Wednesday, August 17, 2011

Water: The hidden agenda in farm land investments

Commodity Online
Jim Rogers, co-founder of the Quantum Fund recently told Investment U that agriculture prices on a historic basis are still depressed and that is where he sees the next opportunity.

Yes, Jim Rogers is betting on agriculture. But read this too: dating back from 1970, there have at least been four price jumps to the tune of 100% which was followed by thorough declines in the S&P agri-commodity index!

Not everybody is a Jim Rogers! So, investors are betting big on farmlands these days, a safer-than-agricommodities-bet.

The farmlands provide a respite from cyclical price swings of the commodities market. Average value of an acre of farm land tracked by USDA featured mostly a steady climb from $737 in 1980 to $2,350 in 2011, says Bloomberg.

According to Jeremy Bentham, farmland and forestry would outperform all global assets long-term.

“Farmland is the lowest-risk part of the value chain, but it’s also a key part of production,” says Jose Minaya, TIAA- CREF’s head of natural resources and infrastructure investments to Bloomberg.

In fact, hedge-fund manager Stephen Diggle calls farming the ultimate safe haven.‘After all, you cannot eat gold’, he says.

Leasing farm lands

Of course, the farmland frenzy is fuelling so-called land-grabs in Africa and other parts of the world.

“Foreign governments have dipped their toes into African and South American land markets in the hope of securing long-term food supplies…” says an ABN Amro World Agronomy Report.

In several cases the lands were leased:

In eight African countries recently studied, lease terms varied from 20 to 50 years, with renewals often possible up to 99 years. The FAO report on the matter noted: “Most leases involved payment of an annual rental of from less than $2/ha in Ethiopia to $5/ha in Liberia through to $13.8/ha in Cameroon.”

Many business houses, especially from India and China are occupying land at cheap prices in many parts of the world, especially in impoverished African countries.

Water scarcity and farm land buying

There are arguments that water scarcity is propelling certain investors towards land with water surplus.

“It is a particular issue for countries such as China and the Gulf states where water resources are particularly limited. As with land deals in general, little evidence exists which document the rights gained by investors over water. But the evidence which exists indicates that small-scale farmers may suffer greatly. For instance Bues (2011) demonstrated how in Ethiopia, the distribution of water rights within an irrigation scheme changed in favour of the land acquirer and against local farmers, due to the greater bargaining power and resources of the former.” The FAO report notes.

The report predicts:

“Contentious water issues will not disappear and are likely to intensify due to changes in climate. This will further propel and increase the need for investment. As a result, awareness of water issues is paramount and because acquiring water rights is such a key issue in investment projects, they will invariably impact on water management for many inhabitants both up and downstream. This is certainly illustrated in one major land and water deal in Mozambique...”

Hence negotiation of water rights is a question of vital importance in farm land contract negotiations, the agency notes.

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Jim Rogers: S&P and Moody's Have Never Been Right - Bull Source

Investor Jim Rogers gives his reaction to Standard & Poor’s decision to lower America’s credit rating from AAA to AA+, and offers his thoughts on the global recession.

“The United States has not been a AAA credit for a long time, and the only people who don’t know that apparently are Standard & Poor’s, Moody’s, and the US government.”

Rogers pays no attention to the rating agencies. Three years ago, Standard & Poor’s and Moody’s said that subprime loans were AAA, Rogers points out. The agencies also ranked AIG, Fannie Mae and Freddie Mac as AAA until the day they went bankrupt, he notes.

Rogers says the first global recession hasn’t ended. Eventually, the US will default, he believes, possibly by inflating away its debts with worthless money.

Tuesday, August 16, 2011

Jim Rogers Prepares for the Crisis

Benzinga Radio spoke with legendary investor Jim Rogers earlier this week. Rogers founded the Quantum Fund with George Soros and has invested in markets across the world throughout his career. He is the chairman of Rogers Holdings and Beeland Interests, Inc and is the creator of the Rogers International Commodities Index. He has also written 5 books detailing his adventures in life and investing around the world. Rogers takes a macro approach to investing, and trades in stocks, currencies, commodities, and fixed income securities on a global level.

Rogers told Benzinga that he is betting heavily on commodities, and that he owns every single one that trades. In particular, he likes agriculture and precious metals. On the short side, he is bearish on stocks and U.S. government bonds.

"I am long commodities, especially agriculture and precious metals, but I'm long all commodities. I am long some currencies. I am short emerging market stocks. I am short American technology stocks. I'm short large, international banks. I'm short government bonds… That's where my money is. Who knows if I'm right."

Jim Rogers Says Gold Going Higher, EU Deserves Downgrade - Forbes

Commodities bull Jim Rogers tells The Economic Times of India that gold is going higher, but cautions investors about buying into gold rallies. His favorite markets are India and China, and he suspects the UK and France will be the next countries to lose their AAA credit rating.

The U.S. lost its AAA status on Friday, Aug. 5, when Standard & Poor’s lowered the country’s debt rating one notch to AA+. The U.S. is still investment grade.

“Governments all over the world are debasing currency; Yesterday, the US Federal Reserve said it will continue to debase their currency. The more the governments will debase paper currency, people will take refuge in real assets and gold is one of them,” he said.

Global equity markets will likely continue to sell off. His favorites are China and India, but both face headwinds on account of easy money policies in the U.S. and Europe, pumping excess liquidity into emerging markets that often causes inflation.  More U.S. stimulus is expected to keep the economy from falling into a recession.

Investors were glued to their favorite news sources throughout the month of July as Congress debated whether or not to raise the $14.26 trillion debt limit, and where to cut spending going forward. In mid-July, Standard & Poor’s warned that unless Congress could make cuts of $4 trillion, a downgrade of its credit rating was coming. Congress agreed to roughly $2.4 trillion in cuts, many of them discretionary spending like defense, with the risk that some of those cuts could be voted down in the years ahead by a new Congress or president.

After the debt bill was signed by President Barack Obama, Wall Street turned its focus on the European sovereign debt crisis. With Italy and Spain looking like they will need a European Central Bank backstop to keep them from defaulting on some government expenditures, and France looking like it is next in line for a downgrade, the market went into a tailspin. On Monday, the first post-U.S. downgrade trade in market history, global equities sold off by more than 9% in the U.S., and more than 10% in the emerging markets.

“The U.S. has been downgraded and countries like the UK have very high debt will have to be downgraded too. You can’t have the UK as triple ‘A’ and the US as not a triple ‘A’. You need to be asking S&P or Moody’s why they haven’t got around doing that. I don’t think, the European countries deserve their rates,” he told the Economic Times.

Jim Rogers: Bernanke, Geithner Leading Us Into Fiscal Armageddon

The United States is quickly approaching a fiscal Armageddon and the players in Washington — specifically Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke — don’t understand what is happening or know what do about it, world renowned investor and author Jim Rogers tells Newsmax.TV.
The chairman of Rogers Holdings and Beeland Interests, Inc.  predicted more problems in the financial markets in the next few years and said any halt in the decline of stocks was just a “temporary bottom.”
He said that while America was not at the brink of a fiscal Armageddon right now, the nation is likely to default on its obligations in the future.
“This decade absolutely, probably sooner than this decade,” he said. “It is astonishing America is the largest debtor nation in the history of the world. This is not good news, what is going on in Washington, these guys are really, really out of it, they don’t understand what's happening and we’re all paying the price and it’s going to get worse.”
Story continues below.

Rogers said that despite what economists say, the country has not left the recession and a depression could happen.
“I don’t think we ever left the first recession, this is one long period of economic difficulty and America is going to pay the price for all of these mistakes.”
He placed the blame for the country’s economic ills not on Congress or the White House, but the Federal Reserve.
“The federal reserve is the main culprit because they kept bailing people out instead of letting the market clear and instead of letting people go bankrupt and start over,” he said. “If I had to blame one group I would blame the Federal Reserve under (Alan) Greenspan and (Ben) Bernanke.”
Rogers had particularly strong words for Bernanke and Tim Geithner, whom he said should have never gotten their jobs in the first place.
"They shouldn’t have gotten the jobs, they should leave, they should get somebody else who at least understands economics, finances and currencies," Rogers said.
“Mr. Bernanke has been wrong for 400 weeks in a row now,” he said. “He’s never been right about anything.”
He said Bernanke doesn’t understand currency and will continue to print money in an effort to help the economy.
“It is absolutely the wrong thing to do,  but that’s all Bernanke knows,” he said. “He has spent his whole intellectual career studying the printing of money and now America has now given him the printing presses. You just wait until we have real problems. He’s going to run (the presses) just as fast as he can.”
He said that Geithner, in his previous position as president of the Federal Reserve Bank of New York,  was in charge of overseeing those that the government ended up bailing out, adding, “everything he’s ever done has been wrong.”
Rogers said the economy can be repaired, noting countries like Mexico, South Korea and Russia survived similar crises; but he expects the country is in for pain.
“We’ve made some terrible mistakes in the past 40 or 50 years,” he said. “We’ve gone from being the only creditor nation in the world to being the largest debtor nation in the history of the world. We’ve created huge excesses.
“You don’t just wake up one day and say okay that’s over, that’s fine, let’s move on to the next thing. We are going to have to take some pain, admit our mistakes, have some bankruptcies, cut spending with a chainsaw at the government level. It’s not going to be fun. The more we put it off, the worse it gets.”
Rogers, who moved to Singapore in 2007 and is also known for his global treks by motorcycle and his custom-made Mercedes, said he was putting his money in commodities for no. He owns both gold and silver and predicted they will go higher.  And although he worries about the quick rise of gold, he said such jumps usually lead to corrections. However, he said if it goes down he will buy more.
Rogers does not see the United States getting its triple-A bond rating back in his lifetime and thought a default of some type was inevitable.
“There are many ways to default. You can put on exchange controls. There’s lots of way to default and America will certainly default. Whether there’s ever a day where America says we won’t pay our bills, probably not. They’re more likely to give you worthless money.”
Editor's Note: Some experts fear that 50% unemployment, a 90% stock market crash, and 100% inflation are on the horizon. Watch the Aftershock Survival Summit Now, See the Evidence.
© Newsmax. All rights reserved.


Jim Rogers: Soaring Food Prices to Spark Riots

Jim Rogers, chairman of Rogers Holdings, says he sees higher returns from agriculture than other commodities, and expects more international turmoil as food prices continue to rise. "Agriculture prices are still, on a historic basis, extremely depressed, and in my view I'll probably make more money in agriculture than other things," Rogers told The Australian.
"I fully expect more social unrest in the world, I fully expect more turmoil, but I didn't expect it to happen this quickly because food prices are somewhat depressed," says Rogers.
"It will slow growth but some people are going to benefit -- Brazil's booming, Canada's booming, Australia's booming, you're going to see some people benefit and some people suffer, that's the way the world works."
Rogers says it’s inevitable that food prices will rise, if for no reason other than that higher prices will attract more people to farming in developed nations such the U.S. and Japan, where the average age of those in the industry is 58 and 66 respectively.
"Prices have to go a lot higher to attract capital and labor and management into agriculture or we won't have any food -- all the farmers are going to die, and then what are we going to do?" Rogers asks.
The Daily Republic reports that Cargill CEO Greg Page blames government hoarding for the global surge in food prices at the end of 2010.
“We have to make sure lawmakers share our understanding,” Page told attendees at a national meeting of feed and grain executives. © Moneynews. All rights reserved.


Monday, August 15, 2011

Stopped buying Gold, Silver : Jim Rogers

Investing legend, Jim Rogers has stopped buying gold, Silver and stocks and is upbeat on agriculture. In an interview to Garett Baldwin, Executive Editor of Investment U, Rogers said that agriculture prices on a historic basis are still depressed and that is where he sees the next opportunity.

Jim Rogers, co-founder of the Quantum Fund told Investment U that he has stopped buying Gold and Silver but is not selling as he believes that gold will hit and surpass $2,000 an ounce soon rather than later.

The present commodity supercycle will last for 20 to 25 years. So if this commodity bull started in 1999 or 2000, this bull will run until about 2020 to 2025, he added.


Tuesday, August 9, 2011

Rogers, Rickards and King on the market turmoil

The post dollar world, the Gold Standard, the “largest debtors in the history world”: Jim Rogers, Jim Rickards and HSBC’s Stephen King give Faisal Islam their thoughts on the downgrade.

Watch the videos for the full interviews with King and Rickards, and read Rogers’ comments below.

Stephen King, the chief economist of HSBC tells me that “financial anarchy” is possible for the next few years as the world has begun its adjustment to the “post- dollar world”.

Jim Rickards, a bond market specialist from the US, tells me why the downgrade was “a mistake for S&P”, why a return to the gold standard is the answer, and why the Tea Party should be praised. He answered your Twitter questions…

Lastly the legendary Jim Rogers, who once told me to become a farmer during an interview, could not be interviewed on tape, but emailed me this comment: “The “downgrade” is meaningless. The rating agencies have zero credibility. Besides everyone knows the US has not been AAA for years.

“We are the largest debtor nation in the history of the world and it is getting worse.

“I know you have to report something, but any investor who bases anything on this should not be investing. It is not even old news; it is not news.”


Jim Rogers: 'Impossible' for U.S. to Pay Off Its Debt

NEW YORK (CNBC) -- The U.S. doesn't deserve a AA-plus credit rating, much less triple-A, commodity bull and noted investor Jim Rogers said on Monday.

Rogers said the country is unlikely to be able to pay off its debt and that Standard and Poor's rating cut had come too late and should have happened long ago.
"It seems to me it's physically, humanly impossible for the U.S. to ever pay off its debt," Rogers said. "They can roll it over and continue to play the charade, but the U.S. is bankrupt."
Rogers' comments came during a CNBC interview with the head of sovereign ratings at Standard and Poor's, David Beers.
Beers said that according to S&P's calculations, total U.S. public debt, which includes local, state and federal government debt, will be $11 trillion this year, and will rise to $14 trillion in 2015 and to $20 trillion by 2021.
To put those numbers into perspective, according to the U.S. government's Bureau of Economic Analysis, U.S. annual gross domestic product (GDP) totaled $15 trillion in the second quarter of 2011.
Rogers, who has been critical of the U.S. economic policies for some time, said he remains short 30-year Treasurys , emerging markets and U.S. technology stocks but was long safe havens such as the Swiss franc, the yen and the dollar.
Rogers said he was also long commodities, especially gold and agriculture, and accepted that some of his long commodity positions may suffer in a selloff. Still, he won't be selling.
"You should nearly always buy into panic just like you should sell hysteria," Rogers said. "I own gold, I'm worried about gold, it's going so up so much, I'm not going to sell it but it looks like it's setting itself up for a nice correction. I hope so then I can buy more."

"The U.S. doesn't deserve a AA-plus credit rating, much less triple-A," asserts Jim Rogers, saying "it's physically, humanly impossible" for the U.S. to ever pay off its debt. "They can roll it over and continue to play the charade, but the U.S. is bankr

I am long on commodities, short on stocks: Jim Rogers - Commodity Online

MUMBAI (Commodity Online): As the market slide continues, commodities will be the first thing to turn around and go up, said Jim Rogers in an interview to ET Now
. In the 1970s, Gold dipped 50% before it picked up steam and hooted past record highs adding value by 850%, he said.
Talking to ET Now, Jim Rogers, the savviest commodity market player and Chairman of Rogers Holdings, said the current developments in the markets are reminiscent of the 1970 crisis, when there was a shortage in commodities but the governments all over the world were printing money. Such a scenario can fuel a bull market, he said.

Currently, there is panic in the market, and panic can make strange things happen.

Economic woes

The world is having serious economic problems building up for the past 3-4 years, he said.

America—the largest debtor—is scaling up in debts further even as many European nations join the fray.

“The world has got serious, serious problems” he said and added, “America's situation has got worse and worse and worse...”

He pointed out that the world has not properly dealt with the first recession, even as he said that the he was not sure if the world has got out of the first recession.

Emerging markets

Since the Emerging Markets went up a great deal in the past years, there is likelihood that the markets there would come down, adding that, the markets “probably going to do as bad or worse than the west.”

Long on commodities

Jim Rogers revealed that he is long on commodities but short on stocks. Bullish about gold, he said he would buy Gold if the prices dip and would not prefer to buy when the prices rule at near-record highs.

Printing money is wrong

When the panic ends, commodities would be the first thing to turn around go up, he said. Given the shortage, governments would print money.

“It is a wrong thing to do but the American central bank has said it will print more money if things do not get better.” He pointed out. And if that be the case commodities will continue to go up, he added.

Monday, August 8, 2011

UK 'faces credit rating cut and more money-printing' -

Jim Rogers said he had long positions in agriculture, gold and other commodities and was short on emerging market stocks, government bonds and US financial institutions
Mr Rogers said it was crazy to think that the US could be downgraded while countries such as the UK and Spain escaped a rating cut.

“The idea that the US is downgraded and the UK is not is lunacy,” he told Reuters. “There are many countries – Belgium, Spain, lots of countries in Europe – that should be downgraded just as the US has been.”

Mr Rogers’ comments came after Standard & Poor’s downgraded the US’s prized triple-A credit rating late on Friday of last week, an action he claimed had been too slow in coming.

The recent sell-off of shares on global stock markets has been prompted by moribund economic growth in much of the Western world, a trend Mr Rogers said was likely to lead governments to restart money-printing programmes.

“They’ll try to disguise it. They’ll call it cupcakes or who knows what,” he said. “It’ll cause a big rally in raw materials and commodities because more and more people will realise they are printing money, and debasing the currency.”

Mr Rogers’ comments are a reflection of his investment positions. The Quantum Fund co-founder, who worked alongside the renowned US financier George Soros in the 1970s, said he had long positions in agriculture, gold and other commodities and was short on emerging market stocks, government bonds and US financial institutions.

While he suggested Western economies would experience tough times in the coming months, he welcomed actions by the Chinese government to cool its economy.

“Is it going to be fun? No, some real estate investors are going to go broke in Shanghai and other parts of China,” he said.

“But that’s not the end of the world, that’s not the end of the Chinese economy. Things may slow down but China’s not going to fall off the face of the world.”

Thursday, August 4, 2011

Farming and Ranching is No 'Get Rich Quick' Scheme - Farm Bureau News

For some time now, the investment guru Jim Rogers has been encouraging young people not to pursue careers in high finance, but to become farmers. Rogers argues that in these times, farming is a greater path to wealth and riches than investment banking.

Commodity prices are up, retail food prices are high and demand continues to grow. “The world has got a serious food problem,” Rogers said in a recent interview with Time magazine. “The only real way to solve it is to draw more people back to agriculture.”

Rogers is right, to a point. Net farm income is up and should break a nominal record of $99 billion this year. Farm land values are rising and the balance sheets of most of America’s farmers and ranchers are strong. But what Rogers needs to remember is that the costs of growing crops and producing livestock are also going up, primarily because of higher energy and fertilizer costs. Farming is still a high-risk occupation, far riskier than trading stocks and bonds on Wall Street.

It costs a lot of money to put a crop in the ground and nurture it to a successful harvest. And this year, many farmers and ranchers are battling historic drought. In fact, agricultural losses in Texas could be the worst that state has ever seen, possibly twice the record loss of $4.1 billion in 2006, according to David Anderson, an economist with the Texas AgriLife Extension Service. High cotton and corn prices don’t do you a lick of good if you don’t have a crop to harvest.

Still, Rogers is bullish on the long-term profit potential of agriculture. He believes farm income will continue to rise over the next few decades and has greater growth potential than other industries. Demand from China is driving much of the gains while the boom in biofuels is also helping.

“If I’m right, agriculture is going to be one of the greatest industries in the next 20 years, 30 years,” Rogers said on CNBC in March 2009. Today, two years later, he is still optimistic.

Another way to look at it is that agriculture could well be the growth industry of the 21st century. And that is a good thing for both America and the world. A strong and robust farm economy can help revitalize rural communities, benefiting everyone from the local car dealer to local schools. For most of this century, bad economic news has dominated the headlines. America’s farmers and ranchers can help lead the economy back to prosperity.

But steps must be taken to lower production costs and reduce the risks of farming and ranching. The best way to do this is to reduce energy costs, which is why the United States must be focused on energy independence. The United States must develop a comprehensive national energy policy, which includes opening and using new sources of petroleum along with renewable fuels.

One thing is certain: farming is no “get rich quick” scheme. Commodity prices may be up, but the costs of producing those commodities are also up. Add weather risks to the equation, and there is no guarantee that you will see a lucrative payday like those enjoyed by many Wall Street investment bankers.

True, there are great rewards in farming and ranching. But with those rewards, come many, many risks. John Hart is director of news services for the American Farm Bureau Federation.

Investor guru says there's money to be made in food - The Australian

RENOWNED commodities bull Jim Rogers says he sees higher returns from agriculture than other commodities, and has predicted more international turmoil as food prices continue to rise.

Speaking in Sydney yesterday, Mr Rogers said the commodities bull market that started in 1999 had a long way to run, mainly because of a generally lacklustre supply response.
"Agriculture prices are still, on a historic basis, extremely depressed, and in my view I'll probably make more money in agriculture than other things," the 68-year-old Singapore-based investor and author told The Australian yesterday.
But Mr Rogers, who started the Quantum hedge fund with George Soros before retiring 31 years ago, said he was surprised food inflation was already contributing to unrest in countries such as Tunisia and Egypt.

"I fully expect more social unrest in the world, I fully expect more turmoil, but I didn't expect it to happen this quickly because food prices are somewhat depressed," he said. "It will slow growth but some people are going to benefit -- Brazil's booming, Canada's booming, Australia's booming, you're going to see some people benefit and some people suffer, that's the way the world works."
According to Mr Rogers, there appears no option but for food prices to keep rising, partly to bring in more farmers in developed nations, such the US and Japan, where the average age of those in the industry is 58 and 66 respectively.
He said: "Prices have to go a lot higher to attract capital and labour and management into agriculture or we won't have any food -- all the farmers are going to die, and then what are we going to do?"
Mr Rogers was in Sydney for the Australian launch of Royal Bank of Scotland commodities indices tied to his Rogers International Commodities Index.
The Alabama-born trader said there was little risk to parking money in commodities, even if the global economy started to slow down.
His theory is that if economies get worse, central banks will start printing money, leading to inflation. "When banks and governments start printing money, the best place to be is in physical assets," Mr Rogers said.
Turning to currencies, he believes the Australian dollar and the Chinese yuan are well placed.
"The Australian dollar's going to continue to rise, the Australian economy is going to continue to rise and Australia is going to be the lucky country for at least another decade or so because of commodities demand," Mr Rogers said.
He said he was buying yuan whenever possible because he was convinced it would be the most appealing currency when it was eventually untied from the US dollar.
Mr Rogers was also bullish on copper, gold and oil prices, saying they had further to run.

Wednesday, August 3, 2011

DJ Jim Rogers Sets Up Commodities Index With RBS

SYDNEY, Aug 02, 2011 (Dow Jones Commodities News via Comtex) -- Commodities investor Jim Rogers has launched a commodity index product with Royal Bank of Scotland Group PLC (RBS) for retail investors in the Australian market, the bank said Wednesday.
The indices product will cover 36 commodities futures including agriculture, energy products and minerals, RBS said.
The bull market in commodities still has a long way to go, especially given growth rates in China, India and other developing countries, where demand is rising at unprecedented rates, Rogers said in a statement.
Rogers is a noted commodities and currency investor and former partner of George Soros.

Monday, August 1, 2011

Jim Rogers: US Doesnt Deserve Top Credit Ratings

Even though ratings agencies say the United States could lose its AAA rating if the government fails to lift its $14.3 trillion debt ceiling and defaults by an Aug. 2 deadline, in reality, America ceased deserving that rating a while ago, says international investor Jim Rogers.
Simply put, America borrows too much.

"Everyone already knows that the U.S. has lost its AAA status," Rogers says, according to the Wall Street Journal.

"Anyone who knows what is going on, already knows that the U.S. is now the biggest debtor nation in the history of the world. It's only S&P and Moody’s that haven’t figured out what is going on. The investment world knows that the U.S. is not AAA."

"I don’t expect them to have real spending cuts. They have been talking about this for 40 years, talking about how they are going to solve the problem of the deficit. Remember the Grace Commission? Remember the Gramm-Rudman act? The Gramm-Rudman act said we couldn’t have deficit spending 25 years ago. They forgot about that," Rogers says.

Even if the country lifts the borrowing limit, the damage may be done anyway, which could still result in a downgrade.

"Our guess is, when push comes to shove, the debt ceiling will be raised," Bob Doll, chief equity strategist at BlackRock, which manages $3.66 trillion, tells Bloomberg Television.

"What goes along with that is very difficult to tell, and that’s why the threat of a downgrade still exists."

Jim Rogers

Warren Buffett

Nouriel Roubini