“Doctor Doom” Forecasts Historic US Stock Market Crash 

Renowned economist and professor at New York University Nouriel Roubini has issued a stark warning that the U.S. economy is risking becoming mired in a mess of declining output, rising inflation, and skyrocketing unemployment.

Roubini said that in order to stop inflation, the Federal Reserve may need to raise interest rates by a factor of two, to 5 percent. The famous economist underlined that such an increase might, however, stifle economic expansion and result in a surge in unemployment. In addition, rate increases can lead to a debt crisis.

Known as “Doctor Doom,” Roubini also issued a stark warning. Roubini said that attempts by the U.S. regulator to control inflation might actually destroy the economy, and it may result in multiple crashes, involving stocks, bonds, credit, private equity, housing, and other assets. 

Roubini has recently issued multiple grim warnings of what lies ahead for the U.S. and its economy. He has warned that America’s recession with be both long and severe and that it will be a historic meltdown for the stock market. 

Roubini said that stagflation is here and the central banks will soon be trapped. Dr. Doom warned that a toxic combination of inflation, unemployment, and recession is coming. 

Inflation could spiral if the Fed does not raise interest rates high enough. However, rate hikes may slow growth, raise unemployment, and cause headaches for borrowers

Stubborn inflation — fueled by Russia’s invasion of Ukraine disrupting global food and fuel supplies, and the COVID-19 pandemic continuing to prompt lockdowns and restrict international trade — might force the Fed to drive the US economy into an even deeper recession than the one it avoided, he added.

“I worry about a stagflationary debt crisis, because you have the worst of the ’70s in terms of supply shocks, and you have the worst of the global financial crisis because of too much debt, and that combination is dangerous,” Roubini said.

The economist was one of the few experts to foresee the collapse of the housing bubble in the late 2000s. 

Roubini warned that both stocks and long-term bonds would likely slump in value if inflation remains a problem. He suggested investors hedge their portfolios with alternative assets such as short-term and inflation-indexed bonds, gold and other commodities, real estate, infrastructure, and even bitcoin.

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