New Delhi: Zoho’s Chief Scientist and Co-founder Sridhar Vembu on Saturday agreed with former IMF Chief Economist Gita Gopinath, regarding the huge economic bubble in the US stock market.
Vembu said that a systemic event like the global financial crisis of 2008-9 cannot be ruled out.
Zoho’s founder responded on social media platform X to Gopinath’s warning saying, “I agree with Dr Gita Gopinath. The US stock market is in a clear and massive bubble. The degree of leverage in the system means that we cannot rule out a systemic event like the global financial crisis of 2008.”
Vembu also warned that the gold price trend is indicative of a systemic financial risk.
“Gold is also flashing a big warning signal. I don’t think of gold as an investment, I think of it as insurance against systemic financial risk. Ultimately finance is all about trust and when debt levels reach this high, trust breaks down. I am sure AI will work hard to repay all the debt in the system,” his X post read.
His post tagged Gopinath’s warning which said that global exposure “to US equities is at record levels.”
“A stock market correction would have more severe and global consequences as compared to what followed the dot-com crash. The tariff wars and lack of fiscal space compounds the problem,” Gopinath said.
She urged for higher growth and returns across more countries and regions instead of a focus on the US, adding that the underlying problem is not “unbalanced trade” but “unbalanced growth”.
Earlier in the month, Gopinath said that US President Donald Trump’s tariff proposals acted as a tax on US consumers, raised inflation, and had no benefit to the American economy.
