Re: [Technical-Investor] Jim Rogers: Invest in agri commodities, not in gold

 

If someone wants to have a basic understanding of how gold i can give them a free lecture.

Gold is a store of wealth. Agri commodities are not. If you get the drift.

On Thu, Nov 12, 2009 at 9:51 AM, BALAJI Jayaraman <bctbalaji@gmail.com> wrote:

One more legendary investor sending similar signals on Gold..... After Marc Faber, Now its Jim Rogers.....

Mind you, just becoz RBI buys @ 1080-1100$ doesnt mean this will be the base & it cannot go lower. Sometime during May2009 this year, India bought $20-bn US treasury bills in just 6 months – to become among the top 15 lenders to the US after China, Japan & Russia. India's outstanding exposure to US government bonds rose from $18B in Oct '08 to $38B in March '09 and then even higher. I am assuming that RBI sold off this recent T-Bill purchase to fund Gold buying from IMF.  The move looks prudent as India needed assets as a buffer against sudden, destabilising capital outflows. According to the recent RBI release, the value of gold in reserves raised $484 million to $10.8 billion (4% of the total reserves held as SDR, foreign currency, Gold etc).

Is RBI right in its decision this time or is taking huge risk at High Market prices???? Hope it does not make similar mistake like buying US T-bills....And if Gold drops to 850-900$, it will be Double Whammy hit for RBI & India...

 

Will China/Russia/Brazil buy up the rest 203 tonnes from IMF??? – I doubt if China will do that @ such high market prices. China is now the world's largest producer of gold, and could buy its own output if needed. That would reduce its risk of exposure to the market prices that India had to pay last week. As such, the higher gold prices rise, the less likely China will be interested in IMF gold and the less likely the remainder of the sales will be completed off-market in 2009-10.

 

Anyways, we're still in the middle of a great big bull market that is not even close to exhausting itself. Negative real interest rates, poor rates of return on alternative asset classes, unprecedented government stimulus, rising sovereign deficits and debt loads, and quantitative easing have all combined to drive investors across the globe to seek a safe haven in shiny yellow metal.

 

Food for thought…

Excerpts of Jim Rogers article....

Jim Rogers: Invest in agri commodities, not in gold

2009-11-11 14:05:00hrs

Jim Rogers, legendary investor in global commodities, recently predicted that the bull run in gold is on and the yellow metal price could zoom to a record $2000 per ounce. But is he buying gold? Not perhaps. Why? Because what Rogers likes to invest is not in gold, but in agricultural commodities.

He said in a recent interview: "If you can tell me something else where the fundamentals are so attractive…I'd be happy to put my money there. But I don't know of any other place, other than agri commodities."

Jim Rogers had a war of words with economist Nouriel Roubini last week on the price of gold. While Rogers holds to his belief that gold price will fly higher, he is not keen to invest in gold at this high price. Instead, Rogers loves to invest in agri commodities in countries like China. And in agri commodities like maize, coffee, soybeans etc.

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