One of the world's most prominent and successful investors George Soros has warned the World Economic Forum in Davos that the soaring gold price represents the 'ultimate asset bubble'.

Soros, whose successful macro calls have earned him a place among the mega-rich, has pointed to the rapidly rising gold price as the first major inflationary consequence of the masses of cheap liquidity pumped into the global economy by central banks the world over.

His central thesis is that this much liquidity creates a petrie dish in which asset bubbles can grow. He said: 'When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.'

Read 'the bull case for gold' and 'the bear case for gold' for more on the gold price.

In a wide reaching speech Soros also broadly endorsed President Barack Obama's plan to split commercial and investment banks as well as limiting proprietary trading. Yet he has warned that the plan will prove insufficient saying it does not go far enough but might in fact be coming too soon into the economic recovery.

Speaking to reporters he said: 'I am very supportive of it but I don't think it goes far enough...This development came too soon because the banks are not out of the woods.'

He believes governments should continue to boost the global economy with monetary stimuli, warning it would be too early to withdraw support even if it is triggering bubbles.

He said: 'I think actually there's plenty of room for countries like the US to increase the national debt but it's of course very undesirable. However, reducing it at the cost of bringing on a slowdown will be counterproductive. It's more a question of spending of the money wisely.'

He set out a world-view which argued that China should be encouraged to allow its currency to appreciate and said that the nation's plans to stem its own asset bubbles - particularly in property - are currently unproven.

He did however have some warming words for Greece. After its latest issue of government debt was issued at record yields, with investors fearing its mounting deficit, he argued that the price now might be right to buy the debt.

He told Reuters that Greece would do what it takes to retain its investment grade status.: 'I have been thinking about it actually, I think Greece will do whatever it takes because Greece can't afford to fall out. It has such benefits from being able to use the credit of the European Central Bank for repo so Greece will do what it needs to do.'