In May 2020, Chief Economist Nouriel Roubini said in a podcast with Odd Lots that the economic catch-up would end with a period of high inflation as a result of surprises in the value chain and strong monetary support from the authorities.
It has become a reality.
Now Roubini – who is also called Dr. Dom – hosts the podcast once again and predicts a bleak outlook for the global economy.
The pain caused by raising interest rates would be too much for central banks. According to the report, they will have to abandon monetary policy long before they can beat inflation Bloomberg.
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He points out that stock markets are down more than 20 percent from their peak, that the US housing market is slowing and the credit market is declining.
– This is only the beginning of the pain. Just wait until you feel real pain, says Roubini.
He believes that a major financial institution will collapse globally. Not necessarily in the US, but internationally.
We can have a new effect on Lehman and then the Fed give up. Then there is a serious recession and the financial market is in shock. They will definitely have to give up.
A combination of the worst
According to Roubini, the result will be a period that combines the worst of the 1970s and the global financial crisis of 2008.
It points to the “usual” causes such as the war in Ukraine, the epidemic, and turmoil in the Chinese economy, but also larger aspects such as the decline of globalization, Friends support That the United States will work to be less dependent on other countries — an aging population, restrictions on immigration, cyberwarfare, populist politics, strong unions, new pandemics, climate change.
Having a financial crisis
Dr. Doom turns his attention to Britain and believes that the events that took place there may extend to other parts of the world.
I don’t believe in central banks that say they want to fight inflation at any cost. They are irrational and believe that there is either a soft or hard landing, two quarters of negative growth and then a return to growth. This will not happen. It will be a dirty new financial crisis.
Roubini thinks it could be worse than it was in the 1970s because many developing countries have high debt. Neither the authorities nor corporations will be able to repay the debt when interest rates rise.
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