Recent moves by the U.S. Treasury will bring some confidence back into the market temporarily, says Marc Faber, Swiss fund manager and publisher of the Gloom Boom & Doom Report.
But the longer term looks much worse.
"The global economy is decelerating at an unprecedented pace. Governments in the Western world are trying to re-ignite credit growth, and I think they will fail," Faber told CNBC.
The United States produces very little, Faber points out. Asia is the producer for the United States, he says, and it is also a region that has very large capital spending.
"When there is a slowdown in the United States, it's basically a disaster for Asia, and reduced demand in Asia is an even greater disaster for the resource producers of the world," Faber says.
Faber thinks China's economy has been decelerating very rapidly, not growing at 9 percent as Chinese officials have stated.
"The Chinese learned one thing from the U.S. government: How to doctor economic statistics," Faber says.
"Growth in China, in my opinion, is 5 percent at best," he says.
U.S. capital markets, Faber notes, are relatively better off than the rest of the world.
"From 2001 to 2007, the U.S. stock market underperformed, but for the last nine months it has outperformed emerging markets," he says.
Zhang Fan, an economist for Tebon Securities in Shanghai, told the U.K. Business Times that China will in fact slow.
"Economic growth will continue to trend down," Fan said.
"It's very obvious now that economic growth is slowing quickly, although some indicators, such as exports, are holding up due to lagging effects."
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