I just posted on the blog a post about the story I heard about Gold.
http://blog.thelordoftrading.com/2009/10/long-time-weve-not-spoken-about-gold.html

It could have profound implications on the commos, the USD and on the whole Economy.

"and this kind of situation shows why derivatives are weapons of
financial destruction," ... haha nice quote. So you are saying the
deriviatives markets is the next bubble. And you site possible demand
bubbles coming from emerging asia? And you think that supply will not
be able to meet depend and thus gold will be in the 2000＋ range. ... so
what are the implications for the USD and equties?

and who are the ones who are creating this bubble? central banks? bankers? asian demanders? or at least most specifically who do you think will be the biggest contributor to the bubble?

First, to me derivatives are definitely what will lead us to the financial armageddon and the actual bubble that has not burst yet, cf this post where i discuss this: http://blog.thelordoftrading.com/2009/06/dealing-with-16-digit-dollar-exposure.html

The Bubble is created and fed by the OTC derivatives dealers and makers: mostly the US banks. That's similar to what happened with Credit Derivatives and CDOs: that's a volume business, the more you sell, the more you make money, so you sell what you don't have and what doesn't exist: that's pure leverage. Here the story shows that JP and DB sold gold no one has and this kind of methods works when all the participants play the "game". But China, the main player in several metals and commodities markets, announced in August that they wouldn't play anymore that and may default on their OTC agreements. A default on their losses would be the direct loss of their OTC counterparts : mostly the US banks

It looks like China is to create artificially a drought of the gold, silver and the commodities markets : roughly they are to massively exchange USD (they have plenty of them, purchased to maintain their currency weak) against the physical commodities. The implications would be obvious : Gold, silver and commodities will skyrocket while the USD will sank and become worthless.
Doing so:
- they will get rid of their USD as it seems the USD is doomed and its weakness is supported by the US gov itself (notably to inflate its debt out)
- they will be the main owner of commodities (they are already the main producer of most of them)
- they will get rid of the derivatives exposure and will avoid the financial armageddon when it comes letting it for the West...

I've seen less smart moves...

Your Idea is kinda inline with a thesis Roubini was talking about on squawk box( "IF" his V shape recovery forecast is trumped by a reversion to poor economic fundamentals). Wait wait, before you rag on me saying Why the heck was Snapman watching CNBC?, in all fairness this was a video linked on the right winger blog "the big picture," but aside from this point, Roubini was talking about people using the dollar for carry trade investments currently (though not necessary the currency realm ... yet). As some fund managers are saying (check out research in the crypt - good stuff), the dollar is now favored as a funding currency. More over, Even without a financial Armageddon the possibility of dollar depreciation and deflation still remains high (according to roubini). As I have said before, we know rates are not gonna budge with CPI and PPI numbers so low along with sub par housing data... A derivative financial disaster would just seal the deal.

Jim Sinclair's thoughts on China invoking a Stop Loss on OTC derivatives
http://jsmineset.com/2009/08/31/china-invokes-a-stop-loss-on-otc-derivatives/

A few bits :
The Chinese are doing exactly the right thing and exactly what the West should have done years ago when long term capital flopped.
Now the rest of the BRIC nations will follow suit.
China’s actions here are another reason why China is headed for the largest economy on the planet.
While the West enriches the creators of this disaster, China herein tells them, to go straight to hell, and that they will not get their money to enrich themselves more. China has invoked a "Stop Loss."

Scary Stuff. I'd like to know why the plan to regulate these OTC products has fallen through. If I'm not mistaken Citadel and CME were set to launch the largest clearing house of these products but backed out due to lack of support in the financial community. It bothers me that Wall street was on the brink of collapse and fails to reform.