Zoho’s Sridhar Vembu Echoes IMF Economist’s US Stock Market Bubble Warning
Zoho co-founder Sridhar Vembu has endorsed former IMF Chief Economist Gita Gopinath’s stark warning about a “massive bubble” in the US stock market, suggesting a systemic financial crisis similar to 2008 cannot be ruled out.
Key Takeaways
- Sridhar Vembu agrees with Gita Gopinath’s assessment of a “clear and massive bubble” in US stocks.
- High leverage in the system raises risk of a 2008-level systemic event.
- Gold prices are flashing warning signals about systemic financial risk.
- Global exposure to US equities is at record levels, amplifying potential fallout.
Vembu’s Direct Warning on Social Media
Responding to Gopinath’s analysis on platform X, Vembu stated: “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.”
Gold Signals Systemic Risk
Vembu further highlighted gold’s price movement as indicative of broader financial concerns. “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,” he wrote, adding that high debt levels ultimately break down trust in the financial system.
Gopinath’s Global Concerns
Gopinath’s original warning noted that global exposure “to US equities is at record levels.” She cautioned that any stock market correction would have “more severe and global consequences as compared to what followed the dot-com crash,” with tariff wars and limited fiscal space compounding the problem.
The economist emphasized that the core issue isn’t “unbalanced trade” but “unbalanced growth,” urging for higher growth and returns across more countries rather than concentrated US focus.
Earlier this month, Gopinath had also criticized former President Donald Trump’s tariff proposals, stating they acted as a tax on US consumers, raised inflation, and provided no benefit to the American economy.
