Act now or let the crisis be

For centuries, as we have seen, crises have followed a pretty predictable path. Foreign investment flows into a country and helps fuel an asset bubble of one sort or another. In the process, as private consumption rises and investment booms, the country's current account deficit widens. Large fiscal deficit may emerge, and debt and leverage accumulate. At some point, the bubble bursts, and various sectors of the economy suffer. Eventually, the country defaults on its debt, or its currency collapses; or both happen at once,'' Nouriel Roubini wrote in Crisis Economics.

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