Jim Rogers, legendary investor and bestselling author of “Hot Commodities,” sat down with HardAssetsInvestor.com last week (published Monday) to discuss, gold, commodities, the Federal Reserve and the crisis occurring in Ukraine.
Here are takeaways from his interview.
Rogers said that he believes there will be another opportunity within the next two years to purchase gold, but did concede that he is a terrible market timer and short-term trader – a confession he has made numerous times in interviews.
He stated that he hopes to buy if gold trades at $1,000 per ounce or if the United States and Iran go to war and gold is priced at $1,600.
“In my view, it’s more likely there will be another chance to buy gold lower than now, and that’s why I’ve hedged some of my gold, but I’m not selling,” explained Rogers.
Ukraine, Commodities & Agricultural Commodities
The situation in Ukraine continues to deteriorate and worsen as time goes by. This is important for commodity investors to keep an eye on because both Russia and Ukraine are commodity producers.
“Ukraine especially is a large agricultural commodity producer and has been for centuries, and it’s been awfully good at it for centuries,” said Rogers. “I don’t know if this is going to disrupt production or not, but if it does, that is just that much less supply on the market.”
Meanwhile, when it comes to agricultural commodities, Rogers points out that agricultural products are at near historic lows, the globe has consumed more than it has produced (low inventories) and there are a paucity of farmers. This is unsustainable, says Rogers.
“I can go on and on. More people in America study public relations than study agriculture. So we have low inventories and we have a shortage of farmers developing. We’re expecting a crisis in agriculture sometime in the next few years, and prices are going to go much, much, much higher,” Rogers espoused.
The Federal Reserve continued to taper its quantitative easing initiative by another $10 billion last week to $55 billion per month. Some contrarian investors, such as Peter Schiff, believe the Fed will taper the taper talk and reverse its current measures once the central bank relies on monthly stimulus.
Whatever the case is, Rogers says the Fed and its monetary policy have been “a disaster for all of us, for the whole world.” According to Rogers, QE should have never been initiated, but since the Fed is filled with academics and bureaucrats they had no idea of what else to do.
“It’s going to be terrible. Never in the history of the world has debasing of currency been good in the long term or the medium term. Sometimes it has helped in the short term, but it’s certainly not going to be good for us in the long term,” said Rogers. “And this is the first time in recorded history when you’ve had all major central banks printing money at the same time, so when this ends, it’s going to be a disaster for the whole world. “
The founder of the Rogers Commodities Index argued that some sectors of the stock market are overvalued and several elements, such as social media and technology, are in bubbles. He noted that the entire market isn’t in a bubble – to Rogers, an overpriced market is not necessarily a bubble.
“I have no idea whether the market is overpriced, but I wouldn’t be buying U.S. stocks. I mean, they’re at all-time highs. There are other markets around the world that are certainly much cheaper on a historic basis,” said Rogers.
Rogers owns the Rogers Agricultural Index and he is looking to buy shares in China and Russia.