Dr Doom, Nouriel Roubini Interview
Dr. Doom, Nouriel Roubini Interview
Nouriel Roubini earned the nick name Dr. Doom after accurately predicting the 2008 financial crisis. He has served as an economist for the IMF, World Bank, and US Treasury. In this interview, Nouriel Roubini speaks about the possibility of a perfect economic storm. The elements of that financial storm include the upcoming US fiscal cliff, a break up of the Euro Zone, and a possible conflict with Iran which would send oil prices soaring.
We have spoken about the US fiscal cliff on Prepper Recon before, but here is a recap. The Bush tax cuts expire in January which will raise most everyone’s tax rate by 5%. This 5% would come straight out of consumer spending which makes up 70% of GDP. That would lower GDP by 3.5% by itself. This is a recession on top of an already anemic economic environment.
Part 2 of the cliff is in the automatic sequester,as Nouriel Roubini points out, this was the deal struck to make spending cuts across the board during our last debt ceiling debate. This will force government agencies, and government contractors to make job cuts, adding to our already high unemployment.
Part 3 of the cliff is another debt ceiling debate which caused us to loose our AAA credit rating. Another rating cut would all but insure bond yields to soar, creating an accelerator to our already out of control debt burden. It is the equivalent of being maxed out on all your credit cards and making the minimum payments by taking out new cards. Suddenly you miss a payment and all of your rates go up to the default rate, which in case you haven’t looked, is probably 25% higher than your current rate.
Even if we dodge all of this, the sequel is more scary than the other 3 parts put together. It is known affectionately as Obama Care. It is the single most financially devastating event in our history. In 2014, small businesses with 50 employees or more will have to provide health care for their workers. So if you are an employer with 60 employees, what is your solution? For most, it will be “lay off 11 people”. That will be the solution for thousands of small businesses around the country. You don’t need me to do the math for you to see this is economic Armageddon.
I am a Ron Paul fan myself, but the reality is we have to stop this time bomb from taking us out. We will not survive Obama Care, and if that means voting for someone you really don’t like, join the crowd. I think we can all agree that the flu is not pleasant, but it is a lot better than cancer. We can all wish that Ron Paul was a choice and we could be happy and healthy, but the sheeple have spoken and our choices are the flu or cancer. This election cycle, if you don’t choose one, someone will choose for you.
Combined with the other forces Nouriel Roubini has pointed out, this could be the beginning of a global financial collapse. Most people expect it to play out rather slowly, but you may be surprised how fast it can happen once confidence begins to erode.
Do what you can to pay down debt. Save as much money as possible and explore alternative income streams. The next few years could be rough.
Here is a link to Nouriel Roubini’s blog.
Happy Prepping!
I believe the times we are living in now will be considered the good old days Our “leaders” do not have the will or motivation to take the necessary steps to fix this mess. Even now, without the added burdens you mentioned, it is completely unsustainable. We are in deep *hit and the avergae person is oblivious. Keep prepping because it will be painful.
You are right. I might add that our leaders do not have the motivation or will to take the necessary steps to fix the problems because we have failed to elect those who would have taken those steps.