A bull market left to run without a correction for this long sets up stocks for huge declines, "Dr. Doom" Marc Faber told CNBC on Thursday.
How huge? The editor and publisher of The Gloom, Boom and Doom Report said U.S. stocks could drop 30 to 40 percent, if left without a significant pullback.
"These types of bull markets without a correction usually lead to more than just a correction," Faber said on "Squawk on the Street."
(Read more: Tune out noise and enjoy bull market: JPM's Lee)
That means investors should get out of U.S. stocks and look for the financial assets that lose the least amount of money, he said. Cash and U.S. Treasurys remain the safest bets, Faber said, except in the very unlikely event of the U.S. dollar imploding.
"Just in the last six months there has been euphoria for U.S. equities," Faber said. "My view is that it's not a good time to buy U.S. equities. ... It's a better time to get out of stocks than into stocks."
Faber's comments came after former GE CEO Jack Welch told CNBC earlier Thursday that investors looking for good returns have little to no options outside U.S. equities.
(Read more: Stock investors 'trapped': Jack Welch)
Welch attributed the bull market to the Federal Reserve's still-accommodative bond-buying program, which stands at $65 billion a month even after two months of $10 billion reductions.
Earlier Thursday on CNBC's "Asia Squawk Box," Faber turned his pessimistic sights toward the Chinese economy, which investors fear has been slowing in recent months. Faber said China's economy is only growing at just over half the rate that authorities are reporting, but he said this was not something for investors to fret over.
"I think we are already at a 4 percent growth rate anyway. The figures that China publishes are figures they just take out of a drawer to make it look good," Faber said.
Although Faber said China's growth is much lower than reported, he noted that a 4 percent growth rate was not to be sniffed at.
(Read more: 'Probably too late' to buy US stocks: Marc Faber)
"I think 4 percent growth in a world that is has no growth is actually very good," he said.
"It's like a hedge fund manager, he told me last year he makes 4 percent. So I say this performance [is] not particularly good, and he said yes, compared to zero percent interest rates, that is a fantastic return."
Faber also pointed out that it would be much healthier for China to growth at a slower rate with reduced credit risk.
"I'm not saying that 4 percent is as good as 8 percent, but it would be better to grown at 4 percent without a credit bubble than at 8 percent with a colossal credit bubble that will lead down the road to even larger problems," he said.
(Read more: We're in a worse position than in 2008: Marc Faber)
"And I think we have to realize excessive credit growth eventually leads to a crisis; this always happens. And in the case of China we do not have a credit bubble, we have a gigantic credit bubble," he added.
The Chinese government has forecast that its economy will grow 7.5 percent this year. The most recent quarterly figures showed China grew 7.7 percent on year in the final quarter of 2013.
Faber asked investors to look at the recent slump in the Chinese stock market and commodity prices to truly evaluate the state of the country's economy.
Shanghai and London copper futures fell to multiyear lows this week, while the Shanghai Composite is down 5.1 percent this year.
"I would like your viewers to consider: Why is the China stock market doing so badly if everything is so great? Why is the price of iron ore collapsing and copper prices going down if everything is so great?" he asked.
"If you look at the import figures of the trading partners of China, they are all actually showing that exports of China are hardly growing," he added.
(Read more: Is China's bond default the tip of the iceberg?)
On Friday China's first corporate debt default in at least 17 years sparked fear that the country's "Lehman moment" is fast approaching.
Many commentators have said the default is not as worrisome as it appears because Chinese authorities have the firepower to step in and bail out firms at risk of defaulting on loans.
(Read more: China's Colossal Credit Bubble Next Big Risk: Faber)
But Faber said governments always try to give the perception that they are in control.
"If someone comes to me and says China has always managed to avoid … any credit problems [because it] has never defaulted, [that] doesn't mean it won't happen in future. The same was said about Japan. The Japanese also thought that way until 1989 and they lost control of it," he said.
However, Faber said, we shouldn't worry about a crash in China because the U.S. Federal Reserve could always shore up losses by printing more money.
"For the world, economic growth in China is very crucial. But not to worry, because the worse the global economy performs, the more geopolitical tensions we have, the more money printing we will have from the Federal Reserve. As it gives the clowns at the Fed another excuse to postpone the tapering," he added.