The world economy has slowly come out of the global financial crisis, but the current sputtering economy is good news compared to what is around the corner, says “Dr. Doom.” economist Nouriel Roubini.
An insistent "doom and gloomer," Dr. Roubini still determines there will be a global “perfect storm” next year because of slowing economies, European debt and geopolitical risks, he said in an interview with Reuters.
The New York University professor accurately predicted the global economic crisis in 2008.
He now says that tax increases and spending cuts in the United States will help bring about the second recession in four years.
His recipe for disaster includes a hard landing for China’s economy, and for good measure he tosses in his expectation of a slowdown in emerging economies and – last but not least – war with Iran.
"Next year is the time when the can becomes too big to kick it down (the road)...then we have a global perfect storm," Roubini said.
Roubini is a native of Turkey and the son of Iranian Jews. He briefly lived in Israel before moving to Italy and later to the United States, where he became a senior advisor in the U.S. Treasury Department.
In 2005, he wrote in Fortune magazine that housing prices were spiraling out of control due to speculation and they eventually would sink the economy, which is exactly what happened in the autumn of 2008.
Roubini also forecast that economists' expectations of a quick and strong economic rebound in the United States were “too optimistic,” an observation that has proven to be correct.