Apocalyptic predictions from wannabe super-villain economists with nicknames like Duchess of Doom, Dr. Doom—anything with doom, really—seem to appear on a weekly basis. While tempting to dismiss, their increasing frequency could signal a worrisome trend.
The latest, from the aforementioned Dr. Doom, whose clever man-on-the-street disguise of hat and glasses has him better known as Marc Faber, predicts chances of worldwide recession “at 100%.”
Faber, publisher of “The Gloom, Boom & Doom Report,” told CNBC’s “Closing Bell” on Thursday that “Europe is already in recession. [The exception] Germany is still growing very, very slightly, but is likely to go into recession soon.”
The eurozone economy shrank 0.2% in the second quarter, despite 0.3% growth in Germany and similarly slight growth in a few countries like the Netherlands.
“The U.S. economy has decelerated and I don’t see much growth in the next six to 12 months,” Faber said, before adding Europe, the United States, China and the emerging markets that are dependent on China for growth only see weakness.
Faber said there was little the Federal Reserve and other policymakers could do to turn the U.S. economy around. “I think that if you look at the injection of liquidity and the intervention by the Federal Reserve and the Treasury with fiscal measures, it has already impoverished the U.S. economy,” he said.
It would take “massive easing, a huge balance sheet expansion” to boost economic activity in the United States, Faber told the network.
Faber doesn’t expect much change in the finances of the United States, regardless of who wins the election in November.
“The deficit is $1.3 trillion and, in my view, will go up,” he cautioned.
Even corporate profits, the lone bright spot, look to be at risk, he told CNBC.
“The corporate sector has recovered remarkably since the trough in earnings in 2009, and we are at record-high earnings,” Faber said, but added, “Corporate profits will disappoint over the next 12 to 18 months.”