Don’t worry about silver until it hits at least $100, says Jim Rogers

Commodities bull Jim Rogers has admitted he is worried that silver might go “parabolic” and crash later this year. The 69-year-old investor remains confident that gold will continue to rise but says that if silver continues to rise at its recent rate, “you’ve got a bubble”.

Rogers is well known for attracting press attention, famously moving his family to Singapore because Asia is “how Europe used to be”. However, investors will particularly interested in his view on silver as he has made several well-timed calls on commodities in the past.

Rogers made his name by co-founding the Quantum Fund with George Soros in the ’70s but it was the launch of his first resource fund in 1998 – which benefitted from rising commodity prices in the following decade – that established him as a ‘commodity guru’.

Speaking to a US radio station, Rogers acknowledged that “people are starting to notice gold” but remains confident that gold has plenty to rise. “Eventually everybody’s going to be owning gold, and then we’ll have to sell our gold. But that’s a long way from now.”

He denied that recent purchases by institutional investors, such as Texas University, marked the top of the market. “Gold’s been going up for ten years in a row. I’d hardly call this a tipping point.”

Rogers, however, was a little more cautious on silver. He noted that it has been “skyrocketing” recently and warned that if it hit $100 or more (it’s currently trading at around $45 an ounce) this year, he “would probably start to think about selling”.

On the one hand, “maybe the US dollar is going to become confetti in 2011, and if that’s the case and silver goes to $150, then obviously I wouldn’t sell my silver.” But if silver “goes parabolic” this year without an accompanying currency collapse, “I would be very worried.”

Recalling how he had begun to short gold when it “went parabolic in 1980″ he reminded listeners that “there’s never one [a bubble] in history that hasn’t popped”.

8 Responses

  1. 28/04/2011, Jonathan wrote

    In reading your article I see you point out that once everyone owns gold than “we will have to sell our gold”.
    For what? worthless fiat dollars? Hopefully we will have a gold backed system by than. But untill than gold and silver are “real” money not “currency”.

  2. 28/04/2011, ag_nostic wrote

    It amazes me that all these experts fall back on the old song that what
    has happened in the past will surely happen again in the future….
    Don’t these people realize this is a new paradigm? Our government is ruining our currency. Prepare accordingly.

  3. 29/04/2011, superskytim wrote

    This is your Captain speaking, Please hand your “Belief-Ticket stub “to your Silver flight attendant…Sit down in your seat and tighten your shoulder harness. “Your”SILVER Spaceshuttle, has been Cleared for immediate Takeoff . Your Destination: Upward but Unknown. If you look out the windows, you will noticed below, those unfortunate souls the left themselves behind, from pure lack of purchasing their own “Belief-Ticket.” We do encourage you to look out the window from time to time, to notice how small the rest of the world, Now actually looks. We will be passing the point of the Earth’s-JP Morgan, gravitational pull soon, and soon the attendant will be passing out ceremonious refreshments. Thank You for choosing Silver Belief Air

  4. 29/04/2011, Margaret wrote

    Even though I own silver more than gold at the moment I generally agree with this article. If you are are trader than some profit taking is warranted, if you are an investor, well then it’s up to you.
    I like to see which is overvalued and switch to what is undervalued. Eg. Say the ratio of gold to silver is 1:16, and now at current prices we have 1:32, then the gap is narrowing (it used to be 1:60). I may wait till the gap is 1:20 and then I would sell some silver and switch to gold, and vice versa.
    So basically, we should assess each asset class whether it’s overvalued as switch to what is undervalued. This would apply to any asset class, ie. property, shares, precious metals.
    However, at the moment there doesn’t seem to be any undervalued opportunities and I agree with Jonathan, that what else is out there?

  5. 29/04/2011, Mark wrote

    In my opinion Jim Rogers is a clown working for the New World Order talking nonsense. All you need to know about Rogers is that he co-founded the Quantum Fund with George Soros. He makes no sense in this article. He said that he’ll sell if it goes above $100, but then says he’ll keep it if it goes $150 and the dollar is confetti paper. Well which one is it Jim?? Well, I’ve got news for you…the dollar is already confetti paper. The difference between now and 1980′s silver/gold bull market is that this time around everyone around the world is aware of what is happening and divesting themselves away from dollars and into commodities because they know they’ve been tricked and they know that silver/gold has always been real money. The reason why so many people are buying is to protect their wealth from the destruction of the dollar. When silver goes to $150, what are you going to trade it for? Confetti paper? If silver goes to $500, are you going to trade it for toilet paper?

  6. 29/04/2011, Glenn wrote

    Mark; your comment is not accurate : Rogers, who’s accomplishments clearly earn him more respect than “clown”, clearly states that if Silver hits $100 WITHOUT the dollar crashing, then he would suspect it is in a bubble, whereas at $150.00 per oz where the dollar HAS crashed, he is implying there is a good reason for silver to be at $150 Also, if silver goes to $150, you could trade it for the same things that would make sense in any economy: 200 million americans still want to eat, rent, be safe, and use toilet paper. You would trade for income producing assets, buy or import goods that you can sell, or the dream property you always wanted, or apartments, or cheap homes to rent, whatever. The economy will not “stop” even if the dollar does. You would benefit greatly from reading blogs like Porter Stansberry, Off Two Minds, Gonzalo Lira, Soveriegn Man, and International Forecaster

  7. 30/04/2011, share tips wrote

    Thank you for sharing. Not to many people in your position are so gracious. Your article was very poignant
    and understandable. It helped me to understand very clearly. Thank you for your help.
    share tips

  8. 01/05/2011, aahe18 wrote

    After rolling over my 403b into a gold IRA and speaking with an agent about setting up a Roth IRA we got to talking about silver. He started telling me how silver was a great investment….little did he know I had been buying silver for years. He asked the question “I never really understood why people trade their assets into dollars.” Short of the obvious it posses a great question.

Commenting on this article closed

MoneyWeek magazine

Latest issue:

Magazine cover
A new dawn for energy

Our experts pick the stocks to buy

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues
Shale gas 'fracking' promises to transform Britain's energy market. Find out what it is, what it means, and how to invest.

More from MoneyWeek

FREE REPORT:
What you should really do with your money (2014 Edition)


How to buy and sell penny shares

A beginner's guide to investing in gold

How to invest in British fracking