Jim Rogers November 2009 Businessweek

I 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 decade—I didn’t say the next month, I didn’t say the next year, I said the next decade—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 people—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 everywhere—from Saudi Arabia to Wall Street-backed funds—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.

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“What has been your most spectacular gain?

The Quantum Fund. When we started the company in 1970, I had $600 in my pocket. Within 10 years, the portfolio had gained 4,200 per cent.”

I was honestly expecting an answer such as “We put a trillion into gold as a gold mine in Tahiti would be discovered.” But his answer could not have been better. Check out the complete interview by clicking on the link below.

Click here for the complete interview

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* The $USD is a terribly flawed currency
* There are so many pessimist, their is the possibility of a rally
* If the $USD is replaced as a reserve currency, most likely it will be the Euro
* The Chinese are going to be forced more and more to open up their currency
* Commodities are not in a bubble, yet
* We have a catastrophe coming in oil and is surprised oil is not higher
* Wouldn’t buy Gold right now,but would if it goes down
* Gold will double in the next several years
* You might make more money in Silver than Gold.
* The idea that you can solve a crisis of debt and consumption with more debt and consumption is absurd
* You can solve the problem by letting people go bankrupt, and restart from point zero.

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I don’t know whether Bloomberg is trying to start a Nouriel Roubini vs. Jim Rogers war, but I didn’t like the way Bloomberg’s host started this interview. Three questions on Roubini to kick things off. One thing that did become obvious to me is how wrong Mr. Roubini is if he in fact believes Emerging Markets are in a bubble due to the fact Emerging Markets they have risen a bit. I don’t know much about Roubini, but one thing I have noticed since he became “famous” he might be stepping out of his circle of competence. By that I mean he is an Economist trying to become a market commentator. Not working buddy.

Bubble Definition According to Dictionary.com

an inflated speculation, esp. if fraudulent:

A quick reminder to Mr. Roubini, the growth in some of these Emerging Markets are real. China is growing, Brazil is growing,etc.. They were more of a bubble back before the crash.

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