ROUBINI: If Everything Goes Wrong, The Fed Will Start Buying Stocks

“Nouriel Roubini thinks things could get bad after the U.S. presidential elections in November.

The NYU economist – known as “Dr. Doom” and the forecaster of the “global perfect storm” for the world economy in 2013 – told Reuters’ Chrystia Freeland in an interview that the Fed may not be able to prevent the next stock market plunge.

Roubini told Reuters that the Fed could even try to buy stocks to keep things afloat at some point:

“There might be a weak rally because people are being cheered by more quantitative easing by (Chairman Ben) Bernanke and the Fed, but if the economy is weakening, that is going to put downward pressure on earnings growth,” said Roubini.

Roubini said the Federal Reserve may be pushed toward unconventional policy options as the stimulative effect of successive waves of quantitative easing – effectively printing money to buy government bonds – diminishes over time.”

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