Be afraid. Be very afraid.

Great galloping ZOT! Did you read Stephen Mihm’s article in last Sunday’s New York Times Magazine about Nouriel Roubini, the guy who predicted the housing meltdown, the fuel price shock, the decline of consumer confidence, and a recession? They laughed when he sat down at the piano…but few are scoffing now.

Roubini, who is pictured looking very worried, glancing skyward as though he were expecting an asteroid at any moment, has more to say about the future of the US and world economies. A “permabear” who considers himself a realist, he has been predicting for months that the current recession will be the worst since the Great Depression. And speaking of the national debt, as we were quite recently, Roubini has said that foreign investors will stop financing the U.S. national deficit and abandon the dollar, quite possibly leading to the demise of the American empire. As Mihm explains:

For months Roubini has been arguing that the true cost of the housing crisis will not be a mere $300 billion — the amount allowed for by the housing legislation spons0red by RepresentativeBarney Frankand SenatorChristopher Dodd— but something between a trillion and a trillion and a half dollars. But most important, in Roubini’s opinion, is to realize that the problem is deeper than the housing crisis. “Reckless people have deluded themselves that this was a subprime crisis,” he told me. “But we have problems with credit-card debt, student-loan debt, auto loans, commercial real estate loans, home-equity loans, corporate debt and loans that financed leveraged buyouts.” All of these forms of debt, he argues, suffer from some or all of the same traits that first surfaced in the housing market: shoddy underwriting, securitization, negligence on the part of the credit-rating agencies and lax government oversight. “We have a subprime financial system,” he said, “not a subprime mortgage market.”

Roubini argues that most of the losses from this bad debt have yet to be written off, and the toll from bad commercial real estate loans alone may help send hundreds of local banks into the arms of theFederal Deposit Insurance Corporation. “A good third of the regional banks won’t make it,” he predicted. In turn, these bailouts will add hundreds of billions of dollars to an already gargantuan federal debt, and someone, somewhere, is going to have to finance that debt, along with all the other debt accumulated by consumers and corporations. “Our biggest financiers are China, Russia and the gulf states,” Roubini noted. “These are rivals, not allies.”

Some argue that this view is unduly negative, and that Roubini’s apparent prescience about the present turn of events is coincidence: “Even a stopped clock is right twice a day,” says economist Anirvan Banerji in a stunningly unoriginal turn of phrase that inspires little confidence in the thinking behind it. And Roubini himself does not diet exclusively on gloom and doom: he’s been predicting, with the rest, that oil will drop below $100 a barrel and supports the government’s strategy to bail out overextended lenders. He believes that whenever the current mess is cleaned up, the economic outlook will improve.

Nevertheless, when you consider that we have made our country dependent on sovereignties that are not our friends, you have to allow: the guy has got something there.

Check out Roubini’s blog, where the man speaks eloquently for himself.