Marc Faber: U.S. stocks could collapse as much as 40%

Since the economic collapse, Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, has repeatedly stated that stocks in the United States are overvalued and could very well experience a correction, or an enormous collapse. Today, Faber is still holding on to these opinions, and thinks U.S. stocks could descend 20 to 40 percent.

Speaking in an interview with CNBC, Faber alluded to the S&P 500 index has being just under its record high by a measly one percent. If his prediction proves correct then a 40 percent drop send the S&P 500 from 2,116 to 1,270.

“In the U.S., the market could easily drop 20 percent to 40 percent,” Faber said Wednesday, noting that valuations are too high. He added that the S&P 500 carries a trailing price-earnings ratio of 21.24 as of late week, which is up from 19.54 the same time a year ago.

Faber listed other bearish elements, like the number of companies that have traded below their 200-day moving averages and a growing number of stocks declining. Moreover, Faber sees issues coming from the crash in commodity prices, which recently hit a 13-year low.

“Supplies haven’t gone up that much, and do not reflect the price weakness. The prices weakness is because of weak demand,” Faber said.

“Maybe this is the signal that there are strong deflationary forces, despite all the money-printing by central banks.”