Roubini Says Greece `Tip of Iceberg' as Sovereign Debt Threatens Recovery

[marmar]

Roubini Says Rising Debt Leads to Inflation, Defaults (Update1)
By Vivien Lou Chen and Gabrielle Coppola


April 28 (Bloomberg) -- Nouriel Roubini, the New York University professor who predicted the U.S. recession more than a year before its start in December 2007, said rising sovereign debt from the U.S. to Japan and Greece will ultimately lead to higher inflation or government defaults.

“While today markets are worried about Greece, Greece is just the tip of the iceberg, or the canary in the coal mine for a much broader range of fiscal problems,” Roubini, 52, said today during a discussion on financial markets at the Milken Institute Global Conference in Beverly Hills, California. Increasing tax revenue won’t be enough “to save the day.”

Roubini’s remarks underscore statements by officials such as Dominique Strauss-Kahn, managing director of the International Monetary Fund, that the global economy still faces risks. Credit-rating cuts on Greece, Portugal and Spain in the past two days are spurring investors’ concern that the European deficit crisis is spreading and intensifying pressure on policy makers to widen a bailout package.

“The thing I worry about is the buildup of sovereign debt,” Roubini, who teaches at NYU’s Stern School of Business, told attendees at the Beverly Hilton hotel. If the issue isn’t addressed, nations will either fail to meet obligations or experience higher inflation as officials “monetize” their debts, or print money to tackle the shortfalls. .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a8BNhcJXJZW0&pos=1

[girl gone mad]

1. Good Q&A from today..

for those who might be intereted:

http://www.milkeninstitute.org/events/gcprogram.taf?function=detail&EvID=2257&eventid=GC10

Roubini thinks Eurozone is doomed. :)

[muriel_volestrangler]

2. That's a strange smiley to use after 'doomed'

Are you happy at the prospect of places being 'doomed'?