

"Let's say if I'm a manufacturer and I'm a bad businessman and I go out of business, who's going to help me? But Bear Stearns and the Wall Street elite because they're tied into the Treasury and the Federal Reserve and they lunch together, it's a club ... and they're bailed out. I mean it's a joke."

"The first thing that people should do is stop listening to the Federal Reserve in America, and specifically to Mr. Ben Bernanke," Faber said in a recent CNBC interview.

"They are misleading the public and investors by claiming they want to have a strong dollar and that they're concerned about inflation.

"But when it comes to actions, they show no concern about inflation and [about] the ordinary Americans and middle class at all."

Faber believes the Fed cut interest rates too sharply and should've stopped cutting at 4 percent.

"Great damage was done to the U.S. economy when the Fed rate was cut from September [2007] from 5 ¼ percent to 2 percent. These [current] rates are negative real interest rates, and the purpose of money is to be a store of value."

"When rates are negative it destroys the wealth of honest depositors who have their money in the bank and don't want to speculate...The Federal Reserve is the greatest speculator. They force people to speculate," Faber says.

In Faber's recent note to investors he writes with extreme pessimism that he expects 150 bank failures in the next 12 months.

"I think a lot of banks are already bankrupt," Faber says.

"And a lot of insurance companies and financial institutions, but they hide their rotten assets in level three asset categories, where you don't need to value them."

"I think the financial sector by and large has much larger problems than is perceived by the investment community. The stock market to some extent is telling you that, is giving you the price signals."

A bank failure does not necessarily hurt depositors or clients, Faber says.

"I don't think there would be anything wrong if Bear Stearns or another investment bank would fail because you could transfer the assets of clients to another investment bank or to another broker. I was working at Drexel Burnham," he says.

"We went bankrupt. Nothing happened to the clients. Their assets were transferred somewhere else."

Yet after the Bear Stearns bailout, the Fed has essentially promised bailouts for the largest firms if they go belly up, says Faber.

"It's a very questionable practice in life to have a financial sector that made so much money in the good days, and when something goes bad the government just bails them out. It sets a very bad precedent."