A ‘stagflation’ debt crisis of dark storm clouds is brewing on the economic horizon, according to a top academic, giving all the more reason to hold gold as a stable, safe haven asset.
Professor Nouriel Roubini, from the much respected NYU Stern School of Business – one of the world’s oldest business schools – says a momentous crisis is inevitable as a result of soaring government debt. He says that a period of low growth and high inflation could cripple economic recovery.
Writing in the Guardian Newspaper, the economic professor said, “The stagflation of the 1970s will soon meet the debt crises of the post-2008 period. The question is not if but when. We are left with the worst of both the stagflationary 1970s and the 2007-10 period. Debt ratios are much higher than in the 1970s, and a mix of loose economic policies and negative supply shocks threatens to fuel inflation rather than deflation, setting the stage for the mother of stagflationary debt crises over the next few years.
“The warning signs are already apparent in today’s high price-to-earnings ratios, low equity risk premia, inflated housing and tech assets, and the irrational exuberance surrounding special purpose acquisition companies, the crypto sector, high-yield corporate debt, collateralised loan obligations, private equity, meme stocks, and runaway retail day trading. At some point, this boom will culminate in a Minsky moment (a sudden loss of confidence), and tighter monetary policies will trigger a bust and crash.
As we have seen countless times, gold shines even brighter during periods of economic uncertainty, further adding fuel to price gains. Act quickly, buy now.