Let’s visit with Nouriel Roubini! Intro to Nouriel’s article in Forbes, courtesy of Timothy D. Naegele. – Ilene
I agree with [Nouriel] about the countries that will be hit hardest (e.g., the U.S., the U.K., Ireland, Iceland, Spain, many emerging European economies, Australia and New Zealand). Nouriel fails to include Russia and some other countries that will be hit much harder than the U.S.; and if you read his article very carefully, he is essentially setting up a depression scenario. However, having been "burned" with the moniker, Dr. Doom, he seems to have chosen — for political reasons — not to go that far, but it undergirds his article. Also, he is talking about "years" before recovery takes place, which is consistent with my view of a decade (e.g., 2017-2019).
At best, he is saying that the U.S. will go through a decade like Japan, where the economy will be in the doldrums. I believe it will be far worse than that though; and my estimates do not take into account other factors that may produce even greater downward pressures (e.g., the reemergence of Swine Flu; wars beyond Iraq and Afghanistan).
Nonetheless, the article is important for what it says and what it does not say.
Ten Risks To Global Growth
By Nouriel Roubini, in Forbes
An analysis of medium-term economic prospects.
Last week, I discussed why the U.S. and global recovery will occur later than the optimistic consensus argues. This week, I will discuss why the recovery will be sub-par and below trends for a few years once it does occur, and why there is even the risk of a double-dip W-shaped recession.
The crucial issue facing us is not whether the global economy will bottom out in the third or fourth quarter of this year, or in the first quarter of next year. It’s whether the global growth recovery, once the bottom is reached, will be robust or weak over the medium term–say 2010-11. As I argued last week, one cannot rule out a sharp snapback of GDP for a couple of quarters, as the inventory cycle and the massive policy boost lead to a short-term growth revival. My analysis, however, suggests that there are many yellow weeds that may lead to a weak global growth recovery over 2010-11.
Continue here.
See also: Euphoria or the Obama Depression? By Timothy D. Naegele.
