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Wall Street’s ‘Dr. Doom’ says ‘World War III has already effectively begun’

30 نوفمبر 2022
الكاتب: STEVE MOLLMAN
المصدر: FORTUNE

Nouriel Roubini is tired of being called Dr. Doom. He would prefer Dr. Realist.

But in an interview published on Friday in the German publication der spiegel, he did little to overcome the sense of doom that seemed to follow him. Roubini, who predicted the 2008 housing bust and subsequent financial crisis, is a New York University economics professor and author of the new Mega Threats: Ten Dangerous Trends That Threaten Our Future, and How To Survive Them.

In der spiegel In the interview, Roubini spoke of Iran and Israel being on a collision course, fearing that NATO would engage Ukraine in the war, and that the Biden administration hopes “China will attack Taiwan as soon as possible.” “Honestly, World War III has already effectively started, certainly in Ukraine and in cyberspace,” he said.

His comments came after Igor Sechin, the head of Russian oil giant Rosneft and a top aide to Russian President Vladimir Putin, said on Thursday that “Taiwan’s return to its native port” was “on time”. He said the US’ efforts to create its own advanced microchip industry showed this.

 

If China attacks Taiwan

Roubini also noted the importance of Taiwan’s computer chip industry, saying: “Just imagine the impact of a Chinese attack on Taiwan, which produces 50% of all the world’s semiconductors and 80% of the high-end ones. It will be a global shock. We are more dependent on semiconductors than oil today.”

US Secretary of State Antony Blinken recently said Beijing had become “determined to reunify” with Taiwan “on a very rapid timeline” rather than “sticking with the status quo”.

This month Chinese leader Xi Jinping secured a third term at the Chinese Communist Party Congress twice in a decade, consolidating his power, and saying his country’s right to use force on Taiwan would never be relinquished.

Singapore-based strategic adviser Alexander Neal told Voice of America that he promoted loyalist generals to a central military commission, where he “cannot tolerate any dissent” for pulling the trigger on Taiwan.

“They have to move fast, lightning fast to secure any kind of advantage,” Neil said. “There is no place for dieting. There has always been Chinese thinking on Taiwan, and Ukraine’s standoff reaffirms the need to avoid getting caught up in a slow logistical build-up. 

 

A ‘Bad Recession’

Of course, the Ukraine war and a potential Taiwan setback are some of the things Roubini is concerned about, as the title of his book suggests.

While political leaders “should take care of Russia and Ukraine before taking care of Iran and Israel or China,” he said der spiegel“Policy makers should also think about inflation and recession, that is, stagflation.”

Roubini recently said that any claim of a soft landing for the economy at this time is “misleading”.

“We’re going to have a terrible recession, terrible deadlock and another serious financial crisis. I think that’s the baseline,” he told Bloomberg odd lot podcast this month.

He argued that central banks do not have a good option at the moment. They may continue to raise interest rates to fight inflation, or they may “finish out” for fear of recession and cut rates.

“Unfortunately, at this point, damned if you do, damned if you don’t,” Roubini said. “There is no easy way out of this. If you fight inflation, you will face recession and financial crisis. And if you do not fight inflation, you will have anchoring inflation and you will have stagflation and stagflation. Still facing financial crisis.”

He predicted “massive bankruptcy and widespread financial crisis” around the world in the coming years, as he wrote in a new York Times Op-Ed this month.

Does he have anything positive to say? Yes. Investing in Midwest real estate is a smart move. Much of America will, after all, be under water, or not habitable due to heat, drought, wildfires or other catastrophe resulting from climate change.

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Link: https://fortune.com/2022/10/28/wall-street-dr-doom-world-war-nouriel-roubini-china-taiwan-ukraine-recession/