Nothing like a public spat between two respected pundits to get the controversy brewing. This time we have Quantum Fund Co-founder Jim Rogers (my choice) vs. the largely academic Nouriel Roubini. Roubini is on record calling the recent ascent of gold prices a bubble and referred to the asset as a “barbarous relic“, while Jim Rogers calls for gold to cross $2,000 / ounce within the next decade. The two have gone back and forth a few times and yesterday Jim Rogers shot back in an interview with the Wall Street Cheat Sheet.
Damien Hoffman: Jim, you were in the media a few times last week and I want to follow up on a few points you made. You said on Bloomberg that Nouriel Roubini did not do his homework regarding the asset bubbles about which he is now warning. Can you explain what homework he did not do?
Jim: All of it. How can you talk about a bubble when assets such as silver are 70% below their all-time high? Same for coffee, sugar, cotton, natural gas, and many more. I have a problem talking about a bubble when assets are this depressed from their all-time highs.
A bubble is when assets are screaming to new highs everyday, everyone is talking about them, and everyone owns them. Right now, virtually no one owns commodities. So for Mr. Roubini to talk about a bubble in commodities defies comprehension. It proves he does not understand markets.
I am flabbergasted at Mr. Roubini’s comment about bubbles because there is not a single market in the world making all-time highs except Gold, US Government Bonds, Cocoa, and the Sri Lankan stock market. That’s hardly reason to call for a bubble. So, I am most perplexed about this alleged bubble which is out there.
If an asset rises 100% in one year, that’s a great year, but not necessarily a bubble. Look at oil. It’s up huge off the bottom but nowhere near it’s old highs. Look at Citigroup. The stock is up 3 or so times off the bottom ….
Read the full interview here at Wall Street Cheat Sheet.
Related posts:
- Victor Sperandeo on the Price of Gold
- Jim Rogers Commodities Update
- Jim Rogers – Short Emerging Markets
Money Game (TBI)