INTERNATIONAL. Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers has been talking about the recent 'upbeat' US economic data and bullish expectations for gold. He dismisses the first as "juicing up" the economy to win the election and calls for caution on the yellow metal.
Speaking to India's ET Now, Rogers said: "You have the American government spending staggering amounts of money right now, printing a lot of money and getting ready for the election".
"You have to remember the election in America in November...they do their best to get the economy juiced up so they can win the election," he added.
Rogers has been warning that the problem of too much debt can't be solved by more debt and that the next recession will be worse because the debt is going through the roof and in his words "we're shooting our bullets."
Rogers has long distrusted the Federal Reserve and the monetary policies it has been pursuing, claiming that "everything is worse instead of better."
The legendary investors' solution? "Let people go bankrupt. Let the system clean out and start over."
"2013 and 2014 are what I am most worried about because this year everybody is trying to just get through the next election...Everybody is going to do their best to get us through the election. Watch out for 2013, Rogers told ET Now.
When asked specifically about gold, he presented a more cautious view.
"I own gold and I am not selling gold by any set of imagination," he said, adding that if the yellow metal rose in 2012, that would make it 12 years in a row that it would be going up. "That is very unusual for any asset."
"It would not surprise me if gold continues to consolidate. Maybe by the end of the year, it will start rising again and maybe even have another up year in 2012, but gold needs to continue to consolidate," the renowned investor said.
"I want it to consolidate," he added, stressing that this would be best for the metal in the long-term as it will would allow it to rise higher.
Gold traders are the most bullish in two months. Eighteen of 23 surveyed by Bloomberg expect the metal to gain next week, the highest proportion since November 11.
Spot gold prices dipped to US$1,637 an ounce this morning London time – a 1.4% fall from Thursday's high.
Bullion rose 10% last year on the Comex in New York, beating the 1.2% drop in the Standard & Poor’s GSCI Total Return Index of 24 commodities and the 9.4% decline in the MSCI All-Country World Index of equities. Treasuries returned 9.8%, Bloomberg reported quoting a Bank of America Corp. index.
U.S. Gold Corp Chief Executive Rob McEwen said he expects global financial worries to push gold prices above US$2,000 an ounce in 2012 and much higher in the next few years.
"It's on its way to US$5,000 in the next three or four years," McEwen said, stressing that the retreat in the gold price last year was mainly because of the European debt crisis.
"We feel the market is once again comfortable with gold," says Scotia Mocatta's latest technical analysis report, "but will liquidate on a break of US$1,605."
As for base metals, Rogers told ET Now to expect them to do better "because you have these elections and government spending and printing a lot of money."
"I am not selling any of my commodities and certainly not my base metals. They were probably among the worst performers in 2011. They are overdue for a nice rally," he added.
Rogers reckons commodities stand to benefit whether the economy recovers or not.
If the world economy gets better I'm going to make money in commodities because demand will rise and because of the shortages, he says
If the world's economy doesn't get better I'm going to make money in commodities, because "they are going to print a lot of money and you need to own real assets when they print money."
About Jim Rogers
Jim Rogers has spent a career being one step ahead of mainstream investment thinking. Amongst his many accomplishments, Rogers was co-founder with George Soros of Quantum Fund. During his ten years with the fund, the portfolio gained more than 4,000%, while the S&P rose less than 50%.
Rogers retired from Quantum in 1980 and became a guest professor of finance at Columbia University Graduate School of Business and in 1989 and 1990, the moderator of The Dreyfus Roundtable, The Profit Motive with Jim Rogers, and a media commentator worldwide.
But ask Jim Rogers about his most important venture and he will answer without hesitation: fatherhood.
A Gift to My Children: A Father's Lessons for Life and Investing (RandomHouse, 85 pages, US$16) is Jim Rogers' love letter to his daughters, Happy and Baby Bee. Reminiscent of The Autobiography of Benjamin Franklin, which was also written by a father to his child, Rogers' book is full of no-nonsense, unsentimental fatherly advice.
Among Jim Rogers' best advice:
-- Conduct your own research and trust your own judgment.
-- Focus on what you yourself love.
-- Be persistent.
-- Broaden your horizons and see as much of the world as you can.
-- The most important thing you can learn is how to think and question everything you hear.
-- Study and learn from history.
-- Master more than one language - and make sure one of them is Mandarin.
-- Don't panic.
-- Take care of yourself and don't neglect the sunscreen.
-- Remember that boys need girls more than girls need boys.
Underscoring his convictions that future prosperity will come from China, Rogers' two young children speak Mandarin.