The global economic picture isn't bright, and central banks are largely to blame, says Marc Faber, publisher of the Gloom, Boom & Doom Report.

"The global economy is not strengthening. It is weakening," he told CNBC. "China is weakening. The U.S. economic statistics recently have been on the weak side."

China's economy grew 7 percent in the first quarter, its worst showing in 6 years, and the Atlanta Federal Reserve's forecasting model shows growth of only 0.1 percent for U.S. GDP last quarter.

The Fed made a mistake in cutting short-term interest rates to almost zero, Faber argued. "The monetary policies as conducted by the Fed have created a lot of unaffordability in the system."

And Faber feels the same way about the easing programs of other central banks. "There's a big bubble in debt, in financial assets. But the biggest bubble is the belief that central bankers know what to do. They have no clue. That is the biggest bubble," he noted.

So where should you invest?

"The market in the U.S., from valuation point of view and relative to other markets in the world, is completely unattractive. European stocks represent much better value," Faber stated. "And it's not true that Europe is slower than the U.S. In the U.S., you have a slow down. Europe you have an improvement in margins. So I think European equities will continue to outperform."

Meanwhile, former Fed Chairman Paul Volcker is concerned about the stability of the U.S. financial system. If you thought the Dodd-Frank financial reform act of 2010 eradicated the system's dangers, think again, he said.

"Even as the United States continues its long climb back from the financial crisis, it is all too clear that the federal financial regulatory structure is simply inadequate to head off future crises," he wrote in The Washington Post.

"The structure that failed us in anticipating and responding to the emergency is largely still in place."

Many commentators have noted that the biggest banks have only grown bigger since the 2008 financial crisis. The six largest U.S. banks have about two-thirds of the assets in the country's banking system.

"Important progress has been made, here and internationally, in shoring up banking regulations, notably through stronger capital requirements," Volcker explained.

"But, basically, the institutional structure for financial regulation — which traces its origins to the 1930s — has resisted repeated efforts for meaningful reform."

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