Nouriel Roubini, the economics professor at New York University who predicted the late 2000s economic crisis, says there’s a “perfect storm”of threats brewing that could slam the global economy as soon as 2013.
A slowdown in China. Trade disruption from Japan’s 2011 earthquake and tsunami. The debt crisis in Europe, and the emerging one in the U.S. Together, these threats have a one-third chance of damaging the global economy, Roubini said.
“There are already elements of fragility,” Roubini said during a media briefing in Singapore on Monday.
“Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest.”
Roubini makes a compelling argument for a “hard landing” in China, using its empty high-speed trains as a symbol of the country that’s grown too far, too fast. The bond market “revolt” he warns of in the United States seems possible if leaders fail to address the budget deficit.
But Roubini has been wrong before. A few times. Let’s hope the professor is just being his usual bearish self, because a “perfect storm” doesn’t sound all too pretty.