Nouriel Roubini told CNBC Monday, that asset prices have been inflated by the cheap funds but the greenback won’t keep falling forever. When the deterioration stops and when the currency’s course is reversed, there could be “a market crash all over the world,” he said. But this will not happen too soon, according to Roubini, as the real economy is still fragile and the Fed is likely to keep interest rates close to zero % for longer.
Roubini also said that there is a wall of liquidity — not just in the U.S. but also around the world — that is chasing assets ; “it’s equities, it’s commodities, it’s credit, gold, it’s emerging markets asset classes ,” Roubini told Squawk Box. “Now we are in the mother of all carry trades…The reality is that the dollar is the funding currency of the carry trades. Because of that the dollar weakness is going to continue for a while,” he added.
Talking about gold Roubini said the price of the precious metal may continue rising but it is not likely to hit $1,500 as gold bulls predict.
