Tags: roubini | has | hope

Dr. Doom Sees A Ray Of Hope

By    |   Friday, 26 Jun 2009 10:14 AM

Economist Nouriel Roubini, nicknamed Dr. Doom for his pessimistic forecasts, turned optimistic for a moment.

“Things have sort of stabilized,” he told Bloomberg TV.

Then he hastened to add, “But not yet. If you take existing home sales, about half of them are distressed sales. … So they’re going slightly higher, but the line data are very weak.”

Governments can’t be faulted for lack of action, Roubini said.

“There has been massive fiscal stimulus, massive monetary stimulus, conventional and unconventional,’’ he said.

“We have backstopped the financial system. We have liquidity guarantees, insurance, recapitalization.”

So what’s the problem?

“What we have to start worrying about is that the medium-term path for fiscal policy in the U.S. is obviously unsustainable,” Roubini said.

“The CBO (Congressional Budget Office) expects a doubling of the debt-to-GDP ratio from 40 percent to 80 percent. And then eventually I think these large deficits will lead to expectations of further monetization of these deficits,” the gloomy economist said.

As a result, “In the short run, we have deflation,” Roubini said. “But over time, (there will be) expectations that inflation could go higher. So we have to worry about these fiscal deficits.”

Legendary investor Warren Buffett is worried about fiscal and monetary policies, too.

All the stimulus spending “poses the problem later on, not next month or next year, of very significant inflation,” Buffett told CNNMoney.com.

“It’s much tougher to drain the system of excess money than it is to flood it.”

© 2017 Newsmax. All rights reserved.

   
1Like our page
2Share
StreetTalk
Economist Nouriel Roubini, nicknamed Dr. Doom for his pessimistic forecasts, turned optimistic for a moment.“Things have sort of stabilized,” he told Bloomberg TV. Then he hastened to add, “But not yet. If you take existing home sales, about half of them are distressed...
roubini,has,hope
244
2009-14-26
Friday, 26 Jun 2009 10:14 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved