Roubini wrong on bubbles: Rogers

Many commodities are still down from record highs and equity markets aren't on the brink of collapse, Rogers, chairman of Singapore-based Rogers Holdings, said in an interview on Bloomberg Television Wednesday. The price of gold will double to at least US$2,000 an ounce in the next decade, he said.

Roubini, the New York University professor who warned in 2006 about the coming financial crisis, said on Oct. 27 that investors are borrowing dollars to buy assets and creating “huge” asset bubbles. Rogers said that he's not buying stocks now, though he may buy more gold. “What bubble?” Rogers said, when asked if he agreed with Roubini's view. “It's clear Mr. Roubini hasn't done his homework, yet again.”

Roubini told a conference in South Africa last month that investors were doing “the mother of all carry trades” by buying assets with borrowed dollars. He said emerging-market equities are showing a bubble, that gains in some developing- nation currencies are becoming “excessive” and that the rally in oil is “not justified by the fundamentals.”

The MSCI Emerging Markets Index has gained 62 percent this year and crude oil has risen 47 percent.

Rogers countered Roubini's arguments by saying that Chinese stocks and sugar, silver, coffee and cotton have all dropped from their historical highs by at least 50 percent.

When asked if gains made this year pointed to a bubble, he said: “It's not a bubble if something is up 100 percent this year, but down 70 percent from its high. That's not a bubble, that's a good year. That's a great year. Maybe it's too high for this year, but that's not a bubble.”

Gold climbed to a record US$1,095.40 an ounce in London Wednesday, a 24 percent gain this year. Gold also reached a record in New York as the dollar fell and India's central bank added to its bullion reserves.

Rogers agreed with Roubini that the dollar's decline was encouraging investors to buy more commodities and assets. The U.S. currency has dropped 13 percent since the start of March against a trade-weighted basket of currencies.

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