Marc Faber, editor of the “Gloom, Boom & Doom Report,” says the world must be "crazy" to give so much power to central bankers.
He called global central bankers "a bunch of professors" whose monetary policy programs have been a "complete failure."
He questioned central bank policymakers and the quantitative easing (QE) programs they launched in the U.S., eurozone, U.K. and Japan.
"We all agree on one thing, that the market economy functions best because the opposite is socialism, communism and central planning, which has been a complete failure, but now democracies have implemented a system that is basically run by a bunch of professors and they target inflation, they target exchange rates, they target the quantity of money, I mean, is the world crazy to give them so much power?" he told
CNBC Europe.
Faber said that central bankers' policies had been a "complete failure" and that pledges to extend stimulus measures would not work.
"Their policies have been a complete failure over the last 20 years and now the same people are desperate because gradually their losing their prestige and credibility and they're doubling up on medicine that hasn't worked and it won't work as long as the central bankers that we have now are in power the economies in the world will go down and not recover," he said.
He also wasn't impressed after the Bank of Japan on Friday said it will charge lenders that leave too much cash on idle deposit with it, introducing a negative interest rate policy for the first time as it seeks to shore up a stumbling economic recovery.
Faber said low and negative interest rates in Japan end up hurting most Japanese citizens, who have had to deal with a drop in their currency, the yen, among other problems. The rates “are rather negative than positive for the economy and for the typical Japanese household,” he said.
To be sure, officials at the U.S. Federal Reserve have penciled in four rate increases this year, but investors have long doubted the U.S. central bank will follow through and market turbulence could give officials pause. They must weigh low inflation and worrying signs from tumbling stock markets against a job market that is fast improving and potentially taking up economic slack.
Earlier this week, Bank of England Governor Mark Carney said he was in no hurry to raise rates after warning last summer the central bank might be in a position to move them up by the turn of this year.
“The answer to the timing question is unknowable,” Carney said in an interview with
The Wall Street Journal, when asked when the U.K. central bank might be at a decision-point on rates.
Meanwhile, monetary policy makers are gearing up yet again to counter the disinflationary fallout from slumping commodities and China’s slowdown,
Bloomberg reported.
“Markets are sitting there hoping central banks will solve all,” says Nikhil Srinivasan, chief investment officer at Italian insurer Generali, whose assets total 480 billion euros ($520 billion).
“There’s not a country in the world that should not ease its monetary policies,” Ray Dalio, founder of hedge fund Bridgewater Associates, said in Davos.