While the prices of many raw materials have dropped by 35% in recent months, investment guru Jim Rogers is still bullish on commodities. According to Rogers, “Commodities are the best place to be. Silver, rice, metals, natural gas or soya – it doesn't really matter, you've got to be in real assets at a time when currencies are being debased and governments are printing money.”Rogers also stated that price declines mattered very little, as corrections appear in markets from time to time. He said that drivers of commodities prices are emerging economies, especially China.
Supply shortages are also a concern for Rogers, which he believes will fuel surges in commodities prices in the future. “We've got supply shortages, and they are getting worse. There haven't been any gigantic oil finds since the 1960s and the International Atomic Energy Agency is telling people that reserves of oil are in steady decline.
“There hasn't been a lead smelter built in the US since 1969; the average age of farmers in America is 58, which tells us agricultural land could soon be neglected because not enough people are going into farming.
“Exports of gold from South Africa will decline because most of the mines there are very old and not enough new ones are coming on stream.”
Rogers is also bullish on water, stating, “I would not suggest you own water, because if you do, when things get really bad the politicians will sneer and say ‘You filthy, horrible capitalist, you are making money off people's God-given right to water.’ If you are lucky, they will hang you in the city square.
“But if you can solve the water problems, they will build a monument to you in the city square and you will be extremely rich.”
