Nouriel Roubini Predicts Gold Bubble Will Burst

Low interest rates, over-sized leverage and increased deficit spending have all contributed to the continued rise of gold prices. Still, some experts believe that the current gold bubble will collapse as the global economy starts to slowly recover, and the US dollar comes back into favor. For more on this, see the following article fromBullion Vault


Nouriel Roubini was "one of the few to predict the financial crisis" reckons the Financial Times. Yet plenty of other chicken littles, amateur and professional, had long warned of trouble ahead, too.

Hence the 150% rise in Gold even before the crisis broke in August 2007. Set against negative real interest rates, unfettered bank leverage and runaway deficit spending, gold's rare physical persistence looked a fair bet. And absent Armageddon or double-digit inflation, a growing handful of people chose to store a chunk of their change in metal, starting around 2001.
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Stock up in Guns and Canned Food not Gold Roubini advice

Nouriel Roubini warns about the New Gold Bubble . Gold has no intrinsic value he says

Nouriel Roubini wrote his clients earlier this month: "If you truly fear a global economic meltdown, you should stock up on guns, canned food and other commodities you can actually use in your log cabin."
Nouriel Roubini, economics professor at New York University and one of the few experts to warn about the epic U.S. housing bubble and its consequences when there was still time for central bankers to safely deflate it, this month warns about "the new bubble in the barbarous relic that is gold."

Reminding clients of his financial advisory service that gold "has no intrinsic value," Roubini finds no fundamental justification for gold's rise "with no near-term risk of inflation or depression."

Early this month, Hu Xiaolian, a vice-governor of the People's Bank of China, was asked if the central bank would be replacing more of its greenbacks with gold after a gold purchase earlier this year. He said that was unlikely given that the bank now worries about the emergence of a gold bubble.
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