Friday, May 16, 2014

Doomsayers Nouriel Roubini and Peter Schiff in War of Words

Two of the global economy's highest-profile bears found themselves on opposing sides of the fence Wednesday in a heated public exchange.

New York University economist Nouriel Roubini—"Dr. Doom" on Wall Street—and Peter Schiff, the head of Euro Pacific Capital and longtime critic of inflationary central bank policy, squared off during the opening day of SkyBridge Capital's SALT 2014 conference.

Primarily at issue was Schiff's ongoing prediction that Federal Reservemonetary easing is pushing the U.S. economy into hyperinflation, and a corresponding argument that the central bank shouldn't resist deflation because it helps consumers.

"Falling prices do not threaten consumers," he said. "Consumers benefit from falling prices."

"What you're saying about deflation is nonsense," Roubini told Schiff as the two sat next to each in front of thousands of hedge fund managers and investment pros.

"I totally disagree with Peter. His arguments about deflation are nonsense," Roubini continued. "We had deflation with the Great Depression…We had 20 years of deflation in Japan where there was no economic growth."

Roubini's rejoinder drew a strong round of applause, but Schiff had his supporters, too.

The two took over most of the discussion as the panel progressed, continuing to argue even after their microphones had been turned off.

- Source, CNBC