"The U.S. has run a deficit for [so long]," he said Tuesday on CNBC's "Futures Now." "The conditions today are more fragile than they were ever before, and unless somebody comes and introduces minus 5 percent interest rates, I think the economy is really not in such a great shape."
"I'm actually amazed that people are so optimistic," the editor and publisher of the "Gloom, Boom & Doom Report" added.
Faber had previously appeared on CNBC calling for a giant correction of as much as 40 percent in the market. His bold calls have led various analysts and traders to question his market predictions.
Nevertheless, Faber does see ways for investors to play global markets despite his view that the U.S. economic outlook is poor. In addition to emerging markets, India in particular, Faber says that Europe is a good investment.
"I would rather build up cash positions and eventually invest in the euro," said Faber. "I think the euro is attractive and fairly priced. I think European stocks are also relatively attractive."
Regarding individual sectors, Faber encourages investors to look at interest rate sensitive stocks and infrastructure plays. REITs will also "do relatively well," he added, as well as consumer staples stocks, which have rallied almost 8 percent year to date.
And while technology stocks have been the best-performing group under the Trump presidency, Faber actually warns that "tech is very uncertain," and investors should be cautious when looking at the sector.