http://business.financialpost.com/2011/08/12/roubini-says-more-than-50-chance-of-global-recession/
Marx was right; capitalism can destroy itself: Roubini Pam Heaven Aug 12, 2011 – 9:04 AM ET | Last Updated: Aug 12, 2011 1:39 PM ET Nouriel Roubini cited an even more controversial economist than himself this week when explaining the state of the world’s turbulent economy. “Karl Marx got it right, at some point capitalism can destroy itself,” said Mr. Roubini, in an interview with the Wall Street Journal. “We thought markets worked. They’re not working.” Mr. Roubini also said there is more than a 50% chance the world will plunge into another global recession and the next two to three months will reveal the economy’s direction. “We are at stall speed right now, and we do not know if we are going to go up, or down,” he said. Known as Dr. Doom for his prediction of the 2008 financial crisis among other dire forecasts, the economist said more monetary policy is needed from central banks to avoid another meltdown. “There could be QE3, QE4, QE5 in the long-haul,” in the United States, he said. But monetary policy alone will not be enough, and business and governments are not helping. Developed economies such as the United States and countries in the eurozone are implementing austerity programs to try to fix their debt-ridden economies, when they should be introducing more monetary stimulus, he said. And by slashing labour costs and sitting on capital, U.S. businesses have created a “catch-22.” “Because you cannot keep shifting income from labour to capital without not having excess capacity and lack of aggregate demand. And that’s what’s happening,” the economist said. In the wide-ranging interview, Mr. Roubini said it is possible that Italy or Spain could choose to leave the eurozone within five years. He also didn’t disagree with the premise of Standard & Poor’s controversial downgrade that the United States was on a unsustainable fiscal path, made worse by Washington’s gridlock. Roubini says he’s putting his money in cash, with U.S. Treasurys a smart bet. “Now is not the time for risky assets,” he said. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
