Zoho's Sridhar Vembu says 'gold is also flashing a big warning signal' amid yellow metal prices rising to new highs

Zoho founder Sridhar Vembu on Saturday joined a growing number of voices expressing concern about the stability of global financial markets, saying gold was also a big warning sign. In an X post, the Chennai-based software company founder said he agreed with former IMF chief economist Gita Gopinath’s recent analysis of the US markets in The Economist. What is Vembu’s assessment of the situation? “The US stock market is in a clear and massive bubble. The degree of leverage in the system means we cannot rule out a systemic event like the global financial crisis of 2008-9,” Vembu said in a post. The global financial crisis of 2008 was a severe economic downturn caused by the collapse of the US housing market, which was caused by the widespread issuance of risky “subprime mortgages.” Noting that gold also flashes a big warning signal, Vembu added: “I don’t think of gold as an investment, I think of it as insurance against systemic financial risk. Ultimately, finance is about trust and when debt levels reach this high, trust breaks down.” “I am sure AI will work hard to repay all the debts in the system,” the Zoho founder added. What was Gita Gopinath’s analysis of the situation? Gopinath wrote in The Economist that the US stock market, fueled by “enthusiasm around artificial intelligence”, has been hovering near an all-time high for some time. This comes despite volatility in the markets caused by renewed trade tensions following President Donald Trump’s series of tariffs on key trading partners, with the most recent being China. This trend has drawn comparisons to the late 1990s tech boom that ended with the dotcom crash in 2000, the former chief economist of the International Monetary Fund (IMF) wrote in the article. Meanwhile, traditional safe haven asset gold price touched a record high of ₹1,32,294 per 10 grams on Friday, 17 October. This development comes amid strong demand for the precious metal ahead of the festive season. Netizens react to the post Several other X users commented on his post, with most sharing their own views on the subject. One user said: “The US debt spiral and inflated stock valuations after the Fed’s massive liquidity injections have distorted fundamentals. The bubble looks bigger than ever, just waiting for a trigger.” Another user called out Vembu for issuing other such warnings regarding the financial markets, which read: “you cry wolf every year.” Responding to the post, Vembu said “All an engineer can do is point out that the building is structurally unsound. No one can predict when it will collapse.” Meanwhile, an X-user also highlighted an opportunity for companies during times of economic turmoil, saying: “Big opportunity for you and other companies willing to grow market share. When bubble bursts, economic recession means most companies will actively look for cheaper alternatives to services provided by MS, AWS, Oracle, etc.”