From Facebook –

Nouriel Roubini: if you want protection against inflation risk stock up on Spam that you can at least eat rather than Gold that has no intrinsic value or use

For the full story, see roubini.com (if you have access) – Roubini is launching his rechristening of the RGE Monitor with a bang, by proclaiming gold a “barbarous relic,” and suggesting we all buy spam instead. Essentially, he uses the recent volatility in the gold price to theorize that it’s blowing a massive bubble:

Investors should thus be wary of getting the gold bug and being stuck with this barbarous relic. The recent swings in gold price—up 10 percent one month, down 10 percent the next—prove the point that gold has little intrinsic value and that most of its price movements are based on beliefs and bubbles. As an insurance policy against the tail risk of eventual inflation, it may be useful to hold a small amount of gold in one’s portfolio, but stocking up portfolios with a fiat currency that has marginal practical use, a zero nominal interest rate, high storage costs, and the price of which is subject to volatile whims and bubbles is totally irrational. If you want to hedge against inflation, stock up on Spam or other canned food or buy futures on commodities that have more physical uses and consumer demand.

We want to agree because we want to stay Facebook friends with Nouriel. Otherwise, we want to disagree, for a multitude of reasons: these include the growth of the Federal Reserve’s balance sheet just not looking like a good thing for fiat moneys in general, the fact that the Fed and Treasury are totally in uncharted waters and that it’s difficult to insure your portfolio against uncertainty, and the fact that we don’t own any stock in $HRL (Hormel), so we’ve got no reason to be bullish on their meat in a tin. But I’m basically gonna leave the argument against to Zero Hedge, because they did it quite well.