Jim Rogers: ‘Gold to Rise Much Higher, DO NOT Sell’

Feb 2012

Jim Rogers: ‘Gold to Rise Much Higher, DO NOT Sell’

This week famed commodity bull and legendary hedge fund investor Jim Rogers spoke with Indian-based “Economic Times” on gold, China and Iran. Rogers is Chairman of Rogers Holdings but came to fame after running the most successful hedge fund in history, the Quantum Fund, with now billionaire George Soros.

Rogers on China

China is presently on a monetary easing path like most of the world’s central banks. Given China’s policy of currency controls via a dollar peg, they are forced into printing money in tandem with the Federal Reserve. Mimicking US monetary policy has pressured prices in China upwards and since late 2010, this has made US imports from China increasingly expensive:

Rogers reasons that real assets are the place to protect against these inflationary forces and have the added benefit of performing well on strong resource demands from emerging markets with large populations like China. China’s efforts, according to Rogers, are simply a product of global stimulus efforts and its the combination of loose policies from varying countries that really solidifies the case for precious commodities.

Rogers says,

“Throughout history when you have people printing money and debasing currency, the way to protect yourself and to make money is to own real assets… You now have the Bank of Japan, the Bank of England, America, the Chinese apparently are loosening up. Everybody is now loosening the money supply, printing money. That’s good for real assets.”

In addition, Rogers figures even if the world economy improves, and the dire predictions are incorrect, the relative scarcity of commodities will force their prices higher. That said, Rogers points out that he still favors rarer, precious commodities over the more industrial varieties:

“If the world economy gets better, the shortages of nearly all commodities are developing and I am going to make money in the commodities. If the world economy does not get better, they are going to print a lot more money. The place to be is in real assets, including base metals. I do not own as many base metals as I own precious metals, but I own them all.”

Rogers on Iran

Rogers fears a war with Iran may be looming given the sentiment in Israel and Washington, and thinks almost all assets are vulnerable under those circumstances with one major exception; gold. Despite the possibility for an initial spike up in the value of the dollar following a global deleveraging, gold will still remain the place to seek safety according to Rogers:

“If somebody starts bombing Iran, everything in the world is probably going to go down for a while except maybe gold. Maybe the US dollar would go up initially, but probably everything would be hit in the shock except maybe gold. So I own gold. I am not selling my gold. I bought some gold on Monday… if gold goes down a lot, I would buy. I hope I am smart enough to buy a lot more gold. Gold is going to go much higher over the course of this decade. Do not sell your gold, not yet.”

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