Dr Doom warns of tough times ahead
NOTED international contrarian Marc Faber has turned his gaze of doom on Australia, warning of tough times ahead for the nation as China slows faster than expected and the domestic "housing bubble" bursts.
In an exclusive interview with The Australian, Dr Faber -- the editor and publisher of the The Gloom, Boom & Doom Report -- warned that a downturn in commodity prices as China slowed would have damaging consequences for the mining industry and economy of Australia.
The proposed mining developments in Australia that were not postponed could struggle to be profitable as metals prices eased, Dr Faber warned.
"The problem with Australia is not only exports to China and the weakening prices for industrial commodities, it is also a lot of household debt and a housing market that is essentially very expensive," Dr Faber said.
Weakness creeping into the resources industry could affect demand for property, deflating real estate prices.
"Frequently a bubble pops without a catalyst, it just pops because the demand weakens, and the demand weakens when assets are overpriced because of affordability reasons," he said. "I think in some regions of Australia there is plenty of supply and diminished demand. I think that this alone will lead to lower (housing) prices."...MORE