Commodities still hot

Investing guru Jim Rogers was in Chicago in this week talking about, what else, commodities. He is still bullish on commodities but little else as Rogers told a crowd of invited guests of Price Asset Management that the 30-year bull market in bonds is coming to an end.

Surprisingly, Rogers said that he was long U.S. dollars though he pointed out that is was a short-term position and he views the dollar as a flawed currency. In fact, Rogers added that he never saw a time when so many currencies appeared in distress and wasn’t prepared to offer an alternative currency, instead advising the attendees to invest in real assets.

Rogers of course designed the Rogers International Commodity Index (RICI), which he pointed out has outperformed competing commodity indexes.

Though not naming him, Rogers sharply criticized Federal Reserve Chairman Ben Bernanke saying, “he does not understand economics, he understands printing money. It is not the right thing to do,” Rogers said before joking, that one of the reasons he is long cotton is because it is used to make money and he expects a lot more money printing.

Rogers is pretty pessimistic on the global economy but is bullish commodities regardless of how it turns out. Rogers says a recovery would mean greater demand while a further economic decline would mean governments would continue to print money increasing the value of commodities.

When asked whether all this quantitative easing and money printing would cause inflation, Rogers responded by pointing out there already has been quite a bit of inflation in the United States and criticized the way the Bureau of Labor Statistics calculates its numbers. “It should be criminal. Prices are going up except in the Bureau of Labor Statistics, it is here and it is going to get worse.”

He was asked if he agreed with famous short selling hedge fund manager James Chanos’ sell recommendation on China. He does not. Rogers expects China to experience some ups and downs but added that as the 19th century was ruled by Great Britain, the 20th by the United States, China will be the great power of the 21st century.

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