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Old 11-05-2008, 02:44 PM
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Default Jim Rogers says he'll buy gold at US$750

Friday, May 9, 2008

By Feiwen Rong & Patricia Lui, Bloomberg

SINGAPORE -- Investor Jim Rogers said he will buy more gold and base metals if the recent sell-off persists.
"Gold is in a correction right now," Rogers, who co-founded the Quantum fund with George Soros in the 1970s, said at a press conference Thursday in Singapore. "I suspect it could go down to US$800, who knows, or US$750. I'm terrible at market timing, but if gold goes down some more, I plan to buy some more."

Commodities are in their seventh year of gains, with oil rising to a record US$123.93 a barrel Wednesday as demand exceeds curtailed supply from Nigeria to Iraq. Output shortages have pushed wheat, rice, corn and soybeans to all-time highs. Still, gold fell more than 15 percent from a record US$1,032.70 an ounce March 17, while nickel and zinc are down 45 percent and 50 percent from highs in 2007 and 2006.

"I've started to think about buying base metals," Rogers said. "I'm not buying base metals yet but I've noticed some of them are down a lot and if they continue to consolidate, I will probably be buying base metals."

Commodities have outpaced stocks and bonds this year, spurring pension funds and other investors to increase holdings.

The UBS Bloomberg Constant Maturity Commodity Index of 26 commodities has returned almost 20 percent this year, while the Standard & Poor's 500 Index of stocks has fallen 5.2 percent. U.S. Treasuries have returned 9.2 percent, according to Merrill Lynch & Co. indexes. The Rogers International Commodity Index has more than quadrupled since 1998.

"Oil in my view will certainly have to go above US$150 or even US$200 during a bull market," Rogers said. "This is not a short-term view. We've not had a major oil field discovery anywhere in the world over 40 years."

"Agriculture is going to be one of the most exciting growth industries in the world for the next 10-15 years," he added. "Conservative" agricultural banks such as Rabobank NV "will have their sun now," he said.

Rice prices have to go much higher before supply rises, he said. Rice at times "in the dark recesses of history," adjusted for inflation, was much higher than now, he said.

Inventories are "very low" and "nobody's becoming a rice farmer these days," Rogers said. "Young Chinese haven't gone into rice farming in the last 30 years. They've headed to Shanghai and gone down to the new stock exchange or commodities exchange and that's true in most parts of the world."

Dollar rally

Rogers also said too many investors are bearish on the U.S. dollar and the currency will have a "nice" rally.

The dollar has declined 4.9 percent against the euro this year as widening credit market losses and slowing economic growth prompted the Federal Reserve to cut interest rates to head off a recession. Since Rogers said in an interview on April 27 that he expected a dollar rally "about now," the currency has climbed 2 percent.

"I expect a nice rally in the American dollar because so many have been bearish on the American dollar including me," Rogers said at the launch of the Barclays Global Agriculture Delta Fund in Singapore earlier Thursday. "America is also a huge producer of agriculture and if I'm right about agriculture prices, which I think will go up a lot, that's going to help America compared to those countries which don't have agriculture."

The currency rose for a second day to trade at US$1.5345 per euro as of 10:20 a.m. in London Thursday from US$1.5392 in New York Wednesday. The yen, which Rogers said he has been buying, climbed to 103.97 per dollar from 104.73.

Rogers said in last month's interview that he was hoping the dollar rally would last a year, which would allow him to sell all of his U.S. currency. Today, he said he holds the currencies of commodity producing nations of Australia, New Zealand and Canada, which he expects "to do well."
"People who produce commodities when commodities are going through the roof will do better all other things being equal," said Rogers.

"The New Zealand and Australian dollar may get hurt if carry trades reverse," he said. I admit that I've also been buying the yen, but I'm not planning to sell my Australian dollars as they have a great future."

He added that the dollar is losing its status as the world's reserve currency and is increasingly being replaced by the euro, the yen and sterling. On a 20-year outlook, the Chinese yuan is a likely replacement.

"But the only thing I can see on the horizon which can replace the dollar is the renminbi, which is an absurd statement as it is a blocked currency, but this is a longer term horizon, maybe in 20 years or so," he said. "It cannot be the euro or the yen or the Swiss Franc."

Rogers expects U.S. Treasuries to decline due to inflationary pressures.

"I have sold long term U.S. government bonds," he said. "If the same thing happens as it always happens in inflationary times, then rates are going much, much higher, especially long- term rates."

Rogers said central banks may be effective in manipulating short-term interest rates "but they can't do much with long term rates."


Financial crisis not over


Rogers said the global credit squeeze triggered by U.S. housing-loan delinquencies may not be nearing an end.

"I doubt that we're half way through the financial crisis," Rogers, chairman of Rogers Holdings, said at the Barclays Plc press conference. "We certainly haven't hit the bottom as far as I'm concerned."

Rogers' comments contradict those by heads of Wall Street investment banks and by Soros, who Wednesday said the "acute phase" of the financial crisis is nearing an end even as the U.S. economy only now starts to feel the effect.

The world's largest banks and securities firms have posted US$319 billion of asset writedowns and credit losses since the beginning of 2007, and slashed 65,000 jobs in the past 10 months as the crisis deepened.

"Most of the European banks and Asian banks haven't taken a huge write-off yet," Rogers said. "I suspect there are more write-offs to come in Europe and Asia."

Rogers said he isn't buying financial stocks and is betting on a further drop in the share prices of U.S. investment banks, Fannie Mae and home builders as the global credit crisis reduces investor appetite for all but the safest assets such as U.S. Treasury debt, depressing stock and bond prices.

Still, stocks have rallied since JPMorgan Chase & Co., the third-biggest U.S. bank, agreed to buy Bear Stearns Cos. with the Federal Reserve's backing almost two months ago. The MSCI World Index has gained 10 percent since touching a one-year low on March 17.

Citigroup Inc. Chief Executive Officer Vikram Pandit said April 22 that the credit-market contraction is abating, echoing remarks by Jamie Dimon, his counterpart at JPMorgan, who said April 16 that the credit-market freeze is more than half over. Richard Fuld, chief of Lehman Brothers Holdings Inc., Goldman Sachs Group Inc. CEO Lloyd Blankfein and Morgan Stanley head John Mack have offered similar assessments.

http://www.chinapost.com.tw/business...Jim-Rogers.htm

Jim Rogers believes that there will be a bear market rally for USD.
What do you think?
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Old 11-05-2008, 07:24 PM
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aurictaurus aurictaurus is offline
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I sincerely hope that he'll never get the chance to do that again...
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Old 11-05-2008, 09:07 PM
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Don't we ALL want to buy gold @ 750 again? I wager that everyone in the world would be buying gold again @ 500 or lower. Especially if crude keep going higher and higher.

Rogers' standard disclaimer is always that he is the worst market timer on the planet. So who to believe?

Sinclair the ultimate gold guru or Rogers the index fund seller?

It's your money...... make your choice!
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Old 11-05-2008, 09:07 PM
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goldamateur goldamateur is offline
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Quote:
Originally Posted by aurictaurus View Post
I sincerely hope that he'll never get the chance to do that again...
why?
If gold drops to US$750,everyone in GCA forum can accumulate at lower prices
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“Paper money will ruin commerce, oppress the honest and open the door to every species of fraud and injustice”
— George Washington

“It is well enough that the people of the nation do not understand our banking and monetary system for, if they did, I believe there would be a revolution before tomorrow morning.” — Henry Ford
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Old 11-05-2008, 11:46 PM
GoldFinger GoldFinger is offline
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Quote:
Originally Posted by GoldBull5000 View Post
Don't we ALL want to buy gold @ 750 again? I wager that everyone in the world would be buying gold again @ 500 or lower. Especially if crude keep going higher and higher.

Rogers' standard disclaimer is always that he is the worst market timer on the planet. So who to believe?

Sinclair the ultimate gold guru or Rogers the index fund seller?

It's your money...... make your choice!
Don't proceed with the wager, not everyone in the world would be buying again. I know of a lot of people who still would not buy@ 500 or lower. (EVERYONE means every human being in the world)

If I'm greedy I would have wager you for some gold coins.
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Old 12-05-2008, 08:33 AM
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aurictaurus aurictaurus is offline
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Quote:
Originally Posted by goldamateur View Post
why?
If gold drops to US$750,everyone in GCA forum can accumulate at lower prices
You are correct, of course. Still, I'm not sure if my poor heart could take the strain of a correction to $750 or below. We'll all just have to ride out the volatility and see what happens.

I think in my own case, I'm pretty much fully vested as far as I want to go into pm's. Now that I'm no longer accumulating, my mindset has switched from buying to holding, so naturally, I want to see the value of my holding grow.

One thing I am doing while prices are down is gradually switching out some unallocated metal savings to physical. The fabrication premiums on physical (especially silver) are savage, so the lower the spot price, the better while I do this.
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