Roubini vs. El-Erian: How Bad Off Is the Economy? | NOURIEL ROUBINI BLOG

Thursday, January 16, 2014

Roubini vs. El-Erian: How Bad Off Is the Economy?

Bloomberg Television's "Lunch Money" Host Matt Miller reports on the global economy. (Source: Bloomberg)

The arguably more positive outlook about the US and the global economy implies that over time the Federal Reserve and other central banks will exit from quantitative easing and zero interest policy rates, which means that real rates will rise, rather than fall. With gold performing better in a zero or negative interest rate environment Roubini thus sees its attraction waning as interest rates start to rise.Roubini argues that some of the Central banks of the more indebted nations may be tempted to liquidate part of their gold holdings and thus further depress the gold market. He points specifically to Cyprus where a report that it might sell a small fraction -- some €400 million ($520 million) -- of its gold reserves may have contributed to triggering a 13% fall in gold prices in April. Countries like Italy, which has massive gold reserves (above $130 billion), he says, could be similarly tempted, driving down prices further Roubini comments..
Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Nouriel Roubini, (born March 29, 1958, Istanbul, Turkey), Turkish-born American economist and educator who was best known for predicting the 2007–08 subprime mortgage crisis in the United States and the subsequent global financial crisis.

Born to Iranian Jewish parents, Roubini moved with his family to Iran and Israel before they settled in Italy in 1962. After a year at Hebrew University of Jerusalem, he studied economics at Bocconi University in Milan (B.A., 1982) and Harvard University (Ph.D., 1988), where he specialized in macroeconomics and international economics. He joined the economics faculty at Yale University in 1988 and taught there until 1995, when he moved to New York University. He also served as a visiting scholar to the International Monetary Fund (IMF), was a research associate with the National Bureau of Economic Research (NBER), held single-year terms on the White House Council of Economic Advisers (1998–99) and at the U.S. Department of the Treasury (1999–2000), and cofounded (2004) the consulting firm Roubini Global Economics. Roubini spent much of his early career studying countries that experienced extreme economic failures, such as Mexico (in 1994), Thailand and other countries associated with the 1997 Asian financial crisis, Russia (1998), and Argentina (2000). He determined that each shared one common element: a massive current account deficit.(www.britannica.com)

Nouriel Roubini is the Chairman and CEO of Roubini Macro Associates, LLC, his own global macroeconomic consultancy firm. He is also a professor of economics at New York University’s Stern School of Business. Dr. Roubini has extensive policy experience as well as broad academic credentials. From 1998 to 2000, he served as the senior economist for international affairs on the White House Council of Economic Advisors and then the senior advisor to the undersecretary for international affairs at the U.S. Treasury Department, helping to resolve the Asian and global financial crises, among other issues. The International Monetary Fund, the World Bank and numerous other prominent public and private institutions have drawn upon his consulting expertise.