Marc Faber identified several issues curbing an economic recovery, such as the real estate market, which he said had never been so “overbuilt.” He also said there was lots more deleveraging ahead.
“In the Western world, including Japan, the problem we have is one of too much debt and that debt now will have to be somewhere, somehow repaid or it will slow down economic growth,” Faber said. “I think we lived beyond our means from 1980 to 2007, and now it’s payback period.”
Faber told CNBC that central bank stimulus was useless and the implosion of markets was the only way to restructure the financial system.
“I think the whole global financial system will have to be reset and it won’t be reset by central bankers but by imploding markets — either the currency [markets, debt market or stock markets,” he said. “It will happen — it will happen one day and then we’ll be lucky if we still have 50 percent of the asset values that we have today.”
