Dr. Doom Predicts

My own all-purpose pessimism notwithstanding, the stock markets have been doing well over the past several months. But, is it a trap, designed to lure us into complacency before the markets swallow up our savings?

Market strategists like Jeremy Grantham and hedge fund operators like Leon Cooperman-- people who know markets-- remain pessimistic. They advise avoiding stocks for now.

Among the gloomsters sits Nouriel Roubini. You know that Roubini has been chronically pessimistic for years now, but that he has often made some excellent calls. As happened in 2008.

Now, we have him explaining that we are headed for a perfect storm. This storm will cause stock prices to drop some 30%. So, forewarned is forearmed.

What is a perfect storm? We are, Roubini predicts, facing a recession, inflation and a debt crisis.

A "perfect storm" is brewing in 2023, and a markets are going to get hit with a recession, debt crisis, and out-of-control inflation, according to "Dr. Doom" economist Nouriel Roubini.

Roubini, one of the first economists to call the 2008 recession, has been warning for months of a stagflationary debt crisis, which combines the worst aspects of 70s-style stagflation and the '08 debt crisis.

"I do believe that a stagflationary crisis is going to emerge this year," Roubini said in an interview with Australia's ABC on Thursday.

With consumer inflation still sticky at 6.4%, Roubini estimated that the Federal Reserve would need to lift benchmark rates "well above" 6% for inflation to fall back to its 2% target.

The result:

But that could spark a severe recession, stock market crash, and an explosion in debt defaults, leaving the Fed with no choice but to back off its inflation fight and let prices spiral out of control, he added. The result would be a steep recession anyway, followed by more debt and inflation problems.

What does Roubini think you should buy here? Glad you asked:

He urged investors to protect themselves by choosing inflation hedges, such as gold, inflation-indexed bonds, and short-term bonds. Those picks are likely to beat stocks and bonds, he said, which will suffer in the new economic regime.

Of course, Joe Biden thinks we have never had it so good. Now, are you willing to bet the ranch, and your retirement funds, on Joe Biden or would you prefer a Nouriel Roubini-- along with Jeremy Grantham and Leon Cooperman?