Monday, September 13, 2010

Roubini : the dollar, the yen, and the Swiss franc better investments than Gold

At a recent conference on the shores of Como Lake in Italy Nouriel Roubini told the European economic leaders that the “US has run out of bullets.” and that More quantitative easing (treasury bond purchases) by the FED is not going to make any difference . Roubini explained that in the case of a double dip recession, he believes that the dollar, the yen, and the Swiss franc may be better investments than gold because the currencies are more liquid than the gold market.... Gold will be one of the preferred safe haven investments if the economy slips back into recession , "But in that situation, things like the dollar, the yen, the Swiss franc have more upside in a situation of rising risk aversion because they are much more liquid than the gold market", Roubini said.. Roubini believes that the price of Gold will rather stay at the current levels : "I believe that gold is going to trade around current level. There are two extreme events that lead to a spike in gold. One is inflation, but we have no inflation in advanced economies. If anything, there is a risk of deflation. The other event in which gold prices go up is the risk of a global financial meltdown, and that tail risk has been reduced because we backstopped the financial system." He explained

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