Cheap money. Most of the problems the global financial markets are staring at currently can be traced back to these two words. Rock-bottom interest rates are pushing yield-hungry investors away from safe havens. While most Indians are sticking to gold, high risk investors in the West are seeking extraordinary returns. Hence safe haven assets like US Treasuries no longer elicit interest. The ready availability of cheap money is pushing up the prices of companies that private-equity firms might want to buy. Further as per Economist, even the valuations of such high risk buyouts are touching new highs. The PE valuations that investors are willing to pay were last seen in the pre-subprime crisis period. This buoyancy in valuations should in fact be a signal of caution for private equity firms. They should in fact refrain from buying risky businesses at expensive valuations. However, there is a human tendency to not learn from past mistakes. And we will not be surprised if the private equity funds once again become the first victims of the US stock market bubble burst.