Full Transcript:
TICKY FULLERTON, PRESENTER: Here is a commodities guru.
Jim Rogers is one of the world's biggest private wealth players.
He started life in the US, started the spectacularly successful Quantum hedge fund with George Soros in 1973, and in more recent years moved to Singapore to be amidst what he sees as the region of opportunity.
One of his many books is entitled A Bull in China.
He's in Australia, and I spoke with him earlier.
Jim Rogers, welcome to Lateline Business.
JIM ROGERS, INVESTOR, AUTHOR & COMMENTATOR: Thank you, Ticky. Nice to be here.
TICKY FULLERTON: Well it's a pretty chaotic world out there at the moment. The market thought Italy was going to collapse I think yesterday. Where would you be placing your money right now?
JIM ROGERS: Oh, Ticky, my money's mainly in real assets and commodities, especially agriculture. I own commodities, agriculture, gold and silver mainly.
TICKY FULLERTON: What about currencies? We see the Swiss National Bank and Bank of Japan scrabbling to protect their exporters. Would you look at the Euro right now?
JIM ROGERS: I own the Swiss Franc, I own the Yen and I own the Euro. I own all of them. I'm not selling any of them. I know I'm up against the central banks, but I'd rather be against the central banks than with them. They're nearly always wrong.
TICKY FULLERTON: But you're with the Euro because you're picking the bottom there?
JIM ROGERS: Well, no, I bought the Euro the summer of 2010 when it collapsed. I wouldn't buy the Euro right now, but I'm certainly not selling it.
TICKY FULLERTON: Let's go to the US. We've now got the market talking about a third stimulus. You don't seem to see a happy ending there, possibly even a US default.
JIM ROGERS: Well, I don't think you see a happy ending either. I hope you see how bad things are in the US.
There's going to be default. They may not call it default, they may just inflate the currency away. There are many ways that you can default without acknowledging it.
But, yes, America's the largest debtor nation in the history of the world. America has serious problems. They're not addressing them, they're not rectifying those problems. Things are going to get worse as America declines.
TICKY FULLERTON: You've now shorted a big US bank, we hear. Does that mean you see a significant risk of a collapse of a major?
JIM ROGERS: Well, finance is not going to be a great place to be, Ticky, for the next several years.
All those people who got MBAs made terrible mistakes. They should have been getting farming degrees or mining degrees. Finance is going into decline after a 30-year bull market, and farming after a 30-year bear market is going into a 30-year bull - you should become a farmer or a miner. If you don't like television, head out west and become a farmer.
TICKY FULLERTON: You are a great believer in agriculture, I know, and food security. Farmers have been hearing this in Australia for years, but they're yet to reap the benefits.
JIM ROGERS: Well, they're about to. You're going to see - you know, the inventories of agriculture products are near historic lows.
The world has been consuming more than it has been producing for several years now. We have a shortage of everything, including a shortage of farmers. So, hang on: there are going to be great fortunes made in agriculture in the next 20 years.
TICKY FULLERTON: There's no secret that you're bullish on commodities and on China. You're based in Singapore.
But China's growth of course depends on the well-being of its trading partners, the US and Europe. I think you've accepted that there is a property bubble in China. You've got no jitters about a hard landing though.
JIM ROGERS: Ticky, I'm worried about everything. I'm always worried about everything. Who knows how the world's going to evolve? I do expect China to pop its real estate - its bubble in urban coastal real estate.
Whether it's a hard landing or not, I don't know. America had many hard landings as it rose to power and glory. China will certainly have setbacks. There are always corrections in every market in the world. But I'd rather be long commodities than just about anything else and short, you know, things like the big bank and some other stocks.
TICKY FULLERTON: You’re also short of course in some other emerging markets, including India, I think. Why don't you buy the India story?
JIM ROGERS: Oh, India's a fantastic place to visit. If you could only visit one country, Ticky, go to India. But - well, the one statistic which is decisive in my case is the fact that India now has 90 per cent debt-to-GDP.
The studies show when countries get to that level of debt, it's hard for them to grow unless something miraculous happens because most of their efforts are spent paying off old debts.
TICKY FULLERTON: Given that you do have this very strong view on commodities, both metals, mining and agriculture, I want to ask you about Australia, because we've got a very open view on foreign investment when it comes to land and companies in agriculture and mining.
We also have no regulation in terms of buying land if it's under about $230 million. Do you think that that, from a nation's point of view, is the right way to go, or do you think we are literally going to sell the farm?
JIM ROGERS: No, absolutely it's the way to go. Look at America: America became a great and hugely successful company - country because it was open to immigration, to brains, to ambition and to capital and to new ideas.
Nearly everybody in Australia's an immigrant. I would open the doors even more. There's nothing wrong with immigrants. They have ambition and drive. You know, they always are good for a country. Look at, Ticky, you're an immigrant, everybody in your family's an immigrant.
TICKY FULLERTON: I am.
JIM ROGERS: Look what you've done for Australia.
TICKY FULLERTON: Alright. But you essentially believe that foreign investment is a good thing rather than a drain on a country?
JIM ROGERS: I think investment is a good thing, whether it's foreign or domestic. I mean, investors are here to make things better, they're not here to make things worse.
TICKY FULLERTON: Where do you see - back to Europe for a moment: where do you see Europe ending up with the current level of economic crisis?
JIM ROGERS: Going to be more crises and more bankruptcies coming in Europe. They've got to make those countries face reality, make Greece go bankrupt, accept reality, take big losses and start over.
Until they do that, they're just playing a charade. It's not going to do any good. It's going to make things worse in the end.
TICKY FULLERTON: Finally, Jim Rogers, where do you see the safe haven of gold? Where do you see the gold price heading and over what time?
JIM ROGERS: I own gold, Ticky; if it goes down, I'm going to buy more. I don't see any reason to sell gold until it winds up in a big bubble. That may be 10 years from now. I don't know when it's going to be. All commodities are going to go up a great deal more, including gold. Don't sell your gold, Ticky. If it goes down, buy some more.
TICKY FULLERTON: But do you reckon over $2,000?
JIM ROGERS: Oh, absolutely over $2,000 in the next few - maybe - probably not this year, I hope not this year, but certainly over this decade, no question.
TICKY FULLERTON: Jim Rogers, it's very special to have you with us. Thank you so much for talking to the program.
JIM ROGERS: Thank you, Ticky. My pleasure.
