http://www.businessweek.com/magazine/content/09_49/b4158011706814.htm
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QuoteI was on assignment in Singapore on Nov. 24 when gold hit an all-time high of $1,174 an ounce. That was fortuitous because Singapore is the home base of commodities guru Jim Rogers, creator of the Rogers International Commodities Index. Meantime, back in the U.S., reports were surfacing about growing discontent in the halls of Congress over the performance of Treasury Secretary Tim Geithner and the possibility he might be replaced by JPMorgan Chase (JPM) CEO Jamie Dimon. When I rang up Rogers, he was his usual low-key self, with quiet opinions about the future of gold prices, commodities to watch, and why Obama should dump Geithner.
MARIA BARTIROMO
Gold, as you know, hit an all-time high today, with the Russian central bank buying bullion. How high can gold go?
JIM ROGERS
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 decadeâ€"I didn't say the next month, I didn't say the next year, I said the next decadeâ€"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.
What's behind the runup? Has buying by the central banks changed the equation here? Or is this still a demand story?
Certainly a demand story because, as I said, everybody's printing so much money and people around the world are worried about that. But you also 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 peopleâ€"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.
How much of the runup is being driven by U.S. deficits and the weakening dollar?
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.
So you're looking at other commodities you think are better opportunities?
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.
As BusinessWeek reports this week, global investors are snapping up thousands of acres of farmland in Africa. Money from everywhereâ€"from Saudi Arabia to Wall Street-backed fundsâ€"is pouring in. Why the sudden focus on Africa?
The gigantic acreage in Africa has been underfarmed because there is not much infrastructure, not much machinery, not much expertise, not much fertilizer. I think the world is going to have huge food problems in the next few years. Other people seem to see that, too, so they're buying up farmland. You can either buy it or lease it. It's very, very cheap, it's incredibly fertile, and it hasn't been overexploited. And if you take in some expertise and some machinery and some fertilizer, you should make a lot of money. The labor's cheap, everything's cheap.
So you think Africa is a good investment opportunity?
I think it's a fantastic investor opportunity. Now there are over 50 countries in Africa, so we can't make too gross a generalization. But I mean, in the Congo, you don't even have to plant anything. You just sit by the road long enough, something will grow. Yes, I am very, very optimistic.
What's your outlook for commodities in 2010?
I'm not smart enough to know. But I will say that if the world economy gets better, then commodities will be one of the best places to be because of the shortages that are developing. If the world economy does not get better, commodities will still be the place to be because governments are printing all this money.
Tim Geithner has been under attack lately. How's he doing?
Listen, I have been a critic for years. Geithner should never have been appointed to anything. He's been wrong about just about everything for 15 years.
Do you think he'll lose his job?
Of course he's going to lose his job, because as Mr. Obama realizes that Geithner doesn't know what he's doing, he's going to look for somebody else because he doesn't want to take the heat himself. So he's going to look to blame somebody, and the obvious person is Geithner.
Nice words, this man knows his stuff.
Glad to see the big guys questioning Geithner as well.
When your cab driver tells you to buy gold, its time to get out of the market. This is growing into a very big bubble, and what happens to bubbles?
Quote from: mtraininjax on November 30, 2009, 12:00:40 AM
When your cab driver tells you to buy gold, its time to get out of the market. This is growing into a very big bubble, and what happens to bubbles?
they go BOOOOOM! :D
erm, wait, ok maybe I was exaggerating a
little.
Quote from: mtraininjax on November 30, 2009, 12:00:40 AM
When your cab driver tells you to buy gold, its time to get out of the market. This is growing into a very big bubble, and what happens to bubbles?
I agree with you mtrain. This is setting up to be another bubble. The first sign of this blowing up is when Joe Schmo starts saying it's a "can't lose investment".
It's not cab drivers buying gold, folks, it's the central banks of several countries. The cab drivers are going to hotels and SELLING gold. Also, gold isn't really an investment, it's an insurance policy. Hold on to the concept that gold does not change in value, paper currencies do.
Dog - The cab drivers, the everyday people who have "GOLD" parties, its nausiating with regard to what people are doing for gold to dollars. Remember, nothing lasts forever, and when commodities run up hard, they also fall hard. This run to metals cannot last, and when the economies come back, you will see it fall as well.
I think that the phrase "Gold has never been worth zero" is playing into consideration.
Those thinking that a global socio-economic collapse is not possible may be wise to watch these big players.
Could it be that governments see something we individuals do not?
I'm not too sure we are in a gold bubble quite yet. Gold is just tracking inversely to the dollar. With the US borrowing escalating dramatically (and most western governments doing the same), faith in the USD and other paper currency is decreasing. Currently carry-trade currencies of commodity-producing countries like Australia and Canada are continuing to appreciate, but all other currencies are in doubt.
Since there is no real alternative to the USD as a world reserve currency, the world is turning to precious metals as currency. This process has just started and I fully expect other central banks to start buying more gold. So I see no reason gold cannot appreciate cannot appreciate another 20% and hold its value for at the least the next year or so.
If the US gets its deficit back into check and the economy shows some more sustained growth, then I think we could see gold values adjust back down.
For the short to medium term, barring any more global shocks (like Dubai), then I fully expect to see less dollar repatriation, more money in emerging markets and more banks using precious metals as their temporary currency back-up.
So let me get this right,there are bunch of companies on TV advertising selling gold....for DOLLARS.
They will gladly take your DOLLARS and sell you gold.
If gold is that precious why they dont keep it,why are they selling gold for dollars?
Because the real money is in buying and selling. Gold, real estate, stocks, bonds, or whatever is the "investment" of the week. The profit chase will always be with us. Paper money really is only paper.
Well if gold will be going up then those sellers should keep it and then sell later,instead they are selling gold NOW like crazy,advertising on TV.
And still they seem to like dollar more then gold. :-)
Gold is a bubble and is beginning to come back down as the US Dollar gets stronger in relation to other currencies. All commodities around the world are still traded relative to the US Dollar, and that does not appear to be changing soon. Gold is a great long term play against currency breakdowns, but at these levels, Silver is a better play for the average investor.