\u201cBond market vigilantes have already woken up in Greece, in Spain, in Portugal, in Ireland, in Iceland, and soon enough they could wake up in the U.K., in Japan, in the United States, if we keep on running very large fiscal deficits,\u201d\u009d Roubini said at an event at the London School of Economics yesterday. \u201cThe chances are, they are going to wake up in the United States in the next three years and say, \u201d\u02dcthis is unsustainable.\u2019\u201d\u009d<\/p>\n
The euro has touched a four-year low against the dollar on concern nations with the largest budget deficits will struggle to meet the European Union\u2019s austerity requirements. Roubini, speaking in a lecture hall packed with students who then queued to meet him at a book-signing, suggested that the public debt burden incurred after the banking panic of 2008 may now cause the financial crisis to metamorphose.<\/p>\n
\u201cThere is now a massive re-leveraging of the public sector, with budget deficits on the order of 10 percent\u201d\u009d of gross domestic product \u201cin a number of countries,\u201d\u009d Roubini said. \u201cHistory would suggest that maybe this crisis is not really over. We just finished the first stage and there\u2019s a risk of ending up in the second stage of this financial crisis.\u201d\u009d<\/p>\n