Monday, November 21, 2011

Jim Rogers on the Silver Price - Beacon Equity Research

If traders like gold at today's prices, then silver should be bought first, says famed commodities bull Jim Rogers.

Speaking with India-based Economic Times (ET), Rogers, the man who looks and dresses like a gentleman plantation owner from Mississippi (without the accent), said, of the two precious metals, gold and silver, he prefers silver at this time.

“I would prefer silver because it is still depressed on a historic basis. Silver is 30 percent below its all-time high, he said. “Gold is 10 percent below its all-time high. I would prefer one just on relative value, silver is probably better.”

Talking like a bona fide billionaire, Rogers isn't going to play with charts and suggest a time frame for gold's ascent above the magical $2,000 mark. Instead, the alumnus of Balliol College at Oxford went out on the limb and expects gold to reach $2,000 by 2020.

Like many people in Asia, especially in India, where the audience for the Economic Timesis largest, he owns gold because he wants it—just as he likes all commodities that he can trade in a futures market. India is expected to import more than 1,000 tons of gold this year, according to the World Gold Council (WGC)—that's an equivalent amount of Switzerland's total gold reserves—imported into India in one year.

“Gold would certainly go to 2,000 [USD]. I do not know when it is going to go to 2,000, but I know it certainly would during this decade,” Rogers sidestepped the question of when he thinks gold breaks the 2k mark. “Whether it's an asset class or a safe haven is irrelevant, the fact that I own it is because I want it. The price would go higher.”

Maybe Monday's interview with Fox Businesswas a more suitable place to break any bad news from the 69-year-old father of two toddler girls. In India, the population isn't happy with high gold prices, as a lot of the precious metal is bought for ceremonial and cultural reasons.

In the Fox Businessinterview, Rogers warned of a coming meltdown next year (or 2013) in the world markets, much worse than 2008-9. As he has repeated said for several years, it's the US dollar that's the most troubled currency today, though blowups in other currencies throughout may precede the fall in the Greenback.

“We still have serious problems throughout the world. The U.S. is in fact in worse shape than Europe,” Rogers said, Monday. “Europe is getting the press these days because the debts are coming due but America is the largest debtor nation in the history of the world.”

And as far as the euro is concerned, Rogers believes the currency won't make it, which adds another 27 percent to the dollar's 61 percent of total reserves held by central banks expected to decline in purchasing power throughout this decade. Under that thesis, he believes investors need to hedge themselves through commodities holdings.

“I own the Euro, but longer term it is going to be a disaster for all of us, the whole world, especially for Europe, because this is not solving the problem,” he told ET. “A year from now there is going to be more debt in Greece and in Europe. Two years from now, there is going to be more and more debt. Debt just keeps going up and nobody addresses the real fundamental problem.”


Sunday, November 20, 2011

Jim Rogers: China is where the money is - China Daily

SHENZHEN – Jim Rogers, co-founder of the Quantum Fund, said Thursday at the China Hi-tech Forum 2011 that he is still confident that China is where the money is.

He also told the forum that Chinese cities, including Shanghai, Shenzhen Dalian and Zhengzhou, will be financial hubs worldwide.

He explained that although China may have its problems, it is the largest creditor worldwide and has saved enough for a rainy day with its huge foreign currency reserve.

"It's now raining and the United States has saved nothing," he said.

The renminbi, China's currency, will be the only possible currency to replace the US dollar but it needs to be convertible, he added.

Shanghai was once the financial hub between New York and London, something that happens again, he said.

As American laws and regulations are pushing commodities trading outside the United States, the sector could potentially turn to Dalian and Zhengzhou if China decides to open the markets, Rogers told

Many Chinese have yet to realize that China will be the center of the world and that the 21st century is the century of China, he said.

The forum is part of the 2011 Hi-Tech Fair 2011, which is held in Shenzhen on Nov 16-21 every year.

Wednesday, November 16, 2011

Global Collapse a Done Deal, says Jim Rogers - Beacon Equity Research

By Dominique de Kevelioc de Bailleul

As Rogers moved from India's Economic Times, to Fox Businessand over to his latest stop, CNBC, his message to investors is: If you think 2008 was bad, 2012 will be worse.

"We're certainly going to have more crises coming out of Europe and America; the world is in trouble,” Rogers told CNBC. He said everyone has spent beyond their means, public and private, “and it's all coming home to roost.”

Rogers' more dire message recently speaks to the consensus of other thoughtful and unencumbered minds of economics and finance this week, especially today, as Bloombergfeatured gold standard advocates Jim Grant and Jim Rickards during a lengthy joint discussion with the two men on Money Moves. Rogers doesn't refer to gold standards much as Grant and Rickards have lately, but he has discussed his fear of central bankers and their printing presses running wild in response to the crisis. Today, he believes the global financial system cannot weather a multiple of more debt added to the already highly leveraged central banks balance sheets prior to 2008.

“Last time, America quadrupled its debt. The system is much more extended now, and America cannot quadruple its debt again,” Rogers said. “Greece cannot double its debt again. The next time around is going to be much worse.”

Jim Grant echoed Rogers, during today's Bloomberginterview, pointing out that by his calculations the NY Fed is “leveraged more than 100 to 1,” while in the next breath chiding the ECB for its profligate activities during the crisis, as well.

“Italian bond yields didn't drop on their own,” he said, referring to this morning's miraculous 170 basis points turnaround in the Italian 1-year bill rate moments following the auction.

In fact, piling on to the sudden slew of complaints about the ECB, JP Morgan's Michael Cembalest issued a note today, dispelling the rumor that the ECB has been so stingy, thus underscoring Rogers' point, that, though money has been printed in gigantic quantities, the problem has just gotten worse—not better—not more liquid—but increased insolvencies.

“To-date, that’s what [bank support] the ECB has done: of the 1.1 trillion Euros extended to European banks and governments (through sovereign/covered bond purchases and repo), 970 billion has been given by the ECB,” JP Morgan's Cembalest stated.

So with both the Fed and ECB piling more debt a top unserviceable mounds of previous debt, the critical mass or larger debt levels and higher interest rates set off the next crisis.

According to Martin Armstrong, founder of Princeton Economics, the breather between crises shorten until the final irredeemable breaking point is reached. Rogers believes that point is upon us, now, to as far out as 18 months. Those following Rogers know how conservative he is when discussing time horizons, which may suggest that an event may come closer to James Turk's expectation of mere weeks.

And he concluded on that point, "In 2002 it was bad, in 2008 it was worse and 2012 or 2013 is going to be worse still - be careful.”

Tuesday, November 15, 2011

Gold Price "Will Reach $2400" says Jim Rogers - BullionVault

THE DOLLAR Gold Price is set to reach $2400 per ounce, according to legendary investor Jim Rogers, cofounder of the Quantum Fund with George Soros in 1973. Despite his prediction, Rogers says he is more interested in Buying Silver.

The Gold Price "will easily go to $2000, but it will reach $2400 over the course of the bull run, which has years to run," Rogers told CNBC this week.

Rogers also predicts the Gold Price will enter bubble territory – though he says this may be some way off yet.

"The way bull markets work is they go up and up and then by the end they turn into a bubble and that will happen to gold...[but] that could be five years, 18 years or six years...I own both, I'm not selling either but if I had to buy one today I would buy silver."

HSBC meantime also expects the Gold Price to breach $2000 per ounce in the near future.

"We are looking for an average of $2025 for next year with a wide trading range of $1700 to $2300," says HSBC precious metals analyst James Steel, adding that he expects "highly volatile markets".

Get the safest gold at the lowest possible price with BullionVault...


Monday, November 14, 2011

Gold Price "Will Reach $2400" says Jim Rogers - BullionVault

THE DOLLAR Gold Price is set to reach $2400 per ounce, according to legendary investor Jim Rogers, cofounder of the Quantum Fund with George Soros in 1973. Despite his prediction, Rogers says he is more interested in Buying Silver.

The Gold Price "will easily go to $2000, but it will reach $2400 over the course of the bull run, which has years to run," Rogers told CNBC this week.

Rogers also predicts the Gold Price will enter bubble territory – though he says this may be some way off yet.

"The way bull markets work is they go up and up and then by the end they turn into a bubble and that will happen to gold...[but] that could be five years, 18 years or six years...I own both, I'm not selling either but if I had to buy one today I would buy silver."

HSBC meantime also expects the Gold Price to breach $2000 per ounce in the near future.

"We are looking for an average of $2025 for next year with a wide trading range of $1700 to $2300," says HSBC precious metals analyst James Steel, adding that he expects "highly volatile markets".

Get the safest gold at the lowest possible price with BullionVault...


Rogers in town to buy the farm - Stock and Land

COMMODITIES trader Jim Rogers is forecasting the beginning of a soft commodities and rural land boom and says it will start in Australia.
Mr Rogers, known for his investment prowess alongside George Soros, is in Australia to launch a new rural land fund which is seeking to raise up to $350 million to buy farms in northern NSW, according to The Australian Financial Review.
Mr Rogers said the growing risk of inflation as well as growing demand for soft commodities from Asia would fuel the demand for agricultural land.

"It's the farmers, the producers who are going to be in the captain's seat when the prices go through the roof," Mr Rogers said.
Well-known for predicting the start of the commodities rally in 1999, Mr Rogers said soft commodities were about to rise.

"The shortages are going to get worse and the prices for land will go higher."
The new unlisted closed end fund Mr Rogers is advising, called the Laguna Bay Pastoral Company, is testing the domestic investor market first before opening the opportunity to offshore groups.
It will partner with farmers who have been earning yields that the top 10 per cent of Australia's farmers are now earning.
The farmers will manage the properties and suggest what surrounding properties would be wise for the fund to purchase. So far there are 16 properties identified for acquisition covering 80,000 hectares.
"We have shortages of everything from oil to food and on top of that we have governments printing more money. Put the two together and you have some serious inflation coming down the road," he said.
"Governments will eventually put in place price controls but if you tell someone they can only make so much money he is going to stop producing. The Chinese are seeing this and that's why they are out looking to buy assets. They are down here [in Australia] trying to buy up more.
"I applaud them," Mr Rogers said of the sovereign wealth funds that have been buying farms. "We don't have enough farmers or enough capital so if somebody doesn't buy those farms then we are not going to have any food.
His comments come as Australia, New Zealand and Brazil review their foreign investment rules in relation to agriculture.
Australia holds its first senate hearing into foreign investment rules into farms on Tuesday week.

Friday, November 4, 2011

What Jim Rogers Might Say About October's Market Rally -

October was nothing short of incredible for the stock market — the S&P 500 gained almost 11% for the month and the Dow Jones Industrial Average rose about 10%. The euphoria is palpable. But will it last? Sure, the markets are thriving right now, but what are the bears thinking about as the economies of most developed nations are stagnating?

It might be interesting to delve inside the mind of a professional not sold on the market rally continuing. I’ve mixed some conjecture with some of his paraphrased comments to give you an idea of what iconic investor Jim Rogers might have to say about some facets of October’s rally, as well as what to expect looking forward:

We’ve seen this movie before. Rather than letting the banks fail, European leaders are going to bail them out. Quantitative easing like the kind used by the Federal Reserve doesn’t solve anything. If we’ve learned just one thing from what’s happened in the U.S., it’s that letting banks fail helps the system — it doesn’t hurt it. The same holds true in Europe.

Why is there a need to save bondholders? There are ways to protect shareholders to a certain extent, but at the end of the day, when all the banks are put in a room, it should be easy to choose those deserving of a second chance. Not letting banks fail only prolongs the inevitable. Let’s fix the system permanently rather than applying a Band-Aid, which is all this really is.

“Scarcity” is a word we’ll hear often in the future. As the population of the world just hit 7 billion people and will hit 8 billion within another decade, commodities are going to be the most sought-after asset anywhere. While the markets have done great in October, it’s been 12 years of going nowhere, and we should expect more of the same.

The Dow Jones Industrial Average increased just 25% between 1964 and 1982 — less than 2% a year. While stocks are bad, bonds are worse. The 30-year run on bonds is over. As we see from the Occupy Wall Street protests, social unrest is only going to get worse. Investors can protect themselves from both a sideways market and the scarcity that exists in foods, fuels and metals by investing in indices that own all three.

Of the three main commodity groups, agriculture is by far the most promising. Several factors make this so: First, nobody wants to be a farmer anymore. Everybody wants to get their MBA. Add to this the population growth alluded to earlier, and you have the perfect storm. Shortages will get worse and worse. Those who own the means of production, as well as the arable land necessary to produce food supplies, will win the battle. Everyone else will sputter along.

As mentioned in the opening paragraph, the S&P 500 is up 11.8% in October. The market has gotten quite frothy. In fact, eight out of 10 S&P 500 sectors are extremely overbought, according to Bespoke Investment group. Valuations for tech stock IPOs like LinkedIn (NYSE:LNKD), Fusion-IO (NYSE:FIO) and (NYSE:YOKU) have gone through the roof. As of Oct. 28, the three stocks average a price-to-sales ratio of 22 compared to an industry average of 5.1 and an S&P 500 average of 1.1. Shorting tech stocks and going long on agriculture stocks like Deere & Co. (NYSE:DE) makes an awful lot of sense.

Looking at the long term, China will be the winner in the 21st century. For now, stocks seem expensive — and with the possibility of stagflation on our doorstep, the best form of protection is to short tech stocks and emerging markets and invest in commodities instead.

As of this writing, Will Ashworth did not own a position in any of the aforementioned stocks.

Article printed from InvestorPlace Media,

©2011 InvestorPlace Media, LLC


Investor Jim Rogers Has Gloomy Outlook for U.S. Markets

International investor Jim Rogers argues the U.S. markets are inferior to Europe and the next economic slowdown will be much worse than 2008.

Thursday, November 3, 2011

Agriculture ETF Showdown: CROP Vs. MOO - Seeking Alpha

By Jared Cummans

If Jim Rogers has taught us anything, it's that agriculture exposure is a must for any investment portfolio. But buying corn or soybean futures and rolling on a steady basis seems impractical for keeping allocations to what might make up 1% of your overall holdings. Beyond futures products, there are a wide variety of equities tied to the agriculture sector, but picking the right one can be tricky business. Enter agribusiness ETFs. Products dedicated to offering exposure to a wide variety of firms tied to the agriculture sector, giving investors an equity spin on their favorite commodities like sugar, cotton, and cocoa [see also Three Things Wall Street Journal Didn’t Tell You About Commodities].

Currently, there are two strong ETF options available to investors; both come with their set of advantages and disadvantages that may make them right for one kind of investor, but completely wrong for another. Below, we outline the similarities and differences between the IQ Global Agribusiness Small Cap ETF (CROP) and Market Vectors-Agribusiness ETF (MOO) to help investors pick the right product for their goals.

The two funds track similar indexes, though CROP’s respective benchmark has a major focus on small cap firms while MOO’s DAXglobal Agribusiness Index has a number of larger household agriculture names. As far as underlying holdings go, the two funds could not be more different. CROP has a total of 71 holdings with 47% of assets dedicated to the top ten holdings. The fund is over 75% international and is dominated by mid cap companies, showing that it's always good to look under the hood of a product as its name and exposure do not necessarily line up. Top companies in this product include Tractor Supply, Viterra Inc, and Smithfield Foods [see also Invest Like Jim Rogers With These Three Agriculture Stocks].

As for MOO, the fund features less diversity, with just 45 total securities and over 57% of assets dedicated to just ten of those. The mostly-large cap MOO is home to big names like Potash, Monsanto, and Deere & Co. For investors looking to cash in on the U.S. robust farming success, MOO features an allocation of over 37% to the States, while countries like Canada and Singapore come in as the next two largest geographic weightings. Though MOO is large cap, the majority of its country allocations lie in emerging markets, while the small-cap CROP focuses on developed markets. Though this likely has little impact on either fund, it is certainly something to keep in mind before investing [see also 25 Ways To Invest In Silver].

From a trading standpoint, the two funds are apples and oranges as far as comparisons go. MOO has a hefty $5.4 billion in assets with an average daily volume topping 1.6 million. CROP, on the other hand, has just $40 million in assets and an ADV of 34,000. Keeping in mind that CROP is still in its infancy, the fund has grown quite nicely, but for active traders looking to quickly shift positions, MOO has the upper hand.

Comparing the two on historical performance is tough given that CROP debuted in March of this year. Since its inception, the fund has shed 10.9% while MOO lost 12.3% over that same time period, putting the funds relatively in line on a performance basis. The result does come as a bit of a surprise in that the small cap product is outperforming its large cap counterpart; in rough markets like we are enduring today, small cap products tend to fall behind while larger-based funds are better able to hold their ground [see also Dividend Special: Top Companies In Every Major Commodity Sector].

Looking specifically at MOO, which has been around since 2008, the fund has chalked up some nice returns. The product is down about 11.6% on the year (a typical result given the rough few months for commodities) but is up nearly 93% in the trailing three year period, making this an attractive long term option.

The fee structure of these two products is another important factor that investors will need to take a close look at. CROP comes at a price of 75 basis points, not terribly expensive given the small cap nature of its exposure. MOO, however, charges just 59 basis points in comparison. While this certainly makes it the cheaper option, it is still relatively expensive for a large cap product and may turn some investors off. Unless you are a heavy hitter, the 16 point spread won’t hit you too hard; a $10,000 investment would net to about a $16 annual fee difference in the two funds. But for those looking to make big bets, MOO’s cheaper expenses may save you a fair amount of money over the long term [see also Commodity Investing: Physical vs. Futures].

All in all, both funds come with a pretty solid methodology and make for enticing investment options. While no fund is better than the other, your investment style will certainly have an impact on which product is right for you. For the active trader, or risk-averse investor, MOO’s supreme liquidity and large cap structure will make for a stable investment. But CROP’s small cap build-out makes it a prime candidate for high growth, something that MOO cannot offer. Also consider that CROP has a much better diversity in its holdings than its competitor, which could have a significant impact over the long run.


EU Blowup, Dollar Down?! QE Done Deal - Beacon Equity Research

Greek Prime Minister George Papandreou is resigning; now, he's not—just a rumor. Referendum scheduled for the Greek people; now, it's not.

Berlusconi cannot leave his underage tarts for a day to prepare for a G-20 meeting. Italian bonds are on life support from the ECB from a near blowout Tuesday of more than 450 basis points to the German 10-year bund.

Dexia collapses. Who knows what counter-party risk is stuffed?

The new ECB chief Mario Draghi surprises the market with a 25 basis points cut at its 'marginal lending facility'. Portugal, Spain and Ireland salivate over getting a similar deal given to Greece, teetering banks in France and German. Now French banks are under severe pressure in a circle-jerk default scenario throughout the EU.

Japan, Switzerland, UK, and China are trashing their currencies to bits along with the euro—and the result of all of this Argentina-style mayhem? The USDX drops!

In fact, the rally from the 73.42 low of Jul. 28 to 76.92, as of Thursday, is a whopping 4.8 percent. That's the extent of the rally into the 'safety' trade. CNBC calls US Treasuries the 'safety trade', yet calls gold a bubble trade after the yellow metal corrected back to the planet Uranus following its trip to Pluto.

Famed commodities trader, Jim Rogers of Rogers Holding told in mid-October that the dollar is—how is it said, gracefully?—fading as a trusted reserve currency.

“The U.S. dollar has started fading as the world's reserve currency,” Rogers said, as the 68-year-old American citizen, now Singapore resident, complained of dollar debasement policies by the Fed, according to MarketWatch's John Prestbo.

Rogers used the words, “starting to fade.” Starting? It's a done deal, Rogers. Financial journalist should no longer use the term 'reserve currency' within the same sentence with the word 'dollar'. And to make matters worse, the villainous half of the former Rogers-Soros partnership at the Quantum Fund, George Soros, beat Rogers to the punch.

“The big question is whether the U.S. dollar should be the reserve currency; it no longer is, it shares that role with the euro, other currencies, and commodities,” Soros stated at the Bretton Woods II conference in April. “But it’s not just gold being used as a substitute, but oil too, which is putting upward pressure on the market.”

Students of the Weimar Republic days in Germany chuckle at those silly Germans who thought sterling, dollar, Swiss and French francs were strong against the reichsmark in the early 1920s, when in fact, the reichsmark was collapsing. Aren't financial journalist and TV commentators making the same mistake when discussing the US dollar? (see When Money Dies author Adam Fergusson discussion with Goldmoney's James Turk on

What started in earnest in January of 2010 with the blow-out of Greek bond yields has come down to a pathetic display of, not only the cartoonish leadership of the EU, but the fatal flaws of a framework for the euro currency at the outset.

No one doesn't know how bad the situation is on the other side of the Atlantic. But the obvious weakness in the dollar throughout this sordid affair is glaring—to say the least. As US investors chuckle at the EU, they do so while neglecting to notice the US dollar train wreck about to smack them in the face.

Is there any question that front-running of an announcement by the Fed of more QE is underway? How dare those silly Europeans debase their currency faster than the US dollar. Thank goodness the Bernanke is prepping to show who's still no.1 in the world!


Jim Rogers

Warren Buffett

Nouriel Roubini