Faber: West Needs to Prepare for "Colossal Mess"

The fiscal grand canyon seems to be growing even deeper as political systems in the West continue to allow the debt burden to escalate to catastrophic levels.

As long as the government sector in democratic societies continue to overspend, we're going to keep undergoing recessions, depressions, and failing markets. Nearly all Western nations are part of the guilty party here and the outlook doesn't look good.

Monday, Marc Faber told CNBC's “Squawk Box” that the Western world is continuing to “rack up huge deficits” that will eventually cause our financial and political systems to break down.

Regarding financial conservatism Faber believes no new policy will save us from the looming canyon. He said, "no government complies with anything."

Faber believes the only way to truly change things is through reform and revolution. According to Faber, both the U.S. and Europe are getting closer and closer to such a revolution, as demonstrated by Occupy Protesters and austerity riots alike.

Unfortunately, the momentum is dying and the chances of achieving a real revolution are diminishing as well. If that is the case, Faber says the Western world will be unable to avoid a “colossal mess” within five to ten years' time.

As far as America is concerned, Faber thinks our deficit will stay above a trillion dollars per year year for quite some time, regardless of who resides as President.

Instead of finding a better executive-in-chief, Western nations should focus their energy on making bureaucracies smaller and reducing government by at least 50 percent. According to Faber this would provide an immediate improvement in the economy. 

Looking forward, Faber isn't optimistc on the West; he has his eyes on Asia instead: markets like the Phillippines, Indonesia, Malaysia, and Singapore are up dramatically. Thailand alone is up 250 percent from its 2009 low. Investors could also expect a rebound for China and Japan...

For more on what kinds of system reforms would help keep us away from the fiscal grand canyon, watch whole interview below:

Add a Comment (Pro Members Only)

More like this...