Roubini on the Middle East

* username: rupertbu

He is simply known within market circles as Dr. Doom, since he precisely called the credit crisis and subsequent downturn in global financial markets. Today, Roubini is sharing the same concerns about asset bubbles as a result of continued low interest rates and the flood of capital pouring into equity markets and commodities. He is also not convinced about what many have defined as “V” shaped or sharp recovery.

But in my time with the economist, who is of Iranian decent and grew up in Istanbul, I decided to link our conversation to the key issues surrounding the region - notably the durability of the dollar as a reserve currency, Gulf monetary union, oil prices and Dubai’s debt crisis.

Roubini suggested that central bankers of the region look carefully at the European model when constructing the framework for Gulf monetary union saying, “One of the lessons is, monetary union can be successful if the member countries are relatively homogenous” and are prepared to set up a structure for burden sharing.