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Marc Faber continues:


“The European situation is basically hopeless, but it will lead to money printing.  In China, if the economy slows down meaningfully or if there is a crash, it will have a huge impact on the demand from China for raw materials, for commodities.  It will impact Australia, Africa, the Middle-East and Latin America.


If these countries are faced with declining commodity prices, especially industrial commodities such as copper, nickel, oil and so forth, then they will buy less from China and we will have a vicious spiral on the downside.


I’m sure the economy (of China) is softer than official statistics would suggest and probably the government will start to print money at some point.  So maybe stocks will rebound here because of money printing, but again, it won’t help the economy....


Continue reading the Marc Faber interview below...




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When asked about a sputter or collapse in the Chinese economy, Faber stated, “I live in Asia and all I can say is I observe a meaningful slowdown in business activity recently and increasing corporate earnings that disappoint.”


When asked if he was aware of capital flight out of China, Faber replied, “There’s a huge capital flight, there’s no question about this.”


When asked why the Chinese are panicking to move their money out of China, Faber responded, “That is a very good question because, you see, the bullish analysts will tell you will tell you, ‘Oh, if the Chinese economy slows down they are going to print money and lower interest rates and ease monetary conditions.’ 


But if that happens, then obviously capital flight will increase, especially if, unlike all of the expectations, the Yuan or the Chinese RMB begins to weaken rather than to strengthen against the US dollar.  So that could actually accelerate the decline or let’s say capital outflows and declining asset values in China.


Faber had this to say about the situation in the West, “Well, as you know we have some deflationists, they think the whole debt bubble will collapse and I believe that will eventually be the case.  But between now and then there will be QE3, 4, 5, 6 and so forth and in Europe they will print money.”


This is a powerful interview with one of the greats.  The KWN interview will Marc Faber is available now and you can listen to it by CLICKING HERE.


© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.


Eric King

KingWorldNews.com

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