Will an economic crisis and then enormous money printing transpire first or it will be an inflationary calamity? That’s the question that contrarian investor Marc Faber asked in an interview with CNBC this week.
Whatever the case may be, Faber believes “it will end badly.”
“We had a credit crisis in 2008 because we had too much credit in the economy,” explained the publisher of the Gloom Boom and Doom Report. “There is that much more credit as a percent of the economy now.” He added that today the world is in a worse situation than it was five or six years ago.
Faber concluded: “It will end badly and the question is whether we will have a minor economic crisis and then huge money printing or get into an inflationary spiral first.”
The contrarian investor has been bearish on the United States economy for a long time. Akin to others like him, such as Peter Schiff and Jim Rogers, he was one of the very few to understand the economic collapse in 2007 and 2008. Years later, he persists in warning of further economic erosion because of the Federal Reserve’s monetary policy endeavors and the enormous national debt levels.
For instance, Faber warned that the central bank may increase its quantitative easing initiative to as high as $1 trillion, especially considering that Ben Bernanke’s successor, Janet Yellen, has hinted at such a possibility of hiking its monthly bond-buying program.
“The Fed has boxed itself into a position where there is no exit strategy.”