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Economist fears a rapid unraveling of our debt-based economy

The turbulent stock markets and fears gripping Wall Street are no surprise to Ravi Batra, best selling author of recently published The New Golden Age: The Coming Revolution against Political Corruption and Economic Chaos. The Southern Methodist University professor of economics predicted the current market upheaval last February in an interview with Texas Monthly: “When the American housing bubble starts to burst around mid-2007, and beyond, foreign investors will head for the exits…”

Batra fears a rapid unraveling of our debt-based economy, rising unemployment, bulging poverty, and more stock market crashes. “The current crisis is just a tip of the vast American mortgage iceberg. Fundamental reforms are needed immediately - not just the “band aid” that the Fed applied.”

“The single most worrisome global economic problem today is the U.S. housing bubble that has been primarily financed by foreign money,” according to Batra. “While it is in the self-interest of foreign governments to finance the U.S. trade deficit, private groups have no such interest or obligation. The continued bursting of the U.S. bubble will result in increased loan defaults and could start a foreign stampede out of American assets, leading to a collapse of the dollar by the end of the decade.”

Batra has made a career out of controversial forecasts, including:

*The ayatollahs would take over Iran in 1979.
*Soviet Communism would vanish by the end of the century.
*The United States would be entangled in a major fight with fundamentalist Islam starting around 2000.

Batra uses a variety of economic and historical cycles to bolster his arguments. According to his economic cycle model, we are now in the midst of an inflationary period where real estate and oil prices zoom. Such a cycle has occurred every third decade in American history, with the 1970s being the last such decade.

Contact Prof. Batra at 214-507-5761 or at rbatra@smu.edu

Media Contact:
Kim Cobb
SMU News and Media Relations
214-768-7654
cobbk@smu.edu

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