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They Will Print Money Like the United States: Dr. Doom Warns China's Economy Is Worse Than We Think

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"...this is kind of a perverse way to get excited."

Pentagon warned Congress that China's military is investing more in weapons systems and technology putting the U.S. at risk of falling behind the Chinese.
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Investment analyst, entrepreneur, and author of “The Gloom Boom & Doom Report” Marc Faber warned Friday that China’s deteriorating economic situation is not only worse than we think it is, but that it'll soon force the country's government to print more money.

(Related: ‘Dr. Doom’ Predicts: Investors Headed Towards ‘Massive Wealth Destruction’)

“What is your warning and what do we do about it?” asked the CNBC hostess.

“Well, I think first of all, investors must realize that the impact of a slowdown in the Chinese economy, which in my view is much larger than what the government has been reporting,” Faber responded.

“The [Chinese] government says GDP [Gross Domestic Product] has been growing at 7.8 percent. In my view, it's much lower because we have very reliable statistics, say, export figures from Taiwan, export figures from South Korea. Where the largest export destination is China, they're down year on year. Electricity consumption in China is hardly growing and so I think the economy in China is rather weak,” he added.

But why did stocks rally last Friday when these less-than-stellar reports on China’s economy were released?

“[T]he markets have rallied because they think that because of weak economic growth in China, they will stimulate, they will print money like in the United States and Europe and -- it will boost prices for a while,” Faber explained.

Simply put, as one CNBC host said, investors took an almost “perverse” joy in China's economic data because it boosted their hopes that the country's government would print more money -- just like the U.S. and Europe.

Watch Faber explain his prediction [via CNBC]:

“I agree this is kind of a perverse way to get excited,” said Tim Seymour of EmergingMoney.com, “is that weaker markets bring stimulus which is artificial and it's been proven to have less of a lasting effect.”

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