George Soros warns gold is now the 'ultimate bubble'

That's the title of a Telegraph Online report of Soros' remarks at the Davos conference:

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."

He also has something to say about the current stimulus programs, warning that more will be needed to avoid a double-dip recession.


It's always useful to assume that a hedge-fund manager is talking his/her book when commenting. Based upon my reading of the above remarks, despite he using the word "bubble," I believe that Soros is long gold. [He may be preparing for a long-gold trade; see here and go to "A Hunch".] His philosophy of "reflexivity" amounts to "ride the bubble" if one exists.


Update: Nouriel Roubin said much the same thing about gold (and oil) at Davos too - although I don't think he was talking his book.