Nouriel Roubini spoke with Michael Milken yesterday at the Milken Global Conference.
He has a new #1 threat to the world economy: Iran.
Roubini, a notorious doomsayer and chairman of Roubini Global Economics, expects both Iran’s push into nuclear weapons and the pushback from Iran and Israel to ramp up in the second half of 2012.
It’s unlikely that President Obama will retaliate in any way, at least until after the November presidential election. However, if the situation does heat up, by 2013, whoever is the next president will likely be forced to push back.
The conversation then spilled into energy, according to Reuters:
Roubini warned of a massive oil shock following a potential clash between Iran and Israel – or possibly the United States, sometime after the November presidential elections. He talked about geopolitical instability in the Middle East. “It’s a mess,” he said.
Milken countered with a graph showing the U.S. has bigger fossil fuel reserves than any other country in the world, and suggested that natural gas, extracted from shale reserves that are largely outside the Middle East, will eventually make Arab clashes irrelevant to energy.
Roubini: “I think people are a bit too optimistic about how fast the shale revolution is going to occur…. I think people believe that in five years from now we are going to be energy independent – I think they are deluding themselves… I think it’s more like a 10-20 year process.”