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Roubini, Surprisingly, Is Bullish on U.S. Economy

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Either hell hath frozen over, or Nouriel Roubini has a sunnier disposition after spending time with all those supermodels in his (recently closed) rooftop hot tub.

CNBC reports on comments Roubini made at IndexUniverse’s Inside Commodities conference on Monday.

Although he used the term “anemic” several times to describe the global economic recovery, “the word “crisis” or any of its synonyms was missing almost entirely from the speech,” the network reports.  

It adds that he maintained the U.S. will be better positioned than most of its global competitors, leading to an appreciation in its currency, no bond market crash and only a gradual increase in interest rates.

“The dollar is likely to become stronger rather than weaker,” Roubini said. “The thing about the U.S. compared to other advanced economies…the fundamentals for the U.S. are much better.”

Among the advantages he cited, CNBC said, are “growth in productivity and technology as well as continued easy money policies from the Federal Reserve,” even though Roubini sees the Fed cutting back on its quantitative easing soon and raising rates by 2015.

As for investing implications, he said he would be “overweight U.S. equities” and made a case for a stronger dollar as well. 

“The U.S. is much more advanced and has much more success than other economies. The growth in the U.S. is going to be much faster than Europe, the U.K. and Japan,” Roubini said. “Gradually the dollar is going to increase in value rather than collapse the way some dollar doomsday folks believe.” 

From a global perspective, CNBC added, he did caution against banking on a strong recovery in emerging markets, reasoning that China’s growth is slowing and the so-called commodity supercycle is winding down, while U.S. central bank easing, and the liquidity it provides, is going to start evaporating.

Check out Warnings of Market Crash Similar to ’87 Abound as Main Street Pain Worsens on ThinkAdvisor.


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