George Soros warns gold is now the 'ultimate bubble'

Discussion in 'Economics' started by Debaser82, Jan 28, 2010.

  1. Gold is now "the ultimate bubble", billionaire investor George Soros has declared, sparking fears that prices for the precious metal may soon suffer a tumble.

    Mr Soros, arguably the most famous hedge fund manager in history, warned that with interest rates low around the world, policymakers were risking generating new bubbles which could cause crashes in the future. In comments delivered on the fringe of the World Economic Forum, Mr Soros said: "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."

    Gold prices last month reached a record level of just over $1,225 per ounce, having risen around 40pc last year. Investors are piling into the metal amid fears both of potential inflation and fading faith about the stability of previously-assumed safe assets such as government debt. However, the chairman of Barrick Gold, the world's biggest producer, Peter Munk, said he expected the metal's upward march to continue.

    Mr Soros added that by proposing imminent "exit strategies" from the unprecedented support handed out to troubled banks and consumers, governments around the world could be in danger of triggering a double-dip in the global economy. In comments which will reinforce Labour's plan to fight the next election on promises not to start raising taxes or cutting spending too soon, he said that it was still too early to slash budget deficits.

    He said: "I think that since the adjustment process to the recession is incomplete, there is a need for additional stimulus. Some countries, like the US and European countries, have plenty of room to increase their deficits. The political resistance to doing so increases the chances of a double dip in the economy in 2011 and after that."

    The Conservatives have pledged to start cutting public spending almost immediately after this year's election, but their promise was weakened earlier this week by an International Monetary Fund report warning that it may still be too early to begin this process. Mr Soros also came out in favour of Barack Obama's plan to split up large US banks, but said that proposals to tax the banking system could also endanger the recovery.

    Jeez, From Goldman Sachs, to Credit Suisse to Soros...

    All of them are screaming gold is a huge sell.
  2. These journalists should take a reading comprehension course. Where does Soros say he expects gold to tumble overnight?
  3. Doesnt the use of the word bubble implies a disconnect with today's value, and where it should be valued, in the eye of the beholder?
  4. mikasa


    did it ever occur to you little people on internet that Soros wants an opportunity TO BUY THE DIP


    I don't suppose that occurred to any of you "traders" here :p
  5. I think (just my 2 cents) what Soros is talking about is that low/negative interest rates can serve as a catalyst for bubbles, with gold being a potential target. The way I understand it Soros didn't say Gold has to crash tomorrow. He said it may attract more and more hot money, making it the "ultimate bubble". Actually, the more I think about it Soros may actually be bullish on gold.
  6. Funny thing is, GLD is one of the largest positions of the Quantum Fund.

  7. lmao
  8. And then there's Glenn Beck, who urges you to consult with god and then make the appropriate gold purchases...
  9. rew


    I assume Soros is talking his book. I wonder how big his short position is?
  10. The movie "Stock Shock" should be seen for a real education on Wall Street and hedge funds. What a difference an hour or so makes!!! Yikes! DVD is cheaper at but it can be rented or bought pretty much anywhere.:eek:
    #10     Jan 28, 2010