Nouriel Roubini: ‘For Now, I Don’t See The Crash Approaching’

While not an “official” Crash Prophet, I’ve still made it a point to follow Nouriel Roubini (former Clinton administration Treasury official, NYU economics professor, and Roubini Global Economics chairman) through the years primarily because of his early and correct prediction of the 2008 global financial crisis. Back in February 2012, I blogged about a 2005 New York Times interview in which “Dr. Doom”- as the financial media likes to call him- warned that the U.S. housing market was in a bubble that would pop and bring about a global economic recession (or even depression).

Fast forward to November 2017. Business Insider Poland’s Damian Szymański recently had the opportunity to interview Dr. Roubini and ask him about a coming economic crisis. From their exchange:

BUSINESS INSIDER: If you succeeded to forecast the biggest crash in the global economy since the Great Depression of the 1920s, I have to ask you this particular question: does the world faces the similar fate right now? Do you notice any symptoms of the upcoming crisis?
ROUBINI: I don’t see similar threats for next one-and-a-half to two years. But in a long-term, there will be some kind of crisis, that’s certain. But whether it’s going to be in the US, China or Japan, we don’t know. Will its reach be global or local? We don’t know it either. But one has to remember that a crisis is not something unpredictable, like an earthquake. All crises build up- gradually, step by step. We keep climbing, higher and higher until we reach the final point. And that- Bam! We have a crash.
BUSINESS INSDIER: So, right now, are we in the middle of this road toward the peak? Or do we just start climbing?
ROUBINI: There are certain spots in the US over-leveraged enterprise sector that can cause trouble. The non-bank financial sector or rising government debt is also worrying, but for now, I don’t see the crash approaching. But the situation needs careful monitoring. The debt has to be spent on investment, not consumption- this is the only way to avoid another financial crisis.

(Editor’s note: Bold added for emphasis)

An insightful interview, which can be read in its entirety on the Business Insider website here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

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Wednesday, November 29th, 2017 Asia, Crash Prophets, Debt Crisis, Government, Investing

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