“I think we could have a global recession either in Q4 or early 2013." When asked what were the odds, Faber replied, "100%."

However, in the near term Faber also sees potential for a market rally.



Faber said the bullish catalyst would be Greece exiting the EU.



“I think the market would be relieved if finally Greece exited the euro. There would be some clarity. Although it wouldn’t be good for banks and insurance (stocks) in general I think markets are oversold and with an exit – markets would rally.”

It’s worth noting that Faber is talking hypothetically; he does not think Greece exits the EU in the near future.



“What I think will happen is that Germany will show more flexibility and issue more euro bonds.”



Faber pointed to the recent decline in the euro as evidence that the currency markets share his view. “More bonds will challenge the quality of the euro. That’s why the euro has been very weak, lately."



For investors looking to navigate what could be a serious economic storm, Faber said the best thing to do is keep the portfolio in US dollars and own gold, “knowing that sentiment is negative and in the near-term it could trade down to the Dec 29 low of $1522.”





Posted by CNBC's Lee Brodie





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Trader disclosure: On May 25, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long GDX CALLS; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long PPE; Pete Najarian is long HPQ; Stephen Weiss is long JCP; Stephen Weiss is long COH; Stephen Weiss is long CMI; Stephen Weiss is long CHK; Stephen Weiss is short QCOM; Stephen Weiss is short UVP; Stephen Weiss is short EURO; Jon Najarian is long AH CALL SPREADS; Jon Najarian is long GLD CALL SPREADS; Jon Najarian is long ZNGA CALL SPREADS; Jon Najarian is long GLUU; Jon Najarian is long DDMG; Jon Najarian is long CIGX; Jon Najarian is long CBOE; Jon Najarian is long CME; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MO; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long XLU; Steve Grasso is long ZAZA

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