Jim Rogers: commodity prices will continue to rise over next 20 years

11:28, October 26, 2009      

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Jim Rogers: Renminbi may replace the U.S. dollar

"All commodity prices will rise, gold, silver, copper and even cotton," Jim Rogers, world investment master said at the Global Economic Revival and Chinese Capital Market Summit Forum held in Xi'an on October 23. "The whole world is starting to print bills. With clear signs of expected upcoming inflation, there is no doubt."

Rogers believes that the commodity market whose size is only second to the foreign exchange market will continue to rise in the future for a long period of time. There maybe some changes during this time, but this period will last at least 18 to 20 years, thus becoming the best investment opportunity in the future.

Jim Rogers

The reason is very simple, in the past 25 years, there was huge investment in production capacity, and most countries were trying hard to improve productivity, which led to the unquenchable thirst for natural resources.

The agricultural products market is a more subtle market. Over the years it has remained at a relatively low price level. In some places there are fewer farmers, and the farming industry has been a declining industry. For 30 years this has been the case, and the majority of farmers have become women and children. However, the future prices of agricultural products will rise, and if there are natural disasters, nobody will know how much agricultural products prices will rise.

Mining will be no exception. All metal prices are up, and are also currently rising. Rogers said that the per capita oil consumption around the world varies widely. China's per capita oil consumption is 1/10 of Japan's. If China's per capita consumption doubles, it is still only one fifth of Japan's, but if this is the case, price increases would be unimaginable due to short supply.

Rogers explained that to promote economic recovery through currency devaluation may be effective in the short term, but in the long term it will be extremely hazardous. The U.S. central bank did not understand money nor understand the world economy. Rogers said the U.S. central bank wants to print more money to stimulate the economy, but the way the U.S. government spends money is not smart. "In the future this situation may be even worse, because they (U.S. government) may print notes faster."

By People's Daily Online
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