Nouriel Roubini: U.S. Economy is a "fiscal train wreck"

by John Stonestreet
10/29/10

(Reuters) - The U.S. economy is a "fiscal train wreck" waiting to happen that risks ushering in a period of stagnation featuring by minimal growth, high unemployment and deflationary pressure, U.S. economist Nouriel Roubini wrote on Friday.

In a commentary for the Financial Times, Roubini -- one of the first economists to predict the housing crash in the United States and known as 'Dr Doom' for his pessimistic forecasts -- said fiscal and monetary stimulus had prevented another depression.

But he said that further quantitative easing likely to be announced by the Federal Reserve next Wednesday will have little effect on U.S. growth in 2011, "so fiscal policy should be doing some of the lifting to prevent a double dip recession," he said.

He said the U.S. remains on an "unsustainable fiscal course" and the likely make-up of Congress after elections next Tuesday, in which the Republicans look set for strong gains, virtually takes fiscal reform off the agenda.

"The risk ... is that something on the fiscal side will snap ... The trigger could be a debt rollover crisis in a major U.S. state government," he wrote.

"The worst of the coming fiscal train wreck will be prevented by the Fed's easing. But the risk is (Obama) ... will then preside over ... a Japanese style stagnation, where growth is barely positive, and deflationary pressures and high unemployment linger."

Inside Job Trailer (thank you Huffington Post and Nouriel Roubini)

The trailer for Charles Ferguson's new documentary "Inside Job" has been making its way around the web (hat tip to Nouriel Roubini's Twitter feed). The film has been getting serious love from critics, including winning the top award at Cannes this year.

Roger Ebert called the the film "devastating" summed it up this way in May:

"From Roosevelt until Reagan, the American economy enjoyed 40 years of stability, prosperity and growth. Beginning with Reagan's moves against financial regulation, that sound base has been progressively eroded. The crucial federal error (in administrations of both parties) was to allow financial institutions to trade on their own behalf. Today many large trading banks are betting against their own customers."

"Inside Job" is due out in October. WATCH the trailer:

Meltup...you owe it to yourself to Watch this 55 Minute Video!!

Grandpa encourages all to take 55 minutes out of their evening TV viewing and watch the following. This is a realistic presentation of this country's financial situation and it is not pretty. You owe it to yourself, your family and grandchildren everywhere to watch and take action. DO NOT assume anyone in congress will change without all of us forcing a change.

Pay close attention to how the government calculates (a.k.a manipulates) the Consumer Price Index (CPI). The manner in which the government calculates CPI is solely to supress social security payments. And thanks to Ben Bernanke's interest rate policy, retirees who saved money in order to retire would need $100,000,000 in their account to earn $50,000 of interest. Congress does not care about Ben's interest rate policy as they recently extended his reign of terror for another 4 years. Yes, our parents and their parents are taking the hit.

The new definition of a balanced budget does not include interest paid expenses!!!!

Our grandchildren deserve better! Pass along the video to your close friends and family and ask them to do the same. Then crank up your email and put congress on notice!! Ben Bernanke, Christina Romer, CNBC and Tim Geithner continue to spew a complete distortion of reality as they have their own agenda.

Grandpa also encourages you to visit http://www.chrismartenson.com/ and watch Crash Course.


http://inflation.us/

Nouriel Roubini: Greece is just the tip of the iceberg. Odds that anyone in congress will listen to this message...1 in 10 trillion

Nouriel Roubini : In my view what's happening in Greece is just the tip of an iceberg , ...we socialized these private losses , now we have large budget deficits in Europe in Japan in the United States the bond market vigilantes are waking up in Greece in Portugal in Spain at some point they are going to wake up in UK in Japan in the United States we are running a trillion and half deficit it is obviously over time not sustainable ....

America's debt is unsustainable says Nouriel Roubini , for now the FED can keep interest rates at Zero and the rest of the world is financing us but this situation cannot last forever