/Crypto Critic Roubini: Trump’s ‘Flirting With Mutually Assured Economic Destruction’

Crypto Critic Roubini: Trump’s ‘Flirting With Mutually Assured Economic Destruction’

In an article published on MarketWatch, crypto critic Nouriel Roubini asserted that the risk of a financial crisis has grown significantly, mainly due to President Trump. While stock market indexes grew 20% in 2017, markets have been trading sideways for a major part of 2018, followed by steep drops across several sectors as markets closed for 2018.

Roubini stated that the growth in stock markets over 2017 can be attributed to tax cuts, which have accrued mainly to corporate entities. Secondly, the trump administration is ambitious towards deregulation within certain sectors. Apart from this, Trump has also gone after the Fed, which recently hiked their rates by a quarter point.

A professor of economics at the Stern School of Business at NYU, Roubini said:

Trump is now the Dr. Strangelove of financial markets. Like the paranoid madman in Stanley Kubrick’s classic film, he is flirting with mutually assured economic destruction. Now that markets see the danger, the risk of a financial crisis and global recession has grown.

Roubini Is Fervently Anti-Crypto

He made headlines when he bashed cryptocurrencies and bitcoin in general, stating that “Crypto is the mother or father of all scams and bubbles,” along with other severely dangerous claims, even going as far as taking a shot at stablecoins – which have gained steam throughout 2018.

And the biggest scam of all is the case of ‘stable coins’ – starting with Tether – that claimed to be pegged one to one to the US dollar but are not fully collateralized by an equal backing of true US dollars.

Roubini previously testified before the United States Senate Committee On Banking, Housing, and Urban Affairs, and subsequently got into a heated debate against Ethereum creator Vitalik Buterin. He also falsely claimed that crypto is centralized.

Markets have had a shaky close toward the end of 2018, which is mostly attributed to uncertainty surrounding China. However, Roubini states that recent troubles are due to Trump. Tax cuts have pushed the Long-term interest rate. Moreover, Trump’s immigration policies might affect the growth of labour-supply which can have grave implications, given Silicon Valley’s dependence on foreign talent

The crypto community’s distaste in Roubini cannot be denied. He, however, predicted the financial crisis of 2008, that occurred due to the collapse of the housing market, which compels anyone to take his claims seriously. According to Roubini, almost all of the tax cuts accrued to the corporate sector, which isn’t a good sign. Secondly, US Sanctions against Iran pushed Oil prices up.

This was followed by Saudi Arabia ramping up their oil production at the behest of Trump, which resulted in a steep decline in oil prices.

The volatility caused by this indirectly affects US Energy based companies. Moreover, the volatile price of oil has severely impacted consumption and production.

Roubini also asserted that a full scale trade war with China cannot be ruled out, and if it does happen – will have a grave impact on the economy, along with disrupting supply chains worldwide.

Featured image from Shutterstock.

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