Jim Rogers, legendary contrarian investor, author and chairman of Rogers Holdings, is still betting on $2,000 gold in 10 years and in the meantime is looking to profit from China, the euro and other commodities.
Rogers’ $2,000 gold target is nothing new but as gold prices have popped 11.8% year to date and the euro has fallen almost 14% against the U.S. dollar, a contrarian investor might sell gold and buy the euro. I spoke with Jim Rogers to see how he was positioning his portfolio.
What is your gold outlook?
Rogers: As far as I’m concerned, gold will go certainly much higher over the next decade or so. Governments all over the world are debasing money at a rapid rate and that has always led to higher prices for real assets throughout history and it will this time too.
Do you have a price target?
Rogers: I mean, I know the old high, adjusted for inflation, is over couple thousand dollars an ounce. I know it’ll get there over the next decade. It depends on how much they debase the currencies.
Rates are going to go much, much, much higher. I’m judging the world as it goes. I see that actions by governments all over the world are making it worse. So I presume that will continue and gold will go that much higher over the decade.
Did you revise your price target or outlook for gold [after] the European debt crisis?
Rogers: It’s all part of the same picture … most governments everywhere only know one thing and that’s to print and spend money that they don’t have … Whenever you do that, it debases currency, always has, and until I see some governments realize that they [have to] do something else, then I plan to own gold and other precious metals and other real assets.
What other precious metals do you also like?
Rogers: Silver is 70% below its all-time high, 60% or 70% below its all-time high. Gold is making all-time highs. I think people should perhaps look at silver, platinum, palladium. Palladium is also 50%—60% below its all-time high. Platinum is maybe 30% below its all-time high. Frequently, you’re supposed to buy the things that haven’t moved as much. And so I would be looking at the others if I were thinking about precious metals. But I own all four, don’t get me wrong.
Now at these levels, are you buying them all right now? Or are you just buying silver, platinum and palladium?
Rogers: I bought some silver recently [but I] have not bought the others recently.
But you’re not selling them either?
Rogers: No, it’s [going to] be a huge bubble in precious metals by the end. I don’t know when that will be; ask me in 2018, 2020 … Most long-term bull markets wind up in a huge mania, a huge bubble before it’s over and this one will too. Someday, everybody will own gold. Someday, people will be walking down the streets checking gold prices in front-shop windows. No, in the end, it’s going to be a huge bubble.
If an investor didn’t own gold right now, would you tell them it’s safe to buy right here at the top?
Rogers: I’ve said before, if I were looking at precious metals I would be looking at the ones that haven’t moved as much. If one doesn’t own gold, and one doesn’t want to buy the others for whatever reason, one should start waiting for some sort of correction and then buy some gold. But as I said, the others are much more depressed historically than is gold.
Do you like gold coins, silver coins, or are you looking at a different way of investing?
Rogers: I own coins and futures for all of them.
Moving out of gold, what else do you like right now? You bought the euro two weeks ago? How come?
Rogers: Well, the euro was so beaten down. Everybody in the world was pessimistic about the euro, including me. So I realized normally when there’s that kind of emotion in the market, it’s time to step in and take the other side. So I bought euro. I own the euro. I don’t know what I’m [going to] do with it. But I do own it at the moment.
Do you think that the EU’s going to survive?
Rogers: Well, I don’t think that the euro’s going to survive. Not at the rate they’re going now. I don’t think they’ll be around in 10 years. If the euro breaks up, it will probably put huge pressures on the EU, and it will probably fall apart too. It’s conceivable, you can get rid of the euro and still have the EU. But if the euro starts breaking up, it’ll be a lot of emotions and in that kind of a situation, the EU will probably break up too, which will not be good for the world.
Jim Rogers has taught finance at Columbia University’s business school and is a media commentator worldwide. He is the author of Adventure Capitalist, Investment Biker, Hot Commodities, A Gift to My Children, and A Bull in China. See his website.