Tags: Faber | Economic | Crash | China

Faber: Economic Crash Looms in China

Friday, 02 Dec 2011 08:09 AM

Economist and Gloom, Boom and Doom editor Marc Faber says the possibility of a China crash concerns him more than Europe's financial problems.

“The European situation is basically hopeless, but it will lead to money printing," Faber told King World News.

"In China, if the economy slows down meaningfully or if there is a crash, it will have a huge impact on the demand from China for raw materials, for commodities. It will impact Australia, Africa, the Middle-East and Latin America," he said.
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“I live in Asia and all I can say is I observe a meaningful slowdown in business activity recently and increasing corporate earnings that disappoint," he told King World News.

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Marc Faber
(Newsmax file photo)
Faber says he feel sure that China's economy is softer than official statistics would suggest and expects the government will start to print money at some point.

He also notes that there's a huge capital flight from China now.

"Bullish analysts will tell you will tell you, ‘Oh, if the Chinese economy slows down they are going to print money and lower interest rates and ease monetary conditions,’" says Faber.

"But if that happens, then obviously capital flight will increase, especially if, unlike all of the expectations, the yuan or the Chinese RMB begins to weaken rather than to strengthen against the U.S. dollar."

"So that could actually accelerate the decline or let’s say capital outflows and declining asset values in China."

CNBC reports that China's factory sector shrank in November for the first time in nearly three years, according to an official purchasing managers' index, underlining the central bank's move to cut bank reserve requirements to shore up the economy.

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Economist and Gloom, Boom and Doom editor Marc Faber says the possibility of a China crash concerns him more than Europe's financial problems. The European situation is basically hopeless, but it will lead to money printing, Faber told King World News. In China, if the...
Faber,Economic,Crash,China
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2011-09-02
Friday, 02 Dec 2011 08:09 AM
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