The real economy is barely recovering while markets are going this way. I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U-shaped. That might be in the fourth quarter or the first quarter of next year.

In the short run we need monetary and fiscal stimulus to avoid another tipping point and to avoid deflation, but now this easy money has already started to create asset bubbles in equities, commodities, credit and emerging markets. For the sake of achieving growth stability again and avoiding deflation, we may be planting the seeds of the next cycle of financial instability.

Nouriel Roubini