Global equities are “vulnerable to correction” after rallying from their March lows and as governments around the world withdraw stimulus measures, says investor Jim Rogers.

“We’re overdue for a correction” Rogers says.

“Stock markets around the world have been going up for the past 10 months,” he told Bloomberg.

Also, Rogers says central banks need to tighten the money supply further.

“I don’t think anybody has tightened enough. I think everybody should tighten more,” he notes.

“We have huge amounts of money printed throughout the world. It’s going to cause currency instability. It’s going to cause more inflation. It’s going to cause higher interest rates.”

The Congressional Budget Office has called the U.S. budget outlook “bleak,” in a forecast that hurts the chances for extending Bush-era tax cuts and raises pressure for fiscal belt-tightening, The Wall Street Journal reports.

In its annual report, the nonpartisan CBO pegged the 2010 U.S. budget deficit at $1.35 trillion, a slight decrease from the $1.4 trillion 2009 deficit that set a post-World War II record.

The CBO said the government will run an aggregate deficit of about $6 trillion during the next decade, a level that many economists worry could lead to currency shock, inflation, crippling interest rates or other economic maladies.

By the end of 2020, “debt is projected to climb to $15 trillion, or 67 percent of gross domestic product,” CBO director Doug Elmendorf said on his blog post.

“With such a large increase in debt…interest payments on the debt are poised to skyrocket.”
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