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Jim Rogers Rotates From Gold To Rice, Sets Foundation For Next Bubble
During a presentation in Chicago yesterday, Jim Rogers may have well laid the foundation for the next bubble predicted by Zero Hedge in October, namely rice. His comments may have also spooked some of the weaker hands in gold, which has tumbled by $20 today, primarily on concerns what Chinese tightening may do to demand for the precious metal. Of course, how tightening is bad for commodities and good for stocks is one of those questions that can only be explained by the Fed's third mandate. From Bloomberg: "While gold “may go down for awhile,” the metal is “going to go over $2,000 in this decade,” Rogers, who owns gold, silver and rice, said today during a presentation to business executives in Chicago. Gold touched a record $1,432.50 an ounce in New York on Dec. 7. The price closed today at $1,387. “I’d rather own rice,” Rogers said. “I’d rather own something that’s more depressed than gold.”"
Rogers has long been bullish the MOO complex, and the recent surge in food prices merely validates his most recent predictions:
Agricultural commodities are “going to boom” as demand increases in developing markets, primarily in Asia, he said. All commodities will be supported by the weakening dollar, which is losing value because Federal Reserve Chairman Ben S. Bernanke is “printing money” by buying Treasuries in an effort to shore up the U.S. economy, Rogers said.
“Paper money is made of cotton, and I’m long cotton, by the way,” Rogers said. “One reason I’m long cotton is because Dr. Bernanke is out there running the printing presses as fast as he can.”
Rogers said he doesn’t own shares in U.S. companies and is short U.S. long-term treasury bonds. The Chinese renminbi may provide “almost sure profits over the next five to 10 years,” he said.
“In the future, it’s the stock broker who’s going to be driving the cabs,” Rogers said. “The smart stock brokers will learn to drive tractors, and drive them for the farmers, because the farmers will have the money.”
In the meantime, with the fundamental thesis that printing money will do little to strengthen the dollar unchanged, non-dilutable currencies of the precious metal variety are merely enjoying this latest shake out, which is certainly being welcome by banks like the PBoC which has the buying a few billions worth of gold to even remotely approach the actual (supposed) holdings of "sovereigns" like the GLD.
As for those who wish to catch the next bubble during the parabolic phase, we may recommend an early positioning in rice and its derivatives. And yes, rubber will be next.
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We know history. You can't reach the level of debt we have reached and just "muddle on". Collapse is imminent.
ZH has a lot of very well informed people on it. They aren't the fucking shoeshine boy. Take the contrarian stance at your own mortal risk.
I can think of $14Trillions reasons why things aren't gonna end well -- think the US Govt's gonna seriously cut spending this year? (I don't!)
Buy gold at $1250 near the bottom of this pullback; buy silver at $23 near the bottom of this pullback.
Now, looking for help here--if we face TEOTWAWKI (catastrophic social/economic/political failure), when does it happen, what is/are the catalyst(s), and is it a slow-to-boil or flash fire? If we don't face TEOTWAWKI, how bad will the meltdown, if any, be, how long will it last, and when do we know we are at bottom?
I figure that you cannot know whether and when to buy physical PMs or paper/electronic PMs unless you know the answers to these questions. If TEOTWAWKI, better buy physical only PMs and everything else--fuel, weapons, ammo, food, water. If not TEOTWAWKI, then paper/electronic PMs and such will be fine.
Why do ZH readers and posters all seem to think "the end is near"? Are you clued into something that 1000 times your number just cannot see? Is it their normalcy bias? Is it that they are lambs being led to slaughter by the political/corporate/financial interests of global hegemons?
If 99/100 ZH readers believe we face TEOTWAWKI in by the end of, say, 2014, does that not cry out for a contrarian view and action based on it?
check out the MOO/COW spread. MOO is the etf with all the major agricultural firms, so if you imagine that corporate America will make a fortune from world hunger, get on board. COW is the futures contract, one cattle one hogs. This is more in line with what Rogers usually preaches, which is own the commodity, not the company. Not sure why he likes MOO, but check out the relative spread during the 2008 crash. Short the MOO, long the COW.
If grains are going sky high I think I will stock up on a few cases of liquor because liquor is made from grain and is bound to go up.
Also bottled liquor will keep for many years, it can be used to trade for things or to bribe public officials and of course, if nothing bad happens and you don't need it for an investment you can always drink it.
And if Armageddon comes you can throw a hell of an End of the World party.
I call it my Armageddon Addahere strategy.
Looks like I will be picking up some nice Krugers on Monday, and I will get some copper on the side!
After that, going to stock up some Uncle Ben's...
Never thought it would be so straightforward as to rally up to $5k early this year...patience is needed, I will keep buying the shiny stuff and bury it away.
There's no shortage of stupid comments on this thread. Rogers is usually right, as a matter of fact, he is one of the most accurate forecasters I've seen. I've certainly done very well listening to him the past couple years and if anyone here took the time to actually look at his track record over the past, oh gee I don't know, 4 decades, you might be inclined to agree with me. Have fun being on the opposite side of a trade of him.
Why is everyone bashing him because he is saying to buy rice? He isn't bashing gold, he just understands that there is probably more profit to be made in something that is very depressed in price and well of its all time highs instead of something that was recently making all time highs. He expects agriculture to outperform energy, precious metals, and base metals this year and he will wind up being right again.
Perhaps in an even greater display of total ignorance are the people saying speculators drive up food prices. If you really think speculation causes long term price increases you are a moron. If the speculators are incorrect in their speculation, this is quickly corrected because there will either be a surplus or shortage if the price is not one where the supply/demand schedules intersect. Upon realizing this, the market will clear by adjusting the price and those speculators who guessed wrong will suffer losses. Speculators react to supply/demand conditions, they don't influence them. Let's see how great food production would be without futures contracts, how many people would take the risk of planting/harvesting certain crops without them. Furthermore, let's see how many people would be on the other end of a futures contact agreeing to buy products at a certain price without the ability to sell them quickly at low transaction costs due to a well functioning secondary market (which is where the speculators come in).
As I already pointed out Rogers has an excellent record as a diagnostician of historical trends. But he is the first to admit he is lousy at timing the market.
My guess is, he is right that gold has had its run and grains will be next. But I don't think gold is quite through going up even though grains have already started.
Bottled liquor is a good thing to stock as an inflation hedge and if grain goes up, everything made from grain will go up including liquor. And, if the PTB decide to hike taxes, alcohol and tobacco are the first things they look at.
As far as speculators driving up prices goes, they may not be able to control the price permanently but they can sure push it around in the short run. Look at the way they ran oil up to $140 and back down again a couple of years ago.
So oil prices were all due to speculators? I'm amazed that somebody could say that with certainty.
Jim Rogers REUTERS 2011 INVESTMENT SUMMIT ~ He's in the top 5, very, very smart.
http://www.youtube.com/watch?v=7hDxPg-DIn0
http://www.youtube.com/watch?v=_pTZonTbqzE&feature=related
http://www.youtube.com/watch?v=cVP4Fkin9t8&feature=related
http://www.youtube.com/watch?v=6wX4tGO8KHw&feature=related
http://www.youtube.com/watch?v=Pn2c0-8clm4&feature=related
The problem with investing in foodstuffs is three fold: 1) farmers respond to high prices by producing more, 2) people change their diets, and 3) it doesn't store well. As a store of wealth agricultural commodities suck.
I remember a few years ago there was another CB that hiked rates when everything was in bubble territory just like the Chicoms are doing now.........
“In the future, it’s the stock broker who’s going to be driving the cabs,” Rogers said. “The smart stock brokers will learn to drive tractors, and drive them for the farmers, because the farmers will have the money.”
http://www.youtube.com/watch?v=wYuLjGQQ-jg
The Business of Climate Change Conference 2009
Rogers has owned rice for more than several years. His fund was the first fund to really enter the rice market and hold long positions and keep rolling them forward. He likes the rice, now, because he believes grains are going higher and rice hasn't seen as much of the upward move that the other grains have seen. The current prices of grains on a per bu basis are $14.22/bu for beans, $7.73 for wheat, $6.48 for corn and $6.14 for rice, this shows why Rogers likes rice, it is the cheapest of the grains, Rice acreage is easily moved to beans, wheat, corn or cotton so rice s/d situation could easily tighten and cause a sharp rally, which may be what he is trying to take advantage of. Rice open interest is around 18k contracts which is just a little small for a lot of the funds but it has been growing lately and if it breaks through the 20-22k level we seem to see much more funds enter into the market. cbtrice
Well, at this rate, ROGERS will be owning PEOPLE, because they are really Depressed rite about now behind this economy! I dont like Rogers as much as i used to. He is a Lame Duck trailing a beat behind the Economical Trends. He is just coming off the GOLD STANDARD (late). Now, he is pushing FOOD/CROP STAPLES ala RICE (damn near 4 years LATE)! We shoulda been in BRAZIL (one of the BRICS) long ago. Next week he will wake up and smell the COFFEE and start hyping that (Late Again)! Sheeesh!
Listen, its CASH that is KING (still). Thatz where we need to put our, er, um, MONEY. We are in a DEFLATION rather than an INFLATION as everyone keeps tryna get us to believe. The CPI is up near 220 for godsakes! A RECORD! Its a BUBBLE if ever there was one. Consumers/People are only now just beginning to increase their SAVINGS RATE (up to approx. 5% from 2%) which is still not that much but a finger pointing in a new direction: CASH. Cash is something most Amerikans havent had time to familiarize themselves with in a long time. They havent had any. They have been using CREDIT CARDS for so freaking long! Its ridiculous. People use credit cards to buy KRISPY KREME DONUTS (if you are using a credit card for that maybe God is tryna tell you something)!
GOLD is in its Bubble Phase. So is SILVER. FOOD is about to Starve. Get into CASH and stay there. The more DOLLARS you have during this coming CURRENCY COLLAPSE the better!