Euphoria Over Recovery Likely Overstated: Stephen Roach

The U.S. is going through a weak economic recovery, and that concerns Yale senior fellow Stephen Roach, he told CNBC Monday.

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Despite his concerns, however, he defended the U.S. economy when faced with the views of presidential contender, and CNBC's "Squawk Box"guest co-host, GOP presidential candidate Rep. Ron Paulof Texas.

"The data flow is mixed," said Roach, the former non-executive chairman of Morgan Stanley Asia. "Most disappointing in the United States is it looks like a lot of the hiring we were so enthusiastic about late last year was weather-related...The bloom is off the rose."

He ticked off a litany of disappointing data: elevated jobless claims, weak housing indicators, weak underlying retail sales numbers, Europe in a third-straight quarter of recession, and slowing growth in China.

"So all this euphoria about a resumption of rapid global growth was probably an overstatement," he said.

What the U.S. needs is the kind of "disciplined, tough monetary policy" that took place under former Federal Reserve chief Paul Volcker, Roach said.

He disputed Paul's contention that the U.S. should return to the gold standard because, Paul said, consumers have lost 97 percent of their purchasing power using the paper dollar. Paul also wants to eliminate the Fed, to which Roach responded, "We just need policy, discipline, and an independent Fed, not a Fed that is eliminated."

"The American economy has done darn well," Roach told the presidential candidate. "We’re having problems right now, there’s no question about it. We went through a horrific crisis…and you’re correct in pointing out…irresponsible monetary policy in the years leading up to the subprime crisis. But to be on television and tell the American public they’ve lost 97 percent of the purchasing power of their currency is, I think, really irresponsible."