It Is Safe to Resume Ignoring the Prophets of Doom ... Right? - NYTimes.com →
Adam Davidson via The NY Times
For nearly a decade, it turns out, the most accurate forecasts have come from the fringe. So it’s upsetting to learn that many of those same Cassandras now believe, for different reasons, that we are on the brink of another catastrophe that may be far worse. Wolff, the Marxist, fears that China may be entering a significant slowdown, which, combined with Europe’s all-but-inevitable recession, could send the world into an economic tailspin.
Roubini, now one of the world’s most visible economic thinkers, has a similar view, though he sees the timing differently, with the worst coming in 2013 or 2014, when China will face a situation like the one the United States experienced in 2008. Its banks, he says, will reveal huge investments in nonsensical bubble projects. The world will question China’s solvency, and the subsequent chaos will destroy whatever fragile recovery is under way. Schiff also paints a dire picture, but for essentially the opposite reason, saying America’s indebtedness and currency policy will cause another crash.
It’s much less lonely being a doomsayer these days. Steve Hanke, an economist at Johns Hopkins, says there’s a 50 percent chance of a recession this year. Lakshman Achuthan, of the eerily accurate Economic Cycle Research Institute, predicts a return of double-digit unemployment. They are downright rosy compared to George Soros, who has warned of violent riots throughout the world and a possible total global financial collapse. I really hope these guys are wrong.
(Source: underpaidgenius)
