Economist Dubbed ‘Dr. Doom’ Says We’re Back in Great Financial Crisis Territory but This Time It’s Worse

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Economist Nouriel Roubini, who’s been dubbed “Dr. Doom” for his gloomy-yet-correct prediction of the 2008 market meltdown, told Bloomberg in a recent interview that the United States is back in Great Financial Crisis territory, except now there are even more problems and cause for worry.

Roubini, CEO of Roubini Macro Associates and author of “MegaThreats,” made the remarks in an Oct. 25 appearance on “Bloomberg Surveillance” program, where he was asked if we’re “there again” in reference to the 2008 financial crisis.

“Yes, we’re here again,” Roubini replied. “But in addition to the economic, monetary, and financial risks—and there are new ones—now we’re going towards stagflation like we’ve never seen since the 1970s.”

Stagflation, a combination of sluggish growth and high inflation, was a hallmark of the economic crisis of the 1970s, when oil prices were soaring and inflation was close to double its current level. Spiking crude prices, rising unemployment, and loose monetary policy pushed the consumer price index up to an annualized 14.6 percent in March 1980, prompting the Fed to raise interest rates to nearly 20 percent that year to cool price pressures.

Roubini said that, in addition to economic, monetary, and financial risks currently in play, the world faces higher geopolitical risks.

“We are on a confrontation with some revisionist powers like China, Russia, Iran, or [North] Korea that are challenging the geopolitical order of U.S. and the West. And that’s going to lead potentially to conflict,” he said.

He also spoke of a backlash against globalization, political turbulence, and “very severe” environmental risks.

“There are technological risks coming from AI, machine learning, robotics, automation, and the destruction of jobs,” he continued.

On top of that, Roubini said debt levels are higher than they’ve ever been, adding that all this represents a confluence of “mega trends” that he predicts will combine into a stagflationary storm that will engulf many of the world’s economies.

By Tom Ozimek

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