One of the world's most famous contrarian investors says he is worried that a new phase of the global financial crisis will be felt in Australia.

Marc Faber, author of the Gloom, Boom and Doom report, says the Chinese economy is a major source of uncertainty.

"Most economies will say, well, we'll have a soft landing, that's the worst," he told AM.

"But I've been working in the investment business for 40 years. All the time I've heard about soft landing and no recessions and no crashes and no panics and so forth.

"So who knows, maybe the Chinese economy will decelerate more rapidly than is generally expected and possibly even crash, in which case it would have a huge impact on economic activity around the world."

He says that impact will be felt in Australia.

"If there is a meaningful slowdown in China, then obviously the Australian economy will suffer very badly," he said.

"I happen to think that the Australian economy will suffer regardless because we have a very elevated property market that has become unaffordable for a large number of people and we have already some cracks in the property market.

"We have a very high household debt to GDP ratio so I'm not optimistic about the Australian economy."

Mr Faber says the American economy is another reason for concern.

"Right now the US stock market is outperforming other markets," he said.

"But I think that in the US, the fiscal deficit is a huge problem to which there are hardly any solutions, for the simple reason that the Democrats want to spend and the Republicans also want to spend. Nobody really wants to increase taxation.

"So the deficit will, in my opinion, continue to increase and will necessitate money printing, but it may not lift economic activity."

He says any increase in the quantity of money will drive symptoms of inflation.

"The central bank does not know where these symptoms will occur, so it creates one distortion in the market to the next distortion to the next bubble," he said.

"And so you have booms and busts and much higher economic and financial volatility."