Marc Faber: Greece Could Spark an Economic Collapse in 2015

Economic CollapseWhile mainstream analysts dismiss the risks associated with a debt default, Marc Faber is warning that such a catastrophe could spark the next stock market crash and possibly an economic collapse in 2015.

During an interview on Monday, July 7th with Bloomberg, the publisher of the Gloom, Boom & Doom Report discussed the Greek crisis and the Chinese economy, as well as the possibility of the delay in interest rate hike. (Source: , June 7, 2015.)

According to Faber, the Greek government and its creditors should compromise.

His comments came in after the Greek people rejected a bailout package offered by creditors on a historical referendum on Sunday.

On the possibility of Greece exiting the eurozone, he said, “Everybody knows that Greece is not able to pay its debt at the current size, what would happen is that whether Greece will leave the EU [European Union], it will suffer very badly.”

The global market suffered significantly over the failure talks between Greece and its debt creditors. Faber doesn’t think that the recent selloff in the global equity markets was the sole reason of the Greece crisis. He believes that the overall global economy is slowing down.

Meanwhile, when he was asked about the likelihood of the Greece contingency, he foresees the likelihood of the contagion to be very high as he warns investors, citing, “Wake up people of world, Greece will come to your neighborhood very soon, maybe not this year but next year.”

While everybody remains uncertain as to what is next for Greece, Faber suggests, “I think for Greece, exiting the EU is the best option, because if they default on everything, basically they’ll be debt free, the pain in short term will be so substantial.”

In regards to the latest crash in the Chinese stock market, he thinks “the market would fall by 40% and we won’t see a new high for long time.”

He also suggests that the industrial sector is slowing down; eventually causing the Chinese economy to slow down.

In regards to the possible interest rate hike by the Federal Reserve this year, he concluded by saying that the policymakers in the Fed would use any excuses to delay the rate hike.