You can’t accuse economist Nouriel Roubini of pulling his punches on the subject of cryptocurrencies.
The man given the moniker “Dr. Doom” for correctly predicting the financial crisis of 2008 has come up with seven “C” words to describe cryptocurrencies
“Concealed, Corrupt, Criminals, Crooks, Con Men, Carnival-barkers, Cult, Crappy,” he wrote on Twitter.
Roubini also included “@cz_binance” in that group, referring to Changpeng Zhao, chief executive of Binance, the world’s largest digital currency exchange.
The seven “C”s equal a “melting-down pyramid scheme,” which equals a “collapsing Ponzi scheme,” which equals the “mother of all bank runs,” which equals a “collapsing house of cards,” which equals a “suckers’ shit-coins shitshow,” Roubini tweeted.
Apparently he’s not too high on the cryptocurrency market, as it struggles amid the meltdown of digital currency exchange FTX.
‘Dumb’ Venture Capital Firms
Roubini also isn’t too impressed with the venture capital firms, such as Sequoia Capital, that poured money into FTX.
“Dumb VCs!” he tweeted.
“U get a bizarre f-ing process that does not look like the paragon of efficient markets. VCs see what all their friends are chattering about & their friends keep talking about this company. And they start FOMOing [fear of missing out] & then find a way to get into that,” he tweeted.
Roubini isn’t passing out any awards to the government of the Bahamas, where FTX is based, either.
“The Bahamas is a pathetic & corrupt banana republic, with the worst supervision and regulation of crypto scams,” Roubini tweeted. “After this FTX scandal one should wonder why it is a sovereign state!”
Roubini’s Dire Economic Forecast
Meanwhile, when it comes to the economy, Roubini is skeptical that the Federal Reserve’s interest-rate increases will result in a soft landing, where it quells inflation without sending the economy into a recession.
Since World War II, there has never been a case where the Fed achieved a soft landing with inflation above 5% and unemployment below 5%, Roubini wrote on Project Syndicate. Unemployment registered 3.7% in October.
We aren’t in a recession yet, he said. But the data “points to a sharp slowdown that will grow even worse with monetary-policy tightening,” he said. “A hard landing by year’s end should be regarded as the baseline scenario.”
While some economists foresee a mild, short recession, Roubini doesn’t. Rather, he expects a “protracted stagflationary debt crisis.”
And, “the latest distress in financial markets – including bond and credit markets – has reinforced my view that central banks’ efforts to bring inflation back down to target will cause both an economic and a financial crash,” Roubini said
As for stocks, they “have not yet fully priced in even a mild and short hard landing,” he said.
“Equities will fall by about 30% in a mild recession, and by 40% or more in the severe stagflationary debt crisis that I have predicted for the global economy.”