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‘Doctor Doom’ predicts the worst crisis in half a century

Rampant inflation will lead to a global financial crash, warns renowned economist Nouriel Roubini

Global financial markets should brace for a period of decline that will be more severe than the crashes of the 1970s and 2008, according to renowned economist and New York University professor Nouriel Roubini.

He told Bloomberg on Thursday that central banks will eventually abandon monetary policy tightening before inflation is ever defeated. “It’s going to get ugly, the recession, and you’ll have a financial crisis”, Roubini warned.

He pointed to stocks that are down more than 20% this year, pressures on private equity, the cooling of US real estate and the collapse of the credit market, where companies have benefited from years of rates. low interest to get into debt.

“Inflation is not going to come down fast enough because you have the negative supply shock,” he explained, adding: “Remember, when you have a negative supply shock, you get a recession and high inflation. We’re not going to get inflation down fast enough to hit 2%.”

According to Roubini, the result of all this will be a period that combines the worst of the 1970s and the global financial crisis. “That’s just the beginning of this pain. Wait till it’s a real pain. And then you have a big financial institution that can crack globally, not in the US maybe right now, but definitely in the international scale, he said.

READ MORE: US recession forecast hits 100% – Bloomberg

“There are a few companies that are huge and systemic. They can sink. You might have another Lehman effect, so the Fed will have to chicken out. You will have a severe recession and you will have a shock in the financial markets. They will collapse for sure. warns the economist.

Roubini gained fame for predicting the 2008-09 financial crisis and was dubbed “Doctor Doom” by Wall Street.

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