DAVOS (Commodity Online): Noted global economist Nouriel Roubini says that there have been 'excessive increases' in gold and oil prices that is creating possible commodity bubbles.
Talking to reporters at the World Economic Forum at Davos, Switzerland, Roubini-a professor of economics at the New York University--said that there is an urgent need to curb the excessive rise in prices in commodities.
Saying that several asset bubbles have sprung up in the last few months across the world, Roubini said that the global economy may be on a path to recovery, but it is at the same time saddled with shocks and great risks.
He said investors are taking money from banks with low interests and betting in uncertain markets including stocks and commodities. The fact is that several asset bubbles are being formed around the world, and the governments around the world need to be cautious and need to take action, the noted professor pointed out.
He said: There is a wall of liquidity chasing assets and some of those assets are oil, energy, food and gold.
Roubini said while big rise in gold and oil prices have been supported by a gradual improvement in the global economy, some of the increases have been excessive.
Oil has gone from $30 a barrel to $80 a barrel at a time when demand is down to 2005 levels, and there's a huge inventory of oil, he said. Part of the increase in oil and commodity prices is a bubble.
Roubini has been predicting that gold price is in a bubble as there is is no fundamental reason for the historic high price of the yellow metal these days. Two months back, Roubini had blasted global commodities investor Jim Rogers for predicting that gold price would touch a high of $2,000 per ounce in the next decade.
Roubini says gold price ought to be around $1,000 or below per ounce these days.