Jamesian Philosophy Refreshed

Nouriel Roubini recently tweeted, "Currency wars coming, but don't bet on gold." Roubini is an economist affiliated with New York University, Stern Sch. of Business. He has had an on-and-off relationship with the International Monetary Fund, and is probably best known to the general economics-literate public for the book Bailouts or Bail-Ins? (2004). That Roubini believes "currency wars" are coming means that opinion has gone well beyond the "usual suspects." But why does he mean you shouldn't bet on gold? In essence, he believes that as all currencies are about to drop in value relative to real assets, you should do your best to turn your currency into real assets. And this doesn't mean shiny metals. It means real estate and equities.

Soon after Janet Yellen's confirmation hearing, Nouriel Roubini prepared a list of ten important questions nobody had asked her, and tweeted them. Of course, given the nature of twitter, he had to offer these questions one by one. Given the nature of a blog, I can put them all together for him here. 1. Do you support optimal control, the notion that inflation sometimes has to be allowed to go above target? 2. You have written that inflation may have to go above target for awhile to reduce labor slack. Do you support this optimal control? 3. Do you agree with Governor [Jeremy C.] Stein that macro-pru will not be sufficient to control bubbles? Would you raise rates sooner to prick bubbles? 4. While you say 'no bubble' today, what is the risk that slow QE exit and policy rate normalization over  4 years will cause bubbles down the line? 5. If the current approach to too-big-to-fail will not work would you down the line support breaking up big banks to deal with ...