Video: Dr. Nouriel Roubini on Squawk Box -- Aired Aug. 26, 2010
Outstanding interview. This is lucid Nouriel. He predicts Q3 GDP of ZERO. And says Bernanke has no options and that QE v. 2.0 will fail. No shit, Sherlock. Quotes inside.
And for the record, the recession never ended.
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From CNBC
The U.S. can't run a budget deficit of 15 to 20 percent of GDP, he said. In addition, quantitative easing is unlikely to have any effect in prompting banks to lend.
"Banks today are sitting on $1 trillion of excess reserves that they are not lending out" and earning 0.25 percent on, he said. "Why would they want to lend more if we do more QE?"
The U.S. is facing a "liquidity trap," which is when financial and credit systems get stuck, Roubini said.
And with companies discounting prices and a glut in the labor market, the biggest threat to the economy is deflation, he said.
"In the short run we may end up like Japan," he said.
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