Noted American economist Nouriel Roubini says the eurozone is in the midst of crumbling, and with the rest of the world’s future at stake with a potential collapse, they might want to listen up — Roubini has been right before.
Speaking privately at a get-together this week at his apartment, those in attendance have since leaked that Roubini, who manages the Roubini Global Economics firm, has low-expectations for resurgence in the eurozone. According to the economist, a collapse is imminent as the economy overseas gets more chaotic.
There is a “significant risk of a Eurozone breakup,” sources say Roubini told a handful of select party guests recently, reports the Business Insider. Adds the economist, if the Eurozone goes under, “everything around the world goes sour.”
Roubini has claimed that in the past he correctly predicted both the housing market crash and the worldwide recession, the aftermath of both is still evident in the crises across the globe. For his forecasting, Roubini has earned the title “Dr. Doom” from members of the media, who look to him for economic outlook and have been met with not-so-optimistic — and correct — assumptions from the analyst in the past. As the American economy continues to show slumping statistics and the unemployment rate stays at or above a stagnant 9 percent for months, a collapse across the pond could cause a catastrophe for the world economy.
Sources say Roubini announced, “If the Eurozone blows up, it all gets worse.”
Less than two weeks ago, Roubini had predicted that the odds of a eurozone collapse were one-in-two.
“Unfortunately, in my view there is a risk, at least a 50 percent probability, that in the U.S., in the eurozone, in the United Kingdom, and in most advanced economies, the future in the next 12 months might suggest a recession, a downturn, rather than reacceleration of growth,” Roubini said on October 24 to Bloomberg.
According to The Jakarta Post, that same day Roubini hypothesized dire conditions for the Chinese economy, noting that most of their gross domestic product is made through exports. Beijing and Washington have been at odds in recent weeks about a tariff that could raise the price of Chinese goods coming into the States and could cause economic woes for both nations.
This week, the Business Insider reports that Roubini remains pessimistic about the future of China and says a build-up of non-performing loans at the banks and a large governmental debt will cause major problem in 2013, if not sooner.
Professor Roubini was right…
Back in 2008, a cover on Newsweek magazine was titled “The Road to Recession.” This title signaled what some had known for some time – an unavoidable recession had already started. The economic news coming out of the annual World Economic Forum, which had just concluded in Davos, Switzerland, was not good.
While at the conference, Nouriel Roubini, an influential professor of economics and international business, was quoted in the Times, U.K. as saying that it was not whether there would be a soft landing or a hard landing in the US, but rather how hard would the landing be. Further, he contended that the recession was going to be deeper, would last at least four quarters and would be severe
“We know booms and busts are aspects of capitalism and have been so historically. Many of them have been driven by a technological innovation–whether it was the railroad or the Internet–and they may create bubbles, fraud and eventual losses. But they are also driven by real innovation,” he was quoted to say in the article.
“This latest crisis we see today differs from such historical examples in two important elements. First, with housing there was no technological revolution of any sort. We still build homes basically the same way we did 50 years ago. The innovation in this instance was financial…,” he concluded.
So, if financial innovation has led us into the latest bust phase of the business cycle, can another type of innovation lead us out? According to Klaus Schwab, founder of the World Economic Forum, “Collaborative innovation is needed to unlock the future as the world is facing a variety of challenges”.
This need for “collaborative innovation” is now becoming acutely obvious to many. Individually, we are at the mercy of the rest of the world. Together, we can achieve the necessary vision of a truly sustainable future that embodies a triple-bottom-line perspective.
Sustainable Land Development Initiative
The Essence of Sustainable Development