U.S. Economy "Rolling Over," China at Risk of "Greek-like" Debt Crisis, Nenner Says

And that's the good news!

"I hope it's going to stay a recession," Nenner continues. "Any major problems will really get us into depression. I'm still very negative on the outcome of this big economic crisis."

How negative?

The economy will suffer a Japanese-like stagnation for the remainder of the decade and "there's nothing [governments] can do to stop it," Nenner says. "There has to be deflation in this period, whatever they do deflation is coming anyway."

Deflation now...followed by a serious bout of inflation, that is.

Nenner believes a Greek-like debt crisis "could also happen" in the U.S., but is currently more concerned about such an event occurring in China. "The problem is they gave out a lot of loans to farmer who are simply not into the way of thinking that they have to pay it back," he says.

The most recent data on GDP, industrial production, real estate and other metrics show China's economy has cooled, just as its central planners intended. But a debt crisis in China is simply not on the radar of most market watchers or economists. Most experts believe China's roughly $2.5 trillion of foreign currency reserves should cushion any blow from debt defaults or a slowing economy or even the air coming out of the real estate bubble.

But Nenner disagrees: "If the population really continues to have the policy of not paying back the loans [China] gets in trouble," he says.

As Seeking Alpha contributor Cliff Wachtel points out, Nenner is "not infallible" (who among us is?) but "his accuracy...has been sufficiently impressive to keep clients coming back for more."

And all this negativity about the U.S. (and global) economy is a big reason why Nenner thinks the Dow will fall as low as 5000 in the coming years before bottoming.

Editor's note: For a more optimistic view on the U.S. economy, see: Liz Ann Sonders: 9 Reasons Why the U.S. Economy Won't Suffer a 'Double Dip' 

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