Earlier today Jim Rogers took a stab at Roubini saying that the NYU professor is wrong "about the threat of bubbles in gold and emerging-market stocks." In addition to claiming that commodities are still down and the equity markets are firing on all cylinders, Rogers added that the price of gold will double to $2,000 an ounce in the next decade. As a reminder, lately Roubini has been warning about the threats of the biggest every carry trade being established: that of shorting the dollar. Rogers seems to disagree: “What bubble?” Rogers said, w,hen asked if he agreed with Roubini’s view. “It’s clear Mr. Roubini hasn’t done his homework, yet again.”
Never one to back down from a public confrontation Roubini retorted promptly at today's Inside Commodities Conference in New York. Roubini claimed Rogers' $2,000/ounce forecast is "utter nonsense." As Bloomberg reports:
There is no inflation or “near-depression” to drive gold prices that high, Roubini said today at the Inside Commodities Conference in New York. If a severe depression came to pass, with investors buying canned goods and hiding out in log cabins, “maybe you want some gold in that scenario,” Roubini said.
“Maybe it will reach $1,100 or so but $1,500 or $2,000 is nonsense,” Roubini said. Gold rose to a record $1,096.20 today on the New York Mercantile Exchange’s Comex division on speculation that central banks and investors will purchase the metal to hedge against a declining dollar.
Roubini shared some additional insights into what he believes are bubble markets:
In his New York speech, Roubini repeated his assertion that asset prices have risen “too much, too soon, too fast.” He’s a New York University professor and chairman of New York research and advisory firm Roubini Global Economics.
“It is very hard to justify oil going from $30 to above $80 based only on the fundamentals of supply and demand,” Roubini said. Prices are “in part” a bubble, he said.
Position limits on oil trading, if they helped reduce volatility, may be “beneficial” because the swings in oil prices have been “destructive” to the global economy, Roubini said.
Ah, the good old days, when pundits only quarreled about whether or not subprime was contained (with the consistent chiming in of the Soothsayers of the Fed that not only had they not created a housing or credit bubble, but that everything is under control - just consider the following absolutely moronic quote from the fossil that destroyed capitalism: "Indeed, recent research within the Federal Reserve suggests that many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade, though this would not have been the case, of course, had interest rates trended sharply upward.... American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. To the degree that households are driven by fears of payment shocks but are willing to manage their own interest rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home." - Alan Greenspan, 2004). Now that the goldbug camp has such vocal and publicity eager (pr)opponents as Roubini, Rogers and Rosie, expect speculation on gold speculation to reach unprecedented levels.