Jim Rogers on gold, dollar, commodities in 2009

Jim Rogers on gold, dollar, commodities in 2009

December 31, 2009 13:10:00 IST

NEW YORK : It is the time of the year, when you love to recollect what others said on things you like and dislike. And on commodities, what better voice to listen to than that of Jim Rogers, the global investing guru on commodities. Rogers' views on gold, silver, platinum, palladium, dollar, pound and agricultural commodities were the most resounding during the whole of 2009.

Rogers, chairman of Rogers Holdings, and a vocal critic of America and Britain, has been arguing all through 2009 that agricultural commodities are the best investment place to put your money.

His argument on agri commodities is that since farmers cannot get loans, they can not get their fertilizer. "No company is opening a new mine, leaving supply problems open to shortages," he said pointing out that commodities prices will naturally rebound in the next few years.

In 1998, Rogers launched the Rogers International Commodity Index, a composite, US dollar-based, total return index, designed to meet the need for consistent investing in a broad based international vehicle. The Index represents the value of a basket of commodities consumed in the global economy, ranging from agricultural to energy to metal products.

Rogers also blasted British pound saying: "The charm of United Kingdom is all over and it would be prudent if you sell all their currency (pound sterling) fast."

With his focus on agricultural commodities, Rogers has been saying that he has great hopes on China because China is an agricultural gaint. Rogers, author of such famous books like Hot Commodities and A Bull in China, recently launched an agricultural commodities index focused on food consumption in China.

Saying that China is a fascinating place to invest in, Rogers said China is on the rise, like America 100 years ago, and the problems the Asian giant is encountering right now in certain, mainly export-driven, sectors of its economy will not alter the country's long-term trajectory.

According to Rogers, three billion people living in Asia, most of them in India and China, will account for a major portion of the total demand for commodities in the coming years. Rogers, who has been putting money into agricultural commodities in China, also said he is ready to buy gold as and when prices drop. He says silver is a better buy than gold, and Rogers is buying silver also these days.

"Gold is the best investment these days. Gold is great investment because the metal's prices will go over $2000 per ounce in the next one decade, may be by 2019. I would surely buy gold when prices drop," Jim Rogers said.

Rogers has been speaking at several investment summits from New York to Singapore during 2009—where he is settled these days—arguing that gold prices are going up thanks to the debilitating value of the US dollar. He has consistently argued that US dollar is collapsing, and the death of US dollar has been thanks to the wrong policies by the Federal Reserve all these years.

Several bullion analysts have been warning over the last two weeks that gold price is in a bubble as the yellow metal crossed to touch a historic high of $1227 early December. But Jim Rogers feels that gold is not a bubble that will burst and therefore he is not selling the yellow metal he owns even though gold prices have shot up by an incredible $540 per ounce in the last one year.

Here is the Jim Rogers take on gold and other commodities in 2009:

"If you want to buy precious metal, I'd rather buy silver or palladium. Both are very depressed. I continue to be more optimistic about agriculture than some other commodities."

"Well, I own gold and I have for a while. How high can it go? I fully expect it to be over a couple thousand dollars an ounce sometime in the next decade—I didn't say the next month, I didn't say the next year, I said the next decade—because paper money around the world is very suspect. But right now everybody's bullish on it, so I don't like to buy things when that's happening. But I'm not selling under any circumstances."

"You have central banks, which five years ago were selling gold, now buying. So that's a huge shift in the marketplace. Central banks are like lots of other people—they just follow the crowd. There are probably better commodities to buy than gold, but you can't tell that to central banks because they've got gold on the brain. "

"A huge amount is about not just U.S. deficits, but all deficits. Deficits are going berserk nearly everywhere. Throughout history, printing money has led to weaker currencies and higher prices for real assets. And there are many, many pessimists about the dollar, including me. So many pessimists that I suspect there's a rally coming. I have no idea why there should be, but things do usually rally when you have this many bears at the same time. I've actually accumulated a few more dollars. I mean, it's not a significant position, but I do own more dollars than I did a month ago. And we'll probably also have a gold correction because there's so many bulls on gold."

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