Two of the global economy's highest-profile bears found themselves on opposing sides of the fence Wednesday in a heated public exchange.
New York University economist Nouriel Roubini—"Dr. Doom" on Wall Street—and Peter Schiff, the head of Euro Pacific Capital and longtime critic of inflationary central bank policy, squared off during the opening day of SkyBridge Capital's SALT 2014 conference.
Primarily at issue was Schiff's ongoing prediction that Federal Reserve monetary easing is pushing the U.S. economy into hyperinflation, and a corresponding argument that the central bank shouldn't resist deflation because it helps consumers.
"Falling prices do not threaten consumers," he said. "Consumers benefit from falling prices."
"What you're saying about deflation is nonsense," Roubini told Schiff as the two sat next to each in front of thousands of hedge fund managers and investment pros.
"I totally disagree with Peter. His arguments about deflation are nonsense," Roubini continued. "We had deflation with the Great Depression…We had 20 years of deflation in Japan where there was no economic growth."
Roubini's rejoinder drew a strong round of applause, but Schiff had his supporters, too.
The two took over most of the discussion as the panel progressed, continuing to argue even after their microphones had been turned off.
Earlier in the panel discussion, Schiff issued some well-received comments about the negative effects the Fed's quantitative easing program—buying bonds with money it creates—and zero short-term interest rates have caused.
"All the Federal Reserve has succeeded in doing is reflating a bubble. Of course, the temporary wealth effects associated with these inflated asset prices have benefited a small portion of the population at the expense of the larger economy," he said.
"The majority of Americans are experiencing the much more negative consequences of quantitative easing. They're seeing a decline in their standard of living and a rise in their cost of living.
Schiff spoke the same day as a new government report showed producer prices swelling at the fastest pace since September 2012. Food prices also have been surging lately.
However, other inflation indicators have been within the range the Fed is watching before it will consider raising rates.
Although disagreeing with Schiff's inflation-deflation argument, Roubini cited potential mistakes in Fed policy as one of at least six significant risks to the global economy.
The others are: Persistently lower growth in China that the market has not acknowledged; the risk of "secular stagnation" in developed economies; financial crises in emerging market countries such as Indonesia, Turkey, Brazil, South Africa, Ukraine, Russia, Hungary, Argentina, Venezuela and Thailand; a new Cold War between Russia and the West; and simmering tensions between China and Japan.
Those are competing against six bright spots: The risk of a euro zone debt crisis has been reduced; the debt ceiling fight in the U.S. has been resolved; aggressive easing in Japan has pushed risk of a recession into the future; deflationary risks are lower; tensions between Israel and Iran have been defused, and geopolitical unrest has not derailed growth in countries such as Pakistan.
"Usually they call me 'Dr. Doom,' but next to Peter I am not Dr. Doom," Roubini said. "There are some risks in the global economy that are actually receding. There are other risks that are rising. You have to look at the balance of the two."
—By CNBC's Jeff Cox.