Roubini : commodities rush not all due to demand but also to massive liquidity

Nouriel Roubini : ....Possibly. To me it looks like some of it is not due to demand but liquidity chasing commodity. It is one of my major concerns right now: We decided to save the global economy by flooding the world with a massive amount of liquidity. Now we risk making the same mistake as during the last cycle....
in www.spiegel.de

Nouriel Roubini on the Coming Commodities Correction

Nouriel Roubini on the Coming Commodities Correction

by: Hard Assets Investor

March 25, 2010

From crude to copper, from gold to silver, most commodities have been on a tear lately—but is the rise too much, too fast?

So says Dr. Nouriel Roubini, professor of economics at New York University's Stern School of Business and chairman of the RGE Monitor. Best known for his accurate predictions of the current financial crisis back in 2005, Dr. Roubini now argues that the world has set itself up for another bubble in risky assets, like commodities—and when the bubble pops, it won't be pretty.

HAI Associate Editor Lara Crigger caught up with Dr. Roubini at the "Inside Commodities" conference on Nov. 4, where he shared his thoughts on global commodities markets, including why we can't look to China to drive global growth, how $100 oil would tip us back into recession, and what will happen when the commodities bubble finally pops.
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Nouriel Roubini On The Coming Commodities Correction

Source Hardassetsinvestor.com: From crude to copper, from gold to silver, most commodities have been on a tear lately—but is the rise too much, too fast? So says Dr. Nouriel Roubini, professor of economics at New York University’s Stern School of Business and chairman of the RGE Monitor.
Best known for his accurate predictions of the current financial crisis back in 2005, Dr. Roubini now argues that the world has set itself up for another bubble in risky assets, like commodities—and when the bubble pops, it won’t be pretty……………………………
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Roubini Commodities and assets bubbles about to burst

Nouriel Roubini in an interview with HardassetsInvestor :"commodity prices have increased since the beginning of the year too much, too fast, when compared to the improvement in economic fundamentals. Some of that increase is justified. But if the global economy were to have a more anemic, subpar recovery—if instead of a V-shaped recovery, there's going to be a U-shaped recovery—then I actually think demand for commodities would be weak compared to supply, and there could be a correction in commodity prices in 2010.
Take oil prices: They have gone up from $30/barrel to over $80, at a time when demand is back to 2005 levels, and oil inventory is at all-time highs. Part of the increase is justified by fundamentals. But part of it is essentially this wall of liquidity chasing assets, and the effect of carry trade on the U.S. dollar, driving further higher these commodity prices.
So these nonfundamental factors can push oil and commodity prices higher, especially if there's going to be an increase in expected inflation. But the fundamentals of supply and demand actually suggest that, from now on, oil and other commodity prices should be lower, rather than higher."
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