Dr. Doom strikes again: Get set for three years of deflation


This observation may send the inflation hawks scurrying back to their nests: New York University economics professor Nouriel "Dr. Doom" Roubini says excess capacity in the global economy may lead to a deflationary period lasting as long as three years.

"There is already excess capacity in the global economy because of the over-investment in capacity by China, Asia and other emerging markets," Roubini told Bloomberg News in Singapore Wednesday. "Without an increase in global demand, we will have even more excess capacity," and China "is not building domestic demand," he said.