Hot off the presses, Jim is talking about how he is selling the dollar, explaing what is going on in commodities, and large U.S. banks.
First, let’e get to his bread and butter, Commodities….
“Remember: Commodities are essentially based on supply and demand. Now, you have demand declining but at the same time you have supply going down even more. So, we are going to have higher prices, eventually.”
Why commodities considering the major declines?
“What you do in times like these is you find and buy the things where fundamentals are unimpaired. The only thing good I know where the fundamentals are unimpaired or where they have actually improved are commodities.
“There were some horrible setbacks along the way. I see this as just one of those horrible setbacks.”
Supply and Demand For Dummies
“Farmers are not getting loans to buy fertilizer now. Nobody can get a loan for a zinc mine now. All the mines are either closing and the ones still in production are using their reserves. Nobody can make new oil discoveries because prices are so low.”
On the Greenback (U.S. Dollar)
U.S Banks
“Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt”
U.S. Government
“Governments are making mistakes,” he said. “They’re saying to all the banks, you don’t have to tell us your situation. You can continue to use your balance sheet that is phony…. All these guys are bankrupt, they’re still worrying about their bonuses, they’re still trying to pay their dividends, and the whole system is weakened.”
Sources:
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA75H20081211?pageNumber=1
http://www.guardian.co.uk/business/feedarticle/8145557
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA57K20081211
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12. December 2008 at 6:32 pm
Has Jim Rogers made any comments recently about Brazilian Real as maybe the “least flawed currency”? The Brazilian central bank raised interest rates in July 2008 (to 13.75%) when the rest of the world was debasing its currency, and inflation is 6% but the central bank is targeting 4.5% inflation. S&P recently (July 2008) upgraded Brazil’s debt to investment grade. Plus as Jim Rogers noted in his essays on his website, Brazil is rich in commodity/agricultural resources including recent oil discoveries. And no dependence on foreign oil, due to extensive ethanol use.
12. December 2008 at 11:03 pm
Jim Rogers is consistent in his themes —- A simple basket of ETFs that follow his suggestions would be:
DBC – general commodity index
DBA – specifically agricultural commodities
FXI – china
TBT – short US LT Treasuries
kevin (www.bullinachinamarket.com)