is that still a possibility or already a certainty no of course is probabilistic a session in the sense that we look at various scenarios for the war the economy and we touch probabilities to them what we do compared to other economists out there and these are houses since we touch a high probability to such an event to occur forty five percent and this is based on an number of forces that we see already at play and we can think and we think that over the next couple of years would have gathered starting in my actually qualify to cozen down to the more severe than what we have seen potential in two thousand and eight and more severe than. most economists

commonly expect and i think people around the world do you take your prediction seriously especially after your partner and co-author nouriel roubini accurately predicted the two thousand and eight downturn i gathered from your writing though that if this next crisis comes it's all regions are likely to be more multi-factor old than the origins of the crisis that is so previously. only two thousand and eight crises somehow dejan in to. us in the subprime mortgage sector and then the spread of the war although of course. intimate and ultimate causes of the crisis were already present and there were already global lead time different villages in the banking system where already very present day failures of some regulation including the two in the tendency of buying some bringing. a lot of the assets off balance sheets were global phenomena

but of course you know they they all to me it. triggered off the crisis was the explosion so to speak of the surprise mortgage market in the us this time around is more question of having as you suggest the fuck to play. and they originated in in different parts of the warthe absolutely and in your recent article with new rail roubini you give sound reasons for why the next crisis is on the cards but your starts with the united states and what you call or early times fiscal stimulus policies and by that i assume you mean trance two thousand and seventeen concession off some one hundred thirty billion dollars in additional spending that's went into infrastructural childcare treating the api oid epidemics is there ever

a bad time to invest in those areas oh i mean the problem of tax reform and to some extent of the tax cuts of the us administration and as they call him quite late in the cycle when the call that he was already very well established had ops on the verge of slowing down but at the time in which the federal reserve was already increasing rates and and therefore de economy was already somehow prone to war inflationary pressures and therefore given an extra kick why just a final if you wish for political reasons from if you economy extent point was a big. time plus the point is that these stocks are form and pass cuts out of time just to make sure the. federal budget doesn't completely explode explode and therefore they tend to. i was the end of next year and that is when we fear.

some negative impact. on the u.s. economy because the effects of this tax cuts taper off and you my face if you scope cliff but it's not just about the tax cuts there was also additional spending as i said and i think this claim of the stimulus program was ill timed and may have said not only trump supporters but also some people on the democratic side who claimed that if there's anything good to come out of the trumpet ministration on the economic front it was proving that fiscal stimulus actually works when the labor market is short of its full potential as was the case in two thousand and seventeen don't you think that the growth in the job numbers counterbalance or justified the negatives that you mentioned like for example the inflationary pressures is always good to you know have more jobs than less jobs but the unemployment

rate is now below four percent when nobody really knows where denied to ease my v four and a half or around there so we had already below the natural rate of unemployment therefore of course our job. is a good one but then you have to counterbalance what instruments you're using. against that he solved if you actually achieve in terms of voter rolls you my gain a few more quarters of positive growth a few more hundred thousands of jobs but then what happens to inflation and what happens to the reaction of the central bank to beas inflation because the central bank needs to make sure that. inflation remains on target and we already see that he's above target and then when they are. then you start having

impact on everything else we discussed on investment potential because interest rates are high. growth and eventually on employment so that's why you tend to use holy see in account to see come on rather than being there for sickly come on now i know that you are partial to the financial instability hypothesis which is sensually posits that a different jilly t. of the system increases in good times partly because it cannot make actors don't want to upset growth even when they realize that it may not be our gannett course sustainable how much does it apply to what you now see the american economy and would you guys far as to say that the current lies right now the harder they fall is going to be in two thousand and twenty yes that tends to be the case and you mention correctly hyman means key. financial instability hypothesis which is somehow still ethical books although is being increasingly accepted the

monk mainstream economists in two thousand after the two thousand and eight crisis effectively things get to incrementally war single times and people tend not to realize that the number of positions because. expose speculatory of zero will to speculate favored their way. and then eventually when something happens and the something tends to be an increase in the interest rate that goes beyond a certain point then you tend to have an event or so in the high you of being then more severe the downturn tends to be now is study clearly when the fed has increase rates that a short period of time from the peak at a session a compaction or automatic slowdown as always occurred and it would be quite unusual if were these were not to be the case especially because. nobody really knows where

the level at which interest rate because three liver stick to now has spent the last couple of months and well almost a year already extolling he's administration economic genius the job growth the economic expansion and he said only on the willing to share any of the credit with the previous administration but i wonder if this next crisis as you predict come wouldn't be fair to blame it exclusively on him no i look at it is like a question of blaming people a lot of ministrations. even perhaps policies we leave. history. told us time. after the two thousand and eight two thousand and nine crisis. fed to the government that became a democratic administration that point. in part of why to some

stun shows stimulus both in terms of monetary easing and in terms of easing and the combination of the two in fact work plus the symbolisation of the banking system by a somebody such as the dog and so on so these policies of work to because the economy has recovered and recipe somehow is worth the work a little less so in other countries but part of decisive b. was not apply this but in particular the fiscal stimulus so it's very hard for any politician of any color out of a new administration to stop the pot of the one who's going in for the pot to go genius long as possible what we claim is that the market forces a soft touch the divine surely a downturn because inevitably of what their body i mean a station in whatever they call it of by i mean a station might be now mr rose. i know that you also contend that if these benefit

storm hits the policy tools available to the current administration for addressing it will sorely be lacking why is that. more than locking i would say that i might be constrained well rounded glow because some know what this cold policy space my be. reduced to only can be reduced because just think about just to make a very simple example. u.s. fed that has interest rates they started to five twenty five because before the previous crisis they teach zero and the maybe they are going to go up to say three three and a half percent you can see already did that the fed has less room to cut interest rate that's sort of a deduction in policy space the balance should be below to relieve. q.e.

and the programs from the fed. the four or five trillion us dollar remains below that inspired of the form to tightening fiscal space in most countries start to defy to the last crisis we that to g.d.p. ratio of our of thirty forty fifty percent only some then in that the countries stuff there from a higher level but most countries now have been debt to g.d.p. nation in the hundred percent space the u.s. being one but that would be france it could be day u.k. could be other countries that have been bitterly. been fiscally beatrice in the in the past so once they have to up lie those instruments fiscal and monetary policy they might find less and less policy space in other jurisdictions and in particular in europe then it has been. song a song foam on

a vault against the pole this is the word i'm told that the five decries in particular they are standard to measure is that what i know that which means that if more of those fall this is worth to be adopted in the future. nations mine will be as it is they were going to pass that mr rose let me stop you for a second here because we need to take a very short break but i hope we will come back to this discussion and look into the implications of that potential economic crisis a bit more states and. this

is critical. to the heat actually physically pulled it out of the ground you would have well well well well. there's a lot of money with oil and with that comes. a lot of a lot of people from all over the country. if you don't make a hundred thousand dollars a year. as a minimum there's an issue. here to be. they were told sixty dollars a day hard work well work is not easy work and so they want to relieve their stress of how do they relieve their stress these men that outweigh these men that comfort these men that. people have been murdered up here people been raped they're massive drug issues up here you have a boom you have everything else that comes along with money.

i know i don't pal about. one type of time talk. no more i. will get. in slump and there is a trade in young girls sold into an underground sex industry sometimes but the people they trust the most. welcome back to worlds apart by the grinnell of rosa founder and c.e.o.

of bros and roubini associates mr rose. just before the break we were discussing this very gloomy scenario that you painted out and i heard you say that if. indeed happens the political implications in the two thousand and twenty electoral year could be massive especially taking into account the character of the current american president what is your worst fear is not just. is not just in the us in a number of countries political developments have shown a very different direction from the past now regarding the u.s. we have one of the there my be contributing to a potential severe downturn is the possibility that the president facing a potential. economic crisis starting to turn was. instruments to

gather. consensus around them that has been has happened a number of times in the past and by other instruments i think you mean the some sort of foreign policy crisis and in your article specifically you mention iran as a as a potential target right exactly because what i was about to say is that presidents can work effectively all on trade migration foreign policy and defense almost without. necessarily consent of congress and congress by the time might be divided the not necessarily of the same call of the president in which case having going to work a lot on trade and migration is the finance and foreign policy they instruments that are mains in the hands of the president and therefore in my be tempted to some form of. intervention in the middle east being a potential thought that there is

a build respect for all he's a legit recklessness an impulse even trump is the first president that hasn't initiated a new conflict that the first president in i think three day kates and even when it comes to syria he said to me bomb syria but the russians would tell you that it was done in a very careful in a very limited manner what makes you believe that trump would indeed move from he's been bastid threats to the actual bombing because so far he hasn't done it and in fact in my knowledge we are talking about a probabilistic scenario here and in my waiting some friends here everything we are saying and i'm out of assumptions that we are making on all then different fronts and is the quantity being of them the be. resulting in the severe downturn. we are discussing foreign policy from the us is

one of them but not necessarily a d. only one in fact the allies that it gaining gauging american troops seeing the least off that having taken to withdraw from them my not be as pages and initially. you know appearing and therefore in my no go for that we have just saying that is that an option on the table historically leaders do you indeed look for distractions abroad because that's where it's easier to find animals to blame but trump is unique in having no shortage of anime's at home what it would be easier and perhaps more logical for him to blame all the potential failures on saboteurs at home like for example the fat definitely and that's not excluded at all in fact we were seeing that. already some wrote some of the. rules so no commenting on what the fed

has done by making him some statements about what the fed. should do. in order to allow the u.s. economy to grow even faster potentially if that if you did so when rates were bayley at two percent and growth was three percent unemployment falling you can you can imagine the kind you can use when the economy might be is low and down interest rates will be between three and perhaps three and a half percent and unemployment at ops on these way yeah you can you can definitely see how we can increase that i totally against the fed don't potentially congress again if you get. out of it in the hands of the democrats that it meets them elections now as the end all flat. here about half of the u.s.

is public data was owned by foreign investors mainly china and japan given tromps posts on trade with china do you think beijing or even toll killer may change that strategy is with regards to the american holdings. it's very hard to to have a new deal in a. catastrophe in order to do that because that i man in a deep and liquid and safe enough space is where to park the massive amount of reserves that both china and japan have and we know they're out of pocket of the geopolitical. place and therefore as i was saying for them to change this strategy you really need a change in the geopolitical lever now in china you need to concede that they yes we have a saying. trade skin mischa's the way we might define them of course some

this might be her thing in my view being china we saw that already. but biddy ali today it is that the. underlying technological war much more important than then the trade scheme issues that we see on the surface and this is a down day for a drink agenda playing to twenty five that the chinese government is pursuing in order to get to leave the ship in a number of. high tech and top industries of the future is really more about that the trade dynamics that is on on the surface so geopolitics said this stage is more around that around this kind of conflicts rather than full confrontation isn't as long as is remains in in this kind of space we didn't see china in japan. changing completely their allocation of reserves now speaking about

responding to that potential crisis more broadly the two thousand and eight crisis lay it left a very strong unpleasant off to taste because of the financial sector bailouts you know nationalizing losses while privatizing profits do you think these too big to fail mantra can and should be applied again. a number of measures have been taken from the regulatory perspective by a number of countries around the globe in north of the to diminish the so-called too big to fail. all e.c. leaving we'll see various forms of separation within banking groups and song and so forth in order to make them better when you know it's still honestly implemented and no it is not going to is not going to happen between now and then also because memories are processed and the influence of financial

institution has been such that in fact some of the distinctive fall this is what i've been somehow already a relaxed and so dick western will. be able to withstand a novice if you have price and if they're not was going to pay for them now they oncet to the first question is they should be more of a zillion than they would in the pos because they have bets a capital eyes and they have more liquid assets that was that is out of that evolution that was imposed but they might know we stand complete market crash let alone a meltdown and in this case fiske of resources will always be a vein surely they dissolved and that of course would be. even more and therefore that's why there's that risk of severe political crisis. the next financial. in

a comic prize that you've pointed out in your article that the idea of bailouts will be particularly intolerable in the countries with resurgent populist moments but these kind of populism is self-contradictory because people suddenly don't want national money to go into saving big banks but they also don't want to see their savings evaporate do you think governments even the populists governments can really afford not to be populist in the sounds of providing some sort of occur for the population in dealing with the banking situation yes you pointed out correctly . contradiction in. economic positions it's easy to find an enemy where the fault in the way of their. political opponents and so on that's that's easy much more difficult to explain how things are once you stop telling people look you my hate the banks but when do you

put your money. you put them in the bank and what happens if the vanko zonda you don't see your money anymore now you want me to intervene ok so these kind of reasonings would be much more healthful to make people understand of real dynamics that in why people locked on consequences of crisis that of khowst nobody wants a different stories where the previous crisis. that is being say conflict of interest between politicians markets the thesis spencer can then make sense on the has made the situation worse and therefore the palm i feel betrayed by the elites so to speak of the economy and society and therefore they have this kind of a sentiment by the even if that were to occur the first line of defense sees making sure that the banking system is time realized people have access to their savings and. only off that then you think about solving the somehow the the

domestic issues izing from dot now speaking about puppy was very quickly one interesting point you make is about europe and the concern that the new crisis may simplify the existential problems of incomplete monetary union with inadequate to risk sharing and you even suggest that it may prompt eataly and others to actually added the euro zone all together would that be a rational economic decision as far as the tally ends i concerned ok let's. take a step back yes the front of the monetary union is incomplete makes vulnerable to shocks now if those shocks were to occur to this to be or that a mark into the saving in that important then political leadership over eurozone countries left to make a decision in the to make

a step forward as it happened in the past in finished and complete in the. money if union or instead allowing the shocks to be a symmetric and leaving some countries in great difficulty assuming that this political we love not making a first of this that happens in the mind of the day you might be but you my also not be there if for example there is also of the twenty one thousand european elections is in favor of these more nationalist these less in favor of for the european integration then it's a question of how individual countries will react to the hot and even if is not irrational decision if it is not even if he isn't on one through the season italy and other countries mind be finding themselves in the fringes of the euro area in a very difficult spot and then the point will be if the market forces politico will out of people's will. that determines whether that moment you know remains together

on noughts and that is in my notes well mr rose i wish i could ask you if you more questions on that about unfortunately our time is up thank you very much for sharing your perspective with us today. thank you for inviting me i encourage our viewers to keep this conversation going on our social media pages and hope to see same place same time here on worlds apart. the ability to keep inflation jamie in the bottle is evaporating so we see prices

going up across the board oil is just one of them we see interest rates rising at some slicer we see the dollar eventually cracking and have a catastrophic collapse that's usually inflationary so prices across the board go up that mix of russia saudi arabia venezuela. their oil based economies they all benefit wildly from this emerging market takes the benefit of this oil and gold gold started to perk up again but going of course would skyrocket two hundred thousand plus. i know you know. kind of. a none type of time can put enough. in film put in there is a trade in young girls sold into an underground six industry sometimes but the people who trust the most. time.

in one of the most serious bass incidents in years a russian soyuz rocket failure forces a two man crew to abort the launch of the international space station as the capsule crashes down to a. right unless you get a. little bit for a good. russian on cosmonauts alexy chin and american astronaut nick hague both arrived back where the journey started in kazakhstan some by going off to the near death experience. and it's been a real emotional roller coaster for relatives some have already embraced their

loved ones again while other family members and left.