Jim Rogers: buy gold

Commodities guru Jim Rogers thinks the current oil price is a floor, not a ceiling – but his favourite picks are gold and silver.

910-Rogers-634

Jim Rogers: gold and silver are "going through the roof"

AR1

Jim Rogers, co-founder with George Soros of the Quantum Fund

Commodities guru Jim Rogers, who correctly predicted the supercycle in the late 1990s, remains keen on some raw materials despite recent turbulence in the sector. Today's oil prices should be considered a floor, not a ceiling, he told Germany's Focus Money. Longer term, prices will keep climbing, as all the world's known oil reserves are dwindling, while fracking and other techniques to extract oil won't offset this trend. Agricultural commodities, meanwhile, have been on the slide in recent years and look set for a comeback. But his favourite picks are gold and silver. They are "going through the roof".

Don't buy just yet, however. We are heading for a nasty economic downturn and a huge bear market in US-led global stocks, a consequence of the ongoing global build-up in debt since the financial crisis. When the crash comes, gold will fall at first, just as it did in 2008. The dollar will rise as global investors flee to the safety of the world's reserve currency. Once the damage to the US is clear, and investors remember America's huge debt pile and penchant for money-printing, demand for gold is likely to jump.

Longer term, the dollar is on the way out as a reserve currency, reflecting America's decline as the world's biggest debtor. Once the yuan becomes fully convertible, it will a credible alternative. "In my lifetime and I am 75 China will dominate the world economy," says Rogers, who is putting his family, as well as his money, where his mouth is. In 2007 he moved his family to Singapore so they can learn Chinese.

Recommended

Is the Australian economy weakening?
Economy

Is the Australian economy weakening?

Tighter monetary policy is weighing on several parts of the Australian economy, but commodities is providing some respite. Alex Rankine reports.
13 Aug 2022
Why now is a good time to buy diamond miners
Commodities

Why now is a good time to buy diamond miners

Demand for the gems is set to outstrip supply, making it a good time to buy miners, says David J. Stevenson.
12 Aug 2022
Is gold cheap relative to equities?
Gold price

Is gold cheap relative to equities?

Dominic Frisby looks at the Dow-gold ratio and explains why gold is starting to appear inexpensive compared to equities.
12 Aug 2022
Zhao Weiguo: China’s No. 1 chip tycoon vanishes
People

Zhao Weiguo: China’s No. 1 chip tycoon vanishes

Zhao Weiguo rode a decades-long boom in China pursuing Beijing’s core industrial policy of semiconductor self-sufficiency. Then he fell foul of Xi Jin…
5 Aug 2022

Most Popular

Are UK house prices set to fall? It’s not so simple
House prices

Are UK house prices set to fall? It’s not so simple

Figures suggest UK house prices are starting to slide, but we shouldn’t take these numbers at face value, explains Rupert Hargreaves.
11 Aug 2022
Is gold cheap relative to equities?
Gold price

Is gold cheap relative to equities?

Dominic Frisby looks at the Dow-gold ratio and explains why gold is starting to appear inexpensive compared to equities.
12 Aug 2022
Share tips of the week - 12 August
Share tips

Share tips of the week - 12 August

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
12 Aug 2022