I am most perplexed about this alleged bubble which is out there.
Rogers told Wall Street Cheat Sheet.Rogers has been bullish on gold and other commodities for the long term, often arguing that the weakening U.S. dollar will make commodities a better investment, pushing gold toward $2,000 an ounce, hundreds of dollars higher than where it is now.
Roubini, on the other hand, says investors are borrowing dollars to buy emerging market stocks and commodities, which is inflating the value of those assets.
Now, the beauty of debates like this is that while all sides have mammoth intellect they are ultimately worthless. Only time will tell whether or not there is a bubble. Both men will emerge wealthier whether they're right or not.
Roubini has earned a lifetime's worth of a reputation for predicting this crisis. He could get everything wrong moving forward and still make millions speaking and teaching. Rogers has already made his money.
For me, I'm perplexed by two things. This isn't the first criticism of Roubini's theory. Most simply dismiss Roubini's theory without giving much explanation for why. It's true that we may still be years away from the bubble popping. There's plenty of money to be made until then, presumably. Roubini's theory is based on a simple logic. Our fiscal and monetary policy is weakening our currency. Investors are using that weak currency to invest in assets they otherwise would not. That is forming a bubble. That's the theory.
We'll see if he's right but so far no one has challenged the theory. For my money, I don't know if Roubini himself is right but I do know that our policies are forming a bubble somewhere.