If Market Keeps Falling, Fed Will Keep Printing: 'Dr. Doom'

Falling stock prices will be met only with more money injections from the Federal Reserve, Marc Faber, the so-called "Dr. Doom," told CNBC.

Axel Griesch | ASFM | Getty Images Marc Faber

Speaking as global markets fell violently lower in the wake of the Japan earthquake and fears of a nuclear meltdown, Faber said a stock correction actually is healthy in view of how far equities have come from the March 2009 lows.

He also expects weakness to persist and the Standard & Poor's 500 to drop as much as 15 percent. Further, Fed Chairman Ben Bernanke will likely give the green light to another round of Treasurys purchases, which have come to be known as quantitative easing, he said.

"We may drop 10 to 15 percent. Then QE 2 will come, (then) QE 4, QE 5, QE 6, QE 7—whatever you want. The money printer will continue to print, that I'm sure," said the author of the Gloom, Boom and Doom Report. Later in the interview, he added, "Actually I made a mistake. I meant to say QE 18."

As for the situation with Japan specifically, he said the end result of rebuilding after the quake would be inflation and a positive for stocks, while Japanese Government Bonds, or JGBs as they are often called, would suffer.

"This huge selloff is an investment opportunity in Japanese equities, but if a meltdown occurs then all bets are off," he said.

The Nikkei Japanese stock market index has plunged more than 12 percent this week, its worst two-day drop in more than 20 years.

US equities have shown far less reaction but were poised to drop more than 2 percent at the open Tuesday. Faber, though, said the central bank would spring into action should the selling get out of hand.

"I think Mr. Bernanke doesn't know much about the global economy but he probably watches the S&P every day," he said.

"Until very recently the Feds have had very few critiques, very few people criticized the Fed's policies under Mr. Greenspan and Mr. Bernanke," Faber added. "Over the last few months, a lot of critical comments have come up about the Fed and its money-printing habit. The S&P drops 20 percent (and) all the critics will be silent and they will all applaud new money-printing."