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‘Doctor Doom’ predicts worst crisis in half-century

Red-hot inflation will lead to a global financial crash, famed economist Nouriel Roubini warns

Global financial markets should brace for a period of decline that echoes the crashes of the 1970s and 2008, according to renowned economist and New York University professor Nouriel Roubini.

He told Bloomberg on Thursday that central banks will eventually give up on their monetary policy tightening before inflation is ever defeated. “It’s going to get ugly, the recession, and you’ll have a financial crisis,” Roubini warned.

He pointed to stocks that are down more than 20% this year, to strains in private equity, to a cooling in US real estate, and to a slumping credit market, where companies took advantage of years of low interest rates to pile on debt.


“Inflation is not going to fall fast enough because you have the negative supply shock,” he explained, adding: “Remember, when you have negative supply shock, you get a recession and high inflation. We’re not going to get a fall in inflation that’s rapid enough to go to 2%.”

According to Roubini, the result of all this will be a period that combines the worst of the 1970s and the Global Financial Crisis. “This is just the beginning of that pain. Wait until it’s real pain. And then you have a major financial institution that may crack globally, not in the US maybe now, but certainly internationally,” he said.

READ MORE: US recession forecast hits 100% – Bloomberg

“There are a couple of firms that are huge and systemic. They can go under. You might have another Lehman effect, then the Fed will have to wimp out. You’ll have a severe recession and you’ll have a financial market shock. They’re going to wimp out for sure,” the economist warned.


Roubini came to prominence for predicting the financial crisis of 2008-09 and was dubbed ‘Doctor Doom’ by Wall Street.

For more stories on economy & finance visit RT’s business section

https://ift.tt/uGowb2q 21, 2022 at 07:32PM
from RT – Daily news


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