This is one of the "the economy is going to melt down" folks you "Doom and Gloom" types out there are constantly quoting. Seems he's rethinking his predictions a bit. While he's still concerned about eventual inflation and the possiblity of a double-dip recession, he's not talking about any that silly "America will become like Zimbabwe" nonsense he's used in the past (and that many clueless folks here parotted).
"
Nouriel Roubini, the New York University economist who accurately forecast the bursting of the housing bubble and the resulting economic contraction, has become famous for his pessimism—he has been the gloomiest of the doomsayers. Which is what makes his current outlook surprising: Roubini believes that the Obama administration’s policy makers—and especially the much-maligned Tim Geithner—have gotten a lot right. Pitfalls may still abound, but he is now projecting an end to the recession, and he sees growth ahead."
RGE - Dr. Doom Has Some Good News
Rather long but interesing video interview:
Bloomberg News
Likewise, the other prominant "Dr Doom" type (Marc Faber) also seems to be backing off a bit from his worst case scenarios - or at least sounding a lot less certain about when it will happen or how high inflation will go - first predicting Zimbabwe style hyperinflation but now saying inflation could hit 10%-20% in 5 to 10 years (possibly leading to hyperinflation eventually). Still a doom and gloom guy, but now not nearly so ardent, nor predicting it nearly so soon.
Q. You've warned that US risks Zimbabwe-style hyperinflation and then more recently said US inflation could reach 10% to 20% in five to ten years. Isn't there a big gap between those outcomes?
A. We have the worst recession since the Second World War and actually the prices of necessities are still rising, including food and energy. So, one day within the next ten years, when the economy slowly recovers and when further dollar weakness occurs, inflationary pressures will increase. And once you have inflation increasing, it's not easy to stop it unless you implement tight monetary conditions, which would imply very high real interest rates. And I don't think that Mr. Bernanke or the US government have any intention whatsoever of having positive real interest rates. Combine easy monetary policies with large fiscal deficits, and the likelihood of much higher inflation is there. Once we go to 10% inflation, 20% becomes quite likely and once we go to 20%, we can easily go into hyperinflation.
Marc Faber Blog: June 2009
Ken
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