The unchecked growth of debt in Western countries will lead to a “colossal mess” within the next five to 10 years, according to Marc Faber, author of the infamous “Gloom, Boom and Doom” report.
“I think the regimes will try to keep the system alive as it is for as long as possible, which means there’s no ‘fiscal cliff,’ there’s a fiscal grand canyon,” Faber (aka “Dr. Doom”) said during a Monday broadcast of CNBC’s “Squawk Box.”
Faber continued, arguing that the expansion of government in the West has made it possible for countries to load up on massive, never-ending deficits, which, according to him, will soon reach crisis levels.
“Eventually, you have either huge changes occurring in a peaceful fashion through reforms, or, usually, through revolutions,” he said, adding that both the U.S. and Europe are approaching revolution scenarios.
“I think the time frame would be within five to ten years you have a colossal mess … everywhere in the Western world,” Faber said. “I think the deficit here (in the U.S.) — irrespective of who is in the White House — will stay above a trillion dollars per annum for at least as far as the eye can see.”
[Faber’s comments on the “colossal mess” are at the 03:30 mark. However, the entire discussion is definitely worth a watch]:
The international investor went on, revealing what he thinks is the correct the solution: Reduce the size of government.
“My medicine for the U.S. is this: Reduce government by minimum 50 percent,” he said. “The impact would be immediately an improvement in the economy.”
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Front page photo courtesy the AP.