kent nickell
Well-known member
Interesting talk by Roubini to long term investment group. We are going to extreme lengths to supply liquidity to the economy to try and improve lending but it seems that some of this money is going into falsely propping up the stock market. Roubini mentions that it also seems to be pushing up the price of oil from a low of $30 to now over $70 which seems too high relative to the rate of any recovery. (Pushing excess money into commodity purchases) Also these large liquidity outflows increase defiicit problems. These deficit problems will push up interest rates.
So, interestingly, the liquidity flooding which is trying to salvage the economy is running into the walls of increasing oil prices and interest rates which will limit its effectiveness. Another example of bubble building rather than just letting the economy more naturally deflate....
This overall necessary deleveraging process will also though by its deflationary nature have a medium term effect which will limit growth for several years... (also not enough real deleveraging is going on and much of it is being 'socialized' and added to the public debt problem)
Expects unemployment to top 11% with continued pressure on real estate markets..
Still structural imbalances with spending countries such as US forced to spend less but saving countries such as China and Germany stll saving and producing causing oversupply problems.
Failure to deal with budget deficits also leads to limited ability to deal with long term problems such as health care, climate change, urban renewal, food and water security..
Opinions : Bloomberg Audio/Video Report, Jun 22, 2009
Nouriel Roubini Sees Economic `Double Whammy' From Oil, Deficits
Link: http://www.rgemonitor.com/redir.php?sid=2&tgid=166&cid=358752
http://uk.reuters.com/article/idUKLNE55L02Z20090622
So, interestingly, the liquidity flooding which is trying to salvage the economy is running into the walls of increasing oil prices and interest rates which will limit its effectiveness. Another example of bubble building rather than just letting the economy more naturally deflate....
This overall necessary deleveraging process will also though by its deflationary nature have a medium term effect which will limit growth for several years... (also not enough real deleveraging is going on and much of it is being 'socialized' and added to the public debt problem)
Expects unemployment to top 11% with continued pressure on real estate markets..
Still structural imbalances with spending countries such as US forced to spend less but saving countries such as China and Germany stll saving and producing causing oversupply problems.
Failure to deal with budget deficits also leads to limited ability to deal with long term problems such as health care, climate change, urban renewal, food and water security..
Opinions : Bloomberg Audio/Video Report, Jun 22, 2009
Nouriel Roubini Sees Economic `Double Whammy' From Oil, Deficits
Link: http://www.rgemonitor.com/redir.php?sid=2&tgid=166&cid=358752
http://uk.reuters.com/article/idUKLNE55L02Z20090622