Predicts 20% drop or more.

NEW YORK (PNN) - August 13, 2013 - He made the crash call ahead of the 2008 crash, and predicted the market turn-around in 2009  to the exact day on which it happened.

Now Dr. Marc Faber of the Gloom, Boom and Doom Report is again warning of an imminent stock market meltdown.

Based on analysis of current stock market prices and the overall value of stock market indexes like the S&P 500 and the Dow Jones, Faber warns that while we are seeing near all-time highs, the valuations are nothing but conjecture.

Looking at the makeup of the major indexes, it’s clear that their high values have become dependent on a small number of companies. However, a peak into what’s happening behind the scenes shows that scores of other companies are being crushed because of weak earnings and a poor forwarding looking economic outlook.

This, according to Dr. Doom, is remarkably similar to what we saw in the days and weeks leading up to the 1987 crash.

It’s a recipe for disaster.

[In 1987] we had a very powerful rally, but also earnings were no longer rising substantially and the market became very overbought and the final rally into August 25 occurred with a diminishing number of stock hitting 52 week highs. In other words, the new high list was contracting and we had several breaks in different stocks.

We’re now close to the all-time highs at 1,709 on the S&P [500] and yesterday and the day before there were 170 new 52-week lows.

That’s a very high figure.

By the end of this year I see the market closing lower than today; maybe 20% or more.

For those invested in stock markets, it may be time to take a short break. Based on recent earnings, current economic sentiment, and continued degradation in national employment figures, there is a serious disconnect between what Wall Street wants you to think and what’s actually happening on Main Street.

This may not be the “collapse” for which the Fascist Police States of Amerika government has been preparing, but a stock market downturn of this magnitude could well wreak havoc all over the world, and for all we know could be the trigger  for widespread calamity.

Just as we saw in 2008, when the selling starts the panic follows. This means that investors will sell everything in sight first and ask questions later. The effect, should markets slide, will be a price drop in just about every asset linked to paper trading markets, including gold, silver, commodities, tech, and retail. Even ammunition and firearms companies, which have seen huge demand in recent years, will likely take a hit.

Nothing will be spared when the herd goes into panic mode.