Why Fed will not raise rates in 2015 and why Chinese stocks are better than US equities - Analyst

"In my view, the Fed will not increase interest rates this year," Marc Faber, the editor of the Gloom, Boom & Doom Report editor said to CNBC pointing to dollar strength and recent disappointing economic data.

"The economy simply [is] not taking off, so I don't see there will be an interest rate increase."

Referring to the interest charged when one bank lends to another, Faber said that any move in the federal funds rate would be meaningless until it hits 3 percent. Currently, it is near zero percent. Thecentral bank is widely expected to raise rates in increments of a quarter of a percent.

Faber again expressed his view that the zero interest rate policies of central banks around the world have "grossly distorted financial markets and misallocated capital."

In 2015, European stocks will likely outperform U.S. equities and the spread between yields on European stocks and sovereign bonds is far larger than it is between U.S. securities.

In the meantime, Faber likes Chinese stocks better than U.S. equities, in part because he believes China's government has more tools available to ease monetary policy.

Although he considers the economy is weaker than Chinese leaders suggest, Chinese stocks can move higher because they have underperformed foreign markets for roughly the last seven years.

As the property market in China is also getting weaker, the analyst expects capital previously allocated to real estate to flow into equities.