Roubini: Significant Risk Of Bond Vigilantes Waking Up To U.S. Problems In Two Years

Nouriel Roubini at Milken Institute

Right now, “The bond vigilantes are walking out on Greece, Spain, Portugal, the U.K. and Iceland.” according to Nouriel Roubini speaking at the Milken Institute.

They could next start walking out on the U.S., even in the relatively near-term.

“Today we are at the stage at which… debt levels at the private level have stabilised… [but] there’s a massive leveraging of the public sector.”

“The thing I worry the most about right is the build up of sovereign debt.”

“Unfortunately in the U.S. the bond market vigilantes have not woken up.”

“Eventually, the fiscal problems of the U.S. will also come to the fore… The risk of something serious happening in the U.S. in the next two or three years is going to be significant”

The only way that the U.S. will be pressured to bring its debt growth under control is for bond markets to show far more concern than they do right now, he explained.


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