Comments on: Jim Rogers Economic Times Interview http://www.allthingsjimrogers.com/2009/06/03/jim-rogers-economic-times-interview/#utm_source=feed&utm_medium=feed&utm_campaign=feed An unauthorized Jim Rogers blog Wed, 25 May 2011 19:38:05 +0000 hourly 1 http://wordpress.org/?v=3.1.3 By: lsjogren http://www.allthingsjimrogers.com/2009/06/03/jim-rogers-economic-times-interview/comment-page-1/#comment-3352 lsjogren Mon, 15 Jun 2009 17:49:48 +0000 http://www.allthingsjimrogers.com/?p=450#comment-3352 Well, we are seeing a bit of a pullback in commodities today. I'm holding onto my precious metals stocks and nibbling a bit onto more as they go down. If they retrace a majority of the gains since the Nov 08 bottom I will be buying more. In the meantime I have about 50% of my money in cash. Inflation is coming, but I do not believe it will hit suddenly, I believe we will be seeing 10-12% annual inflation year after year. No big deal if you hold cash and it loses 10% per year of the rest of your investments are gaining enough to compensate. The other thing is: I sincerely believe inflation is not going to be broad based. It will hit some things but not others. I want to hold lots of cash because I believe I will be able to buy a house here in the US far cheaper in 3 years than I could today. Real estate will not go up for a long time simply because of supply and demand. In order for people to afford higher home prices, their wages have to go up. If we have inflation for several years, then most likely we will see wage inflation, but with hundreds of thousands of Americans losing their jobs every month, wages are not going up any time soon. Even if banana republic union elections (EFCA) get enacted, it will simply mean more unemployment, it will not lead to higher wages. I don't mind holding cash in the face of high inflation if I know that what I intend to use that cash for will not be inflating. And I need the cash to buy a house and home prices will be going down for several more years. So with all the money printing, where WILL we see that reflected in higher prices? Certainly commodities, precious metals, and probably stocks as well. Well, we are seeing a bit of a pullback in commodities today.

I’m holding onto my precious metals stocks and nibbling a bit onto more as they go down.

If they retrace a majority of the gains since the Nov 08 bottom I will be buying more.

In the meantime I have about 50% of my money in cash.

Inflation is coming, but I do not believe it will hit suddenly, I believe we will be seeing 10-12% annual inflation year after year.

No big deal if you hold cash and it loses 10% per year of the rest of your investments are gaining enough to compensate.

The other thing is: I sincerely believe inflation is not going to be broad based. It will hit some things but not others. I want to hold lots of cash because I believe I will be able to buy a house here in the US far cheaper in 3 years than I could today.

Real estate will not go up for a long time simply because of supply and demand. In order for people to afford higher home prices, their wages have to go up.

If we have inflation for several years, then most likely we will see wage inflation, but with hundreds of thousands of Americans losing their jobs every month, wages are not going up any time soon. Even if banana republic union elections (EFCA) get enacted, it will simply mean more unemployment, it will not lead to higher wages.

I don’t mind holding cash in the face of high inflation if I know that what I intend to use that cash for will not be inflating. And I need the cash to buy a house and home prices will be going down for several more years.

So with all the money printing, where WILL we see that reflected in higher prices? Certainly commodities, precious metals, and probably stocks as well.

]]> By: mac http://www.allthingsjimrogers.com/2009/06/03/jim-rogers-economic-times-interview/comment-page-1/#comment-3213 mac Tue, 09 Jun 2009 02:17:13 +0000 http://www.allthingsjimrogers.com/?p=450#comment-3213 One particularly interesting comment in this interview is : "Central banks all over the world have printed huge amounts of money, and the real economy is not strong enough for all this money to be absorbed... so, it's going into stocks and real assets such as commodities. It's a mistake what they are doing. It's giving short-term pleasure, but there's long-term pain as we are going to have much higher inflation, much higher interest rates and a worse economy down the road. " We are seeing this happen in China, as well as the US. I have no real evidence, of course, but i suspect that these market rallies we are seeing around the world is being driven by "bailout" funds given to banks by their respective governments. I am not sure how long this can last, and when the SHTF, all of these asset classes, including commodities, are going to get hammered. I most definitely like commodities as a long-term hold, but I am not buying any right now. The runup has been quite high, especially in copper. I may be wrong here, but i am going to have to sit on the sidelines and wait for a market collapse before buying commodities and then holding for the long term. I am especially looking into dividend paying energy stocks, but also like big players like RTP and BHP in the mining sector, and MOO / POTASH and agrifarmers in China. Still, I feel like prices are too high and a re-collapse will occur before inflation really takes hold. Mac One particularly interesting comment in this interview is : “Central banks all over the world have printed huge amounts of money, and the real economy is not strong enough for all this money to be absorbed… so, it’s going into stocks and real assets such as commodities. It’s a mistake what they are doing. It’s giving short-term pleasure, but there’s long-term pain as we are going to have much higher inflation, much higher interest rates and a worse economy down the road. ”

We are seeing this happen in China, as well as the US. I have no real evidence, of course, but i suspect that these market rallies we are seeing around the world is being driven by “bailout” funds given to banks by their respective governments. I am not sure how long this can last, and when the SHTF, all of these asset classes, including commodities, are going to get hammered.

I most definitely like commodities as a long-term hold, but I am not buying any right now. The runup has been quite high, especially in copper. I may be wrong here, but i am going to have to sit on the sidelines and wait for a market collapse before buying commodities and then holding for the long term. I am especially looking into dividend paying energy stocks, but also like big players like RTP and BHP in the mining sector, and MOO / POTASH and agrifarmers in China.

Still, I feel like prices are too high and a re-collapse will occur before inflation really takes hold.

Mac

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