The economy is heading towards a “Bermuda Triangle” of risk, and markets must prepare for a crisis that could be comparable to that of 2008 , according to economist Nouriel Roubini, better known as ‘Dr Doom’. In one of his latest interviews, on the McKinsey Global Institute’s Forward Thinking podcast , the famous economist has warned of the risk that. The economy runs of suffering another financial crisis , because central banks continue to tighten their monetary policy . The Federal Reserve raised interest rates another 25 basis points this week. The European Central Bank has done so with another 50 points. With this, the economic cycle is becoming one of the toughest in history , which could subject the economy to 3 different types of stress, according to Roubini. First, high interest rates could easily tip the economy into a recession , reducing household and business incomes.
If you are a household or a company
But secondly, high interest rates mean that companies face higher borrowing costs and declining liquidity, which weighs on asset prices. Finally, the mountain of debt, both private and public , that has been accumulating during the years of low rates. Roubini points to the “zombies” in bankruptcy: households, companies and governments. Google has another AI ‘woke’ problem with Gemini… and it’s going to be difficult to solve “It’s like a Bermuda Romania Mobile Number Database Triangle. You take a hit on your income, on the value of your assets. And then on the burden of financing your liabilities . with a high level of leverage, you end up in a situation of anguish. And when many have these problems, then a systemic household debt crisis occurs like that of [2008] ,” he warns. This expert, one of those who predicted.
He and other top economists have criticized
The scenario he foresees combines the worst aspects of the stagflation of the 1970s with something similar. To the 2008 crisis, with a severe recession , persistent inflation and increasing levels of debt that hamper economic growth. the Federal Reserve’s aggressive rate-hiking regime over the past year, and some experts have called on central bankers to Bulgaria phone number list stop raising interest rates altogether for fear of “breaking” the financial system. There are increasing signs of tension , the most recent being the bankruptcy of Silicon Valley Bank . But a pause in interest rates could sow panic among investors and trigger. A resurgence in inflation , meaning central banks are powerless. Whatever they do with rates, as Roubini had previously acknowledged.
