“China is the next great country,” says our old friend Jim Rogers to the Agora Financial Investment Symposium crowd. “Of course, there will be setbacks, just as there were in the growth the United States. We had crashes on Wall Street and even a Civil War. But you still could have made a lot of money by investing in the United States. There will probably be real estate speculators going broke. Who knows what will happen? But the growth of China will be the single most important event of this century.
“And the best thing you can do for your children is to teach them Chinese. And make sure their money is not in dollars. The U.S. is now the largest debtor ever. We owe the rest of the world $13 trillion…rising at the rate of $1 trillion every 15 months. And even our friends are starting to think there is something wrong in the United States. Of course there is something wrong. And the few people who know what is going on don’t seem to care… the head of the central bank is on record saying that he will drop money from helicopters if that is what it takes. He doesn’t know much about economics. But he knows about printing money. He controls the printing presses…and he’ll run them as fast as necessary to keep the economy running. You better take him at his word.
“My little girls do not have American bank accounts, they have Swiss bank accounts. In 2003 bond market made its top…a big top…bonds are now a terrible place to have your money invested. I’m short bonds…
“And U.S. stocks have gone sideways for the last 10 years. You’re not going to make any money in stocks, in my opinion. We’ve had many periods when stocks go nowhere. We’re in one of those periods now… And sure, if you’re a good stock-picker, you can make a lot of money. But most people need a secular bull market to make any money.
“And we have a secular bull market – but it’s not in stocks; it’s in commodities. There are long bull markets in stocks…and then long bull markets in commodities. And these can last a long time. The shortest bull market in commodities lasted 15 years…but it could last much longer. This one will probably be around until 2020 and I’ll come back here and tell you to sell your commodities. And when I do, you’re going to say: “What…you old fool, don’t you know commodities already went up?”
“Whenever stocks have done well, commodities have done badly. Stocks did well in ’80s and ’90s…now it’s commodities that are doing well. Rogers International Commodity Index is up 471% since August ’98. There will be more setbacks of course, but commodities will keep going up. Commodities have done 15 times better than stocks in the past10 years…and they’ll continue to do better.”
“Which commodities would you buy now?” asked a listener.
“I’m buying agricultural commodities…they’re still way below their all-time highs,” was the reply. “Sugar, for example, is down 80% …and that’s not even inflation adjusted… That’s in nominal dollars. If you adjusted for inflation it would be down a lot more. You should pick up some of these little packs of sugar that they give you with your coffee. Put them in your pocket. Take them home.”
Markets and Money