Jim Rogers On Dollar, Gold, Stocks, Sterling and More

Jim Rogers was a guest on CNBC's Closing Bell with Maria Bartiromo today.

On the Dollar, Rogers said:

• the Federal Reserve has run out of bullets and we don't have enough trees to print any more money.
• the dollar will probably have a short-term rally just because everyone is so bearish on it now.
  

On gold (Gold charts and GLD charts), Rogers said:

• Gold will reach $2,000 per ounce by 2019, about 6% a year gain.
• Gold's recent surge (to $1,351.50 Current Gold Quote) is due to large budget deficits
• Gold will power the great commodities run that he thinks will last for the next decade.

General comments by Jim Rogers.

Rogers has correctly been bullish on commodities over stocks for the past decade.

Rogers would rather own agriculture, silver or palladium over gold or copper since silver is still 70% below its all-time high.

Become a farmer. Learn to drive a tractor. We have a shortage of farmers.

Water is a spectacular opportunity.

He is skeptical of the economy going forward and the US market is up 70% so he'd not put money into US stocks. If the economy recovers, he feels his commodities will go up anyway.

He is not buying any stocks because they are all going up but he still owns some stocks in China.

"China churns out 15 or 20 times as many engineers as we do, every year." What Jim fails to mention is many of those "engineers" might be auto mechanics and other technicians here because they are not all design engineers. Still, even twice as many design engineers is a big deal and I think the rate is much higher.

What to avoid according to Rogers:

Jim says to avoid US Long-term US Treasury Bonds. He sees it as the next bubble since "everyone" is buying US government bonds. (except for me. I sold ALL my bonds and bond funds that are not indexed to inflation in my personal accounts and the portfolios I cover in "Kirk Lindstrom's Investment Letter.")

Jim sold all his British Sterling after holding it for 30 years. Jim said "it grieves me to see what is happening in the UK."

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Past Jim Rogers articles of note:

• April 2009: Rally will fail.
  Jimmy Rogers comments on the bailout of Wall Street and his belief that we made a bottom but it is not the final bottom.
  
  
• March 2009: Jim Rogers Bearish, Likes Land on Larry Kudlow's "The Kudlow Report"
  "I don't think the bottom is here, maybe 'a' bottom, but not 'the' bottom. The economy is going to get worse. You can't have a good stock market without a good economy."
  
  
• November 2008: Jim Rogers Covers Shorts
  When asked where to invest, Rogers said China. He admitted he did not take any profits in China before the crash but thinks investing in China now is like investing in the US 100 years ago.
  

Jim Rogers: Rally Will Fail, Likes Agriculture and Comments on Financial Bailout

In this video interview with Maria Bartiromo, Jimmy Rogers comments on the bailout of Wall Street and his belief that we made a bottom but it is not the final bottom.

He says 300 Million Americans are keeping just a few rich.

"We had automobile companies, airlines, retailers going bankrupt for hundreds of years. We still have cars, we still have planes, we still have shops. What do you expect them to say? Of course they say there is systemic risk, then they panic Washington and say 'give us more money'. And they keep their Lamborghinis and their houses.

That is not the way is supposed to work. 300 million Americans are propping up a few guys so that they can keep their Lamborghini's. Its outrageous economics and morality....."

Jim Rogers said the global capital markets haven’t reached “the final bottom” yet which echos the sentiment of fellow bearish investors Marc Faber and George Soros, who predicted earlier this week that the stock-market rally will falter.

Here is a video of Jim Rogers saying he is only buying more commodities and agriculture. He says commodities have done the best with some up 20 or 25%. (I guess he missed my buy of FNSR at 24¢ that more than doubled.)
========================================================================================
During the interview
DJIA = 7690 & S&P500 = 806.31
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Jim expects inflation since banks are printing money all over the World which "always ends up in higher prices."

Jim wants to see the governments let the financials go bankrupt and not throw good money after bad money.

Jim says the ONLY stocks he has bought in the past year are in China and he bought last year but he is not buying any today. He thinks America is spending money on "make work" projects that are not the way to go.

Jim thinks farmers (Agriculture products) will be the "most successful sector" for the next 20 or 30 years. He thinks power will shift from financials to people who actually make things. He told Maria to get herself a tractor. If everyone did that, it would be good for Deere and Caterpillar.

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Jim Rogers Bearish, Likes Land on Larry Kudlow's "The Kudlow Report"

Jim Rogers, the investor who had co-founded the Quantum Fund with George Soros, said on Larry Kudlow's CNBC show "The Kudlow Report" that U.S. stocks have yet to hit their bottom in this bear market. Rogers said there could be no lasting rally until the economy recovers.

Rogers told Larry Kudlow that he is still solvent and he believes the fundamentals for commodities are getting better.

Rogers said the firm he is a director of is buying farm land in Canada and Brazil.

Rogers says Geithner and Bernanke "don't get it."

Kudlow asked about the dollar. Rogers said this is an "artificial rally in the dollar" due to short covering.

Rogers mentioned President Obama raising taxes on energy and capital. He made fun of the "Geniuses in Washington" who are going to raise taxes on capital and energy, something he says there is a shortage of.

Earlier today Rogers told Reuters he was unsure where to invest but he thought the US dollar was "terribly flawed" and we would not have a lasting recovery the government is not allowing failing businesses to go bankrupt.

• "I don't think the bottom is here, maybe 'a' bottom, but not 'the' bottom. The economy is going to get worse. You can't have a good stock market without a good economy."

• "I want to get out of the U.S. dollar sometime this year, at least I plan to, because it's a terribly flawed currency."

• "I don't know where I'm going to wind up putting my money. But at the moment I'm doing nothing but watching. I may just have to wind up putting it all in commodities because commodities are the only thing (whose) fundamentals are being enhanced."

I recommend a "core and explore" approach to investing. This means you place 80 to 95% of your assets in one of my core portfolios made up of index funds from Vanguard (or Fidelity). Then you invest the remaining 5 to 20% in my explore portfolio which is mostly invested in volatile, individual stocks. My newsletter stocks are volatile by design to add to overall returns via rebalancing (taking profits when the stocks are up and buying the stocks back when prices are down, but you need a good core portfolio to sleep well at night.

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Jim Rogers Covered His Shorts

Jim Rogers was just on CNBC talking about the markets. Rogers said he covered his shorts last month. In the past, Rogers said was short the financials.

Jim said he hopes president elect Barack Obama will not raise the tax on capital gains at a time when capital is scarce. He postulated that only an idiot would do such a thing at a time like this and Senator Obama may have said this only to get elected.

When asked where to invest, Rogers said China. He admitted he did not take any profits in China before the crash but thinks investing in China now is like investing in the US 100 years ago. He said he has been investing in China since the 1990s. His belief is there will be major ups and downs in China but that is where the huge growth will come from so he is there for the long term.

Shanghai Stock Exchange Composite Index
1990 to today

They pressed him to recommend one US stock to buy. Jim said he was buying airlines but paused and said they were international, not US based. Pressed again he suggested his commodity fund then said he owns US utilities and will probably buy some more of those.

If I missed anything Rogers said, then please post it in our comments section.

More articles about Jim Rogers:

• Jim Rogers Expects Inflation; He's Long Silver and Short Long Term Treasuries

• Jim Rogers Says Massive inflation is Coming

Jim Rogers Expects Inflation; He's Long Silver and Short Long Term Treasuries

Jim Rogers says he expects the actions by governments around the globe to save their economies will cause inflation and crash the US dollar. As such, Rogers is short long-term US Treasuries (US Treasury Rates at a Glance) and long silver.

Rogers has a good long-term record. For one, he has been short the banking stocks this past year as they have crashed and burned. Rogers was also a co-founder with George Soros of the Quantum Fund. " During Roger's ten years with the fund, the portfolio gained more than 4,000%, while the S&P rose less than 50%.

Today "Business Intelligence - Middle East" reported in "Jim Rogers says get rid of dollars, buy silver " the following quotes from Rogers speaking to a group of private bank clients:

• "The fact that the dollar is gaining rapidly is only temporary"
• "Within a year you'll have to get rid of the dollar"
  

Rogers also said US government bonds are extremely overvalued.

• "They are "the world's last bubble."

Rogers explained that government economic rescue plans will force governments to issue more debt, print money and flood the markets with liquidity which will flare up inflation after the crisis is over and create worse problems.

Rogers says "zombie banks" kept alive by Paulson and Bernanke should be allowed to fail. He compared it to Japan which refused to let banks fail in the 1990s.

• "It's 18 years later and their stock market is 75% or 80% below what it was 18 years ago"
• "I know we are going to get aggressive rate cuts everywhere, that's why I'm long short-term government bonds in the US, but shorting long-term government bonds because it's not going to help, it's going to add to inflation."
  

Rogers expects investors to return to precious metals as a hedge against inflation.

• “Silver will do better than gold. It’s been beaten down horribly. If you put a gun to my head and said you have to buy one, I would buy silver rather than gold.”

Rogers think gold may fall as central banks and the International Monetary Fund (IMF) sell the metal to raise cash.

• “The IMF has gigantic amounts of gold. Maybe gold is going to go down for a while. If gold does go down, I’m going to buy more.”

Another way to hedge against high inflation is to buy TIPS or Treasury Inflation Protected Securities.

I recently bought Vanguard's TIPS fund (VIPSX Charts) which, like Silver, is down about 30% from its peak set earlier this year. As I describe on page 9 of the November 2008 issue of "Kirk Lindstrom's Investment Newsletter," I like to triple diversify the fixed income side of my asset allocation into

1. Bond funds that do well when rates fall,
   
2. Cash, CD and Treasury-Bill ladders, Money Funds and quality short-term bond funds for current income
3. I-Bonds and TIPS for inflation protection.
   

By having three fixed income buckets, I can rebalance after one of the buckets has a period of out performance. For more on that strategy, see " Using Asset Allocation to make money in a Flat Market."

Post your Comments on this story here

For more, see:

• US Treasury Rates at a Glance
  
  
• World Stock Markets at a Glance
  
  
• ECRI WLI Growth Rate Plunge Continues to New Record Low
  
  
• Best 1-Year CD Rates with FDIC
  
  
• I-Bond and Series EE Bond Rates for November 2008

Jim Rogers Says Massive inflation is Coming

In this Oct. 24, 2008 Bloomberg interview, Jim Rogers predicts massive inflation is coming.

• We are going to have an inflation nightmare.
  
• Whenever people have printed a lot of money, six months to two years later, you have terrible inflation.
  
• People all over the world are printing money like mad.
• Massive inflation is coming and the only way to protect yourself is to be out of paper assets and in hard assets like gold and other commodities. (US Treasury Rates)

Jim says he is currently in short term treasuries but expects to get out soon and go short more government long term bonds.

He also says commodities are still in a bull market, he has used this downturn to add to commodities, especially gold, and he expects to make the most money in agriculture in the years ahead.

YouTub Video: Oct 24 Bloomberg Interview.

Jim is buying commodities and Swiss Francs.

Jim says we should abolish the US Federal Reserve and the guys on Wall Street with the fancy cars need to learn to drive tractors and the farmers in the years ahead will be buying the fancy cars.

Jim also showed two gold coins he bought in Zurich. The woman interviewing him said individual investors are having a hard time getting gold coins to which Jim said that is often the sign of a top.

"There has been a run on gold..... The public, the odd lotters, are sometimes the last ones in.

Jim says Paulson, Bernanke and the "idiot at the NY Fed" are never right and making it worse because they are not letting people/banks fail. Jim thinks they could turn this into another depression. Jim brought up what happened in Japan and blamed it on not letting banks fail in Japan.

Jim, didn't Japan have massive deflation during that period where they let banks mark assets to market to show they failed?

Jim says "propping people up has never worked in the history of the World."

Jim says the competent people should be taking market share from the incompetent, but we are seeing the reverse due to government interaction. Banks that make bad loans are getting more money from the governments to make more bad loans rather than let them fail.

Jim says the inventory of food is the lowest in 50 years. There is a shortage of farmers, tractors, tractor tires, seeds, etc.. Too many stockbrokers, journalists and investment bankers.

Jim says the bottom in equities will come when the market goes up on bad news.