Wednesday, January 22, 2014

Roubini: Bitcoin is Likely a Fed Inspired Bubble Just Like Housing

At a breakfast event hosted on Friday by Time Inc, NYU economist Nouriel Roubini warned on bubbles in the economy, including with Bitcoin. CNN reports:
 Roubini says the Fed is caught in a position where it needs to do more to help the economy, but at the same time, it's beginning to create new bubbles. He referred to what he sees now as "frothiness," pointing in particular to housing, junk bonds, and, potentially, bitcoins. But in two or three years time, Roubini says we could have a problem that leads to another financial crisis.
Roubini is a mixed bag when it comes to his views about economics. He is a Keynesian, but he is also an independent thinker, who clearly watches the data closely. He also said nice things about the Austrian school in his book, Crisis Economics: A Crash Course in the Future of Finance. You would never get such comments from, say, Paul Krugman.

As for his take on Bitcoin, the idea that the climb is spiked,to some degree by Fed money printing is something that I have been thinking, but points to Roubini, he is the first to publicly state the idea.


  1. Sure, it's in a Fed inspired bubble. If the Fed stops printing money, the dollar value of bitcoin will collapse, along with the entire financial system.

    Do you think the Fed is going to stop printing money?

    1. If the Fed stops printing money, we will have to use just coins, credit cards, and checks. And of course wire money, etc. What a weird question!

  2. I think of Roubini as a 'player'.

    He is to Austrian economics what Rand Paul is to libertarianism.

    He makes a few correct points, points out bubbles, etc. and then in the final analysis.... BOOM. He got ya.

  3. I like when you refer back to earlier posts sometimes RW. I read the post about Roubini before, but it's nice to have my memory refreshed at times and when I re-read things I catch things at times that I somehow missed.

  4. Some may call it a "bubble" but I think the more apt terminology is "the flight to real values".