The BI-ME eNewsletter
LOGIN:
'I don't believe in gold,' says Nouriel Roubini
Source: BI-ME , Author: BI-ME staff
Posted: Sat October 24, 2009 11:02 am
www alibaba.com
Meet worldwide manufacturers, wholesalers
& importers
in Alibaba now!

INTERNATIONAL. Nouriel Roubini, a professor at the Stern Business School at New York University and chairman of Roubini Global Economics (RGE), who predicted the current financial crisis two years ago, said gold can only go up on inflation or another depression.

Speaking in an interview with Dave Nadig of Index Universe (IU.com) Roubini said: "My view is to stay away from risky assets. Stay in liquid assets".

Roubini said asset prices have gone up as a result of liquidity in the system, however he sees a correction looming.

" I don’t know when the correction is going to occur, it could be a while longer, but eventually it will be a pretty ugly correction, across many different asset classes," he said.

Answering a question on gold, Roubini said: "I don’t believe in gold".

Explaining his reasoning, he  added: "Gold can go up for only two reasons. [One is] inflation, and we are in a world where there are massive amounts of deflation because of a glut of capacity. So there’s no inflation, and there’s not going to be for the time being".

"The only other case in which gold can go higher with deflation is if you have Armageddon, if you have another depression".

"So all the gold bugs who say gold is going to go to US$1,500, US$2,000, they’re just speaking nonsense," Roubini said.

"Without inflation, or without a depression, there’s nowhere for gold to go," adding  maybe it could happen in three or four years from now.

"But not anytime soon," he said.

Roubini has been expressing concerns for some time that the current price of gold looks overextended as deflation is likely to outweigh any risks of inflation in the near term.

For the next two years, deflationary pressure is going to be dominant, and it is going to become a time bomb down the line if and when we keep monetizing large deficits," he said.

"Unless we have high inflation, or...other risks like depression, gold looks toppy," he told a Reuters Investment Outlook Summit in June.

RELATED ARTICLES

Rising gold signals fear of default rather than worries about future inflation, says Roubini

Gold, oil 'over extended' on deflationary risks, says Roubini

Global recession may last until end 2010, says Roubini

Roubini sees big risk of double-dip recession on exit strategies from monetary easing

US Dollar crash possible, says Roubini

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: July 31, 2010
INTERNATIONAL. Peter Grauer, the Chairman and CEO of Bloomberg, is a man with a mantra and he repeats it every chance he gets: "We have an aspiration at Bloomberg to become the most influential news organisation in the world."
date:Posted: July 31, 2010
LEBANON. Half of TMT organizations find inadequate budgets to be biggest barrier to keeping information secure as cyber crime, piracy and fraud become growing global reality.
date:Posted: July 31, 2010
INTERNATIONAL. If the DJIA where to fall by more than 20% from the present level there would be further massive fiscal and monetary stimulus packages, not just in the US but worldwide.