Commodities to return: Rogers

Jim Rogers

The global commodities market is about to make a comeback after years of price declines, which have devastated the food and metal markets around the world, according to billionaire American investor Jim Rogers.

Rogers, in an e-mail interview with the JoongAng Ilbo from Singapore, where he has recently moved to teach his children Chinese, stressed now is time for investors to return to commodities, and warned them to stay away from U.S. currency.

He emphasized that some of the world’s massive government stimulus packages is likely to flow into the commodities market at a quickening pace.

Q. Prices of major commodities like oil, copper and wheat have rebounded so far this year. Do you believe the commodities market has hit bottom?

A. It has hit bottom. But all markets consolidate, so there will be more corrections in the future. If the world will now get better, commodities are the place to be. If the world gets worse, commodities will suffer less.

Oil prices, which sunk from $147 a barrel to some $30 a barrel last year, have rebounded to the $50 mark this year. Do you think this recovery is stable?

The surprise for many will be how high the price of oil stays and how high it goes, since the world is running out of known oil reserves.

The International Energy Agency’s recent study shows the world’s known oil reserves will be all gone in about 20 years unless something major happens soon.

What about the price of gold? It’s falling as global financial markets show more signs of recovery.

Yes, that is perhaps part of the reason for the change.

Another reason is the IMF is trying to sell its huge gold holdings and the market is declining in anticipation.

The United Nations has repeatedly warned of a constant shortage of grain. Do you think the price of grain will rebound?

The world’s food reserves are the lowest in decades, so higher prices will occur.

What investments look most attractive and least attractive to you right now?

Commodities are the best place to be if the world economy is going to get better, as the supplies are declining.

Those who have British pounds should also sell. And the U.S. dollar is a terribly flawed currency that will decline for years.

By Lee Hee-sung [hawon@joongang.co.kr]