Friday, March 26, 2010

Nouriel Roubini Warns On US-China Collision Course

Nouriel Roubini
Fresh from a meeting with Premier Wen Jiabao at the annual China Development Forum, Nouriel Roubini has put out a note to his clients.

The U.S. and China are on a “collision course” over the value of the Chinese currency and investors are underestimating the disruptions for global financial markets, according to Roubini.

“The risk of a collision course on China’s currency peg and a wider trade rift between the world’s largest debtor and creditor nations has risen significantly in recent months,” Roubini wrote in a note to clients. “Markets do not seem to be pricing in the potential consequences of the U.S. labeling China a currency manipulator, which could be significant even if both sides avoid taking immediate bilateral actions.”
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Nouriel Roubini, a professor of economics at New York University

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