Gold
bull market has a long way to go: Jim Rogers By Daniela Cambone
Of Kitco News | 17 September 2010, 11:23 a.m.
Singapore – Global commodities investor
Jim Rogers says gold’s rally and record prices are
a sign that money printing is starting again and the gold
bull run is far from over.
“The US has been giving the signal
that it is going to print more money and Japan has recently
said they are going to print more money – what is
happening is that money printing is starting again and the
market knows it,” he told Kitco News in an exclusive
interview on Wednesday.
Gold on Thursday extended the record highs
hit just three days ago. Comex December gold peaked at $1,279.50
an ounce early Thursday, a record for any most-active contract.
Spot gold hit a record high of $1,278.90.
A noted commodities guru, Rogers said that
a bubble will form one day for gold but it won’t be
any time soon.
Rogers recounted that a few months ago when
speaking to a room full of high-end money managers, they
were asked how many of them owned gold. “Seventy-five
per cent of the people had never owned gold, or silver.
So you can see most people still do not own gold. For most
people in the world gold is still an unknown entity,”
said Rogers, Chairman of Rogers Holdings.
During gold’s hysterical phase, which
Rogers said could take place in 5 to 7 years; everyone will
be buying the yellow metal, he said. In the interim, Rogers
said we will see more Asian banks buying gold, citing Bangladesh’s
recent purchase of 10 tonnes of the IMF gold.
“It is not the way people are supposed
to invest but they see something moving and they all want
to jump on. The gold bull market has a long way to go, all
commodities have a long way to go – in the end we
will end up with a hysterical bubble, at which point I hope
I am smart enough to sell (...) but that is years away,”
he said.
With spot gold currently hovering around
US$1275 an ounce, Rogers said he normally advises to buy
when prices are going down. “For somebody who owns
no gold, I would say go ahead and buy some silver. If you
desperately need to buy gold it is better to buy things
when they are going down not when they are racing high,”
he said. However, he added that everyone should own some
gold as insurance if for nothing else.
Rogers said that more money can be made
in silver than gold at the current prices.
“Gold is at all-time high and silver is still 60 per
cent below its all-time high,” he said.
He added that there is more money to be made in agriculture
than silver or gold. “There is going to be a lot of
money made in commodities yet, if people do their homework,”
he said.
On printing money
Rogers has been openly critical of printing
money as a means to solve the problem. He said allowing
failure is the better solution.
“When people fail, you let them go
bankrupt and start over. What’s supposed to happen
when people fail is competent people come in, take over
assets, reorganize the assets and start over, it is a painful
horrible process but it is the only way you can get it to
work.”