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Marc Faber: Fed policies have been a ‘catastrophe’

The Federal Reserve is expected to announce another $10 billion worth of tapering on Wednesday, reducing the size of its monthly asset purchase program to $35 billion, from $85 billion at the height of the program. And though the hyper inflation many warned would be a consequence of its stimulative policies has not yet reared its head, Fed skeptics like Marc Faber still have strong words for the central bank.

"It's a catastrophe," Faber said Tuesday on CNBC's "Futures Now." "What the Fed has done is to lift asset prices, and the cost of living. In the meantime, as the cost of living increases, are higher than the wage increases, the typical American household income is going down in real terms."

Read MoreManufacturing gets boost from new orders: NY Fed

Faber, editor of the "Gloom, Boom & Doom Report," consequently believes that rising American inequality is a result of the Fed's actions.

"So the Fed is boosting asset prices. It leads to less affordability, people can't buy their homes anymore in the lower income group. Except, of course, the well-to-do people, they can buy homes because their asset prices have gone up and they own the assets," Faber said. "And so the more they print, the more inequality there is, the weaker the economy will become."

Read MoreAre the hawks about to turn up the volume?

Marc Faber
Adam Jeffery | CNBC
Marc Faber

The less-than-cheery investor says that this will only continue the malicious cycle.

"That will necessite, actually, the Fed to print even more money," Faber said. "And so inflation, over time, will accelerate and diminish the standard of living of the average American household."

Read More Blame the media for gold's decline: Marc Faber

So what's an investor to do?

"We are in manipulated markets," and "nothing is particularly cheap," Faber said. However, "I can say that gold is relatively cheap, compared to equities, at the present time."

Read MoreHere's the next big thing the Fed will talk about

—By CNBC's Alex Rosenberg

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