strengthened the dollar. In 2005 after Hurricane Katrina hit the US, Roubini predicted that an economic disaster was imminent; however, the next two years instead saw an increase in financial activity. In September 2006, he prognosticated the end of the real estate bubble: "When supply increases, prices fall: that's been the trend for 110 years, since 1890. But since 1997, real home prices have increased by about 90 percent. There is no economic fundamental—real income, migration, interest rates, demographics—that can explain this. It means there was a speculative bubble. And now that bubble is bursting." In the Spring 2006 issue of International Finance, he wrote an article titled "Why Central Banks Should Burst Bubbles" in which he argued that central banks should take action against asset bubbles. When asked whether the real estate ride was over, he said, "Not only is it over, it's going to be a nasty fall." By May 2009, he felt that analysts expecting the US economy to rebound in the third and fourth quarter were "too optimistic". He expected the full recession to last 24 or 36 months, and believed in the possibility of an "L-shaped" slow recovery that Japan went through in the Lost Decade. In his opinion, much of the recession's cause was due to "boom-and-bust cycles," and he felt the US economy needed to find a different growth path in the future. "We've been growing through a period of time of repeated big bubbles," he said. "We've had a model of 'growth' based on overconsumption and lack of savings. And now that model has broken down because we borrowed too much." He felt that too much human capital went into financing the "most unproductive form of capital, meaning housing" and said he would like to see America create a model of growth in more-productive activities. He felt that "sustainable growth may mean investing slowly in infrastructures for the future, and rebuilding our human capital," by investing in renewable resources. "We don't know what it's going to be," he said, "but it's going to be a challenge to find a new growth model. It's not going to be simple." In late July 2009, he warned that if no clear exit strategy were outlined and implemented, there was the potential of a “perfect storm”: fiscal deficits, rising bond yields, higher oil prices, weak profits, and a stagnant labor market, which combined could "blow the