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NEW YORK (MarketWatch) -- Markets, be they stocks, emerging markets or commodities, have rallied too far, too fast because the global economy will experience an anemic recovery rather than the hoped-for V-shaped recovery, New York University economist Nouriel Roubini said on Wednesday.

Roubini, who became famous for predicting the unraveling of the housing market and the credit crisis, said that the current "party" can continue for another six months.

But it will eventually end badly, he warned, as much of the rise in asset prices since March is yet another bubble created by a huge pool of global liquidity.

"I'd argue that rally has been too much, too fast. If we have a V-shaped recovery, then it's justified and assets can rise further. But I believe we'll have U-shaped recovery, in which case those assets could move sideways or they could correct," Roubini said in a presentation at the Inside Commodities conference held at the New York Stock Exchange.

As stocks tumbled through March and oil went from $145 all the way down to $30 a barrel, markets were pricing in an economic depression.

"That risk has now significantly been reduced by massive fiscal stimulus and easy monetary policies," he said.

But other risks are re-emerging, as easy policies have again fueled gains in commodities. Even as the credit crisis began unfolding, it was oil at $145 last year that proved to be the tipping point that pushed the global economy into recession, Roubini said.

Should oil prices continue to be fed by excess liquidity and speculation, oil at $100 could be as "a hammer on the head" of the nascent global recovery, he warned.

Exit strategies

Consumption, especially in the U.S., has remained anemic and the return to growth seen in the third quarter was mostly due to the government's stimulus measures, the NYU economist said.

Those measures can continue to boost growth through early next year. But unless consumption is suddenly revived to take the place of government spending, markets are facing a growing risk centered around the removal of accommodative monetary policies in the U.S. and around the world.

Exiting too quickly risks a double-dip recession "like we saw in Japan or in the U.S. in 1937," Roubini said. "If we take too long, it would risk creating a fiscal trainwreck and lift inflation."

In the meantime, the Federal Reserve is destabilizing global financial markets by feeding another massive asset bubble by keeping interest rates near zero.

The Fed kept rates near zero Wednesday after its two-day policy setting meeting.

Over the past year, the dollar has increasingly been at the center of a so-called carry trade.

With interest rates effectively at zero in the U.S., global investors seeking risks and higher returns are increasingly borrowing risk-free dollars to invest in higher-yielding currencies and assets, such as stocks, commodities, and emerging markets. These trades have kept putting pressure on the dollar as investors short the currency to invest elsewhere.

The big rally seen over the past year in stocks, commodities and other risky assets, are all the same trade, Roubini said. And it's been exacerbated not just by the Fed keeping rates near zero but also with the Fed buying Treasurys, keeping rates low not just at the short end but also at the long end, thereby reducing volatility.

"When it unravels, it's going to get ugly," Roubini said. "Everyone that's shorting dollars will try to get out of those positions at the same time, and we'd have a stampede."

The dollar will have to snap back eventually, the NYU economist said. The Fed will eventually stop buying Treasury debt, and the possibility of higher interest rates will boost both volatility and the dollar.

"If the market is right, and there is a V-shaped recovery, then the Fed raises interest rates and the dollar snaps back. Another risk is if markets fear a double dip [recession], then the dollar would strengthen sharply on safe haven demand."

"There are a good number of reasons that we could see a dollar snapback and a market crash," Roubini said.