World facing clutch of crises and that incoming recession will be worse than most analysts predict, says expert
If all that isn’t bad enough, a looming climate disaster is now almost inevitable as countries and companies fudge on their net zero targets and Russia’s war in Ukraine pushes us back towards fossil fuels.
“We totter now on a precipice, the ground shaking beneath us. Yet most of us still imagine that the future will resemble the past. That’s a whopping mistake,” he says. But this cannot go on forever. Eventually, the cost of servicing debt begins to “smother economic growth”. While interest rates were on the floor, countries and companies got away with it. Not anymore.In debt terms, the entire world now resembles Argentina, a country that has defaulted four times since 1980, he says. He insists he isn’t against debt just that it needs to be temporary and needs to finance investment that eventually pays for the cost of financing it.
We’ve reached “the tipping point of a debt supercycle ... Recession and high-interest rates will hobble all but the sturdiest institutions, banks, global corporations, and countries,” he says. Roubini suggests Italy — which has a national debt of €2.7 trillion and climbing — is particularly vulnerable. If it collapses and Germany decides not to bail it out, the euro zone could unravel, Roubini warns.
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