Dr Doom warns of "perfect storm"
A “perfect storm” of economic factors is taking place at the moment, according to leading economist Nouriel Roubini.
Earlier this year, the Roubini Global Economics founder told the Skybridge Alternative Conference that he expects four elements to convene that will knock back the global recovery in 2013.
These factors are the US economy falling back into recession, the eurozone starting to break up, a slowdown in China and other emerging markets and increased risk of conflict in Iran, CNBC reported last week.
Talking on Twitter last week, Roubini said: “[The] 2013 perfect storm scenario I wrote on months ago is unfolding: EZ crisis, US stall speed, China hard landing, EM stall, MidEast time bomb.”
The economist, who earned the nickname ‘Dr Doom’ for his forecast of the financial crisis, added that the difference between the turmoil of 2008 and today is that “then we had all the policy bullets; now we running out of rabbits to pull out of the hat”.
Roubini’s comments followed data relaesed week which show Chinese inflation slowed to 2.2 per cent in June. This is down from 3 per cent in May and under the 4 per cent target.
Furthermore, the latest US employment situation report revealed that jobs growth remains below the rate considered necessary for a sustainable recovery.
Roubini also suggests policy easing by the Bank of England, European Central Bank and People’s Bank of China will have little lasting effect on the world’s stockmarkets.
“Levitational force of policy easing can only temporarily lift asset prices as gravitational forces of weaker fundamentals dominate over time,” he told his 178,953 Twitter followers.
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