“One of the key bubbles is fiat currency, and one clear anti-bubble in this system is gold,” he said, adding that other examples are volatility, correlations and inflation. “It’s a case of when, not if, they will reprice significantly higher,” he said.
Gold has rallied 19% this year and captivated some of the world’s most prominent investors this year, who argue that the rapid expansion of central bank balance sheets will reduce fiat currency values and drive demand for hard assets.
But whether inflation actually materializes is still up for debate. Current U.S. or European economic data doesn’t show evidence of price pressures, and investors have poured money into bonds this year. Parrilla says the long-term will prove otherwise.
“The bubbles are too big to fail and mommy and daddy will do whatever it takes to prevent this,” says Parrilla.
This article was provided by Bloomberg News.