Marc Faber spoke to Bloomberg Television this morning about the increase in China’s reserve requirement, inflation in China, and Ben Bernanke’s remarks this morning.
“I think we have already have a property bubble but that doesn’t mean the whole economy will go into a recession. I would add to it that that even these days the slowdown in China, it’s a very large country, like the U.S. was in the 19th century and still is today, so you’re going to have some sectors of the economy going into recession and other sectors still expanding.”
(On investors pulling out of China) “Not necessarily because even if they tightened, interest rates are still far below the true rate of inflation, and I talk to a lot of people in China, my view would be that inflation in China is running up around 10% per annum.”
(On Bernanke’s defence of QE2) “I think that his defence has to be expected. He has to defend them himself for the repeated mistakes he committed in the past. And all I would say is that basically the problem of the world is that the U.S. over consumed and spent too much on consumption which was then reflected by the growth in the trade and the current account deficit.”
The video, courtesy Bloomberg Television:
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