Business

Why Jim Rogers prefers sugar or rice to Bitcoin

Jim Rogers, Author & Investor, says: “I am still long on dollar. I still do not know why. But I do know that whenever there is turmoil, any problem in the world, people turn to the US dollar. The US dollar is a bad currency. America is the largest debtor in history and it is getting worse. But most people think that when there is a problem, they need to own dollars. So, I own dollars. I hope that when the dollar goes up due to real serious problems, that I am smart enough to sell.”

Can I see the silver chalice? Can I see the silver coin? Hopefully more gold coins this time coming out of your pocket.
Jim Rogers: Well, I am very keen on India and I am very keen on gold and silver, but I do not own any Bitcoin and I never have. I do not see the purpose of Bitcoin. I know it is a trading vehicle, but I do not see any reason for me to buy or sell. I am not a good trader.

Unlock Leadership Excellence with a Range of CXO Courses

Offering College Course Website
IIM Lucknow IIML Chief Operations Officer Programme Visit
Indian School of Business ISB Chief Digital Officer Visit
Indian School of Business ISB Chief Technology Officer Visit

While we know your thoughts on Bitcoin, I just want to draw a parallel for the benefit of our viewers. Bitcoin was supposed to be an alternative to currency. It was supposed to be a better store of future purchasing power at a time when central bankers were just printing money, that was the promise of Bitcoin. But right now, Bitcoin and gold, both are rallying together. So, Bitcoin is risky, gold is safety. Why is that?
Jim Rogers: Well, I would be very happy if the world had alternatives to government money. But the problem is governments have guns and the governments are unlikely to say, okay, this is money. But if you want to use that money, you can use that money, we do not care, that is not the way governments think, certainly not in the United States. I do not think governments will ever give up their monopoly on money. I wish they would, but I do not think they will. So, I do not see much of a future for cryptocurrencies as money.

Gold is always supposed to be a hedge against inflation or a bet when the world is looking uncertain. But if I look at the current setup, macro setup, the US has averted a recession. So, why do you think gold is rallying when recessionary fears are over?
Jim Rogers: Gold is rallying because you and I are not the only people who know that there is inflation and that governments continue to print money. We have to use something to save ourselves. Gold and silver always have been protectors. And now, of course, many people are using Bitcoin. I am not using Bitcoin. I use gold. I use silver. If I were buying something today, I would buy silver. It is much-much cheaper than gold. But I am not buying Bitcoin.

You have been a long bull on agrarian commodities. You have been making a case that nobody wants to be a farmer, everyone wants to be an investment banker…. There you go. That is the silver chalice I was talking about?
Jim Rogers: Well, everybody I know wants to go to business school and be an investment banker. You are right. Very few people want to be farmers. Farming is a very attractive industry right now because nobody wants to be a farmer. Farmers all over the world are getting old and dying and retiring. So, agriculture has a great future. But some people prefer Bitcoin, not me.

I remember a conversation we had five years ago, you were bullish on rice. Then, you were bullish on sugar. So, if you have to talk about specific agrarian commodities, which commodities based on your understanding on demand and supply you are currently bullish on from the agri stack?
Jim Rogers: When I am looking at commodities, I look to see what is the cheapest. It is very easy. You see what is up and what is down and I start looking at the ones that are cheap. Yes, I mentioned sugar a long time ago. I mentioned several things because they were cheap. And I have found that when you find a commodity that is cheap compared to the others, you very often make money. I much prefer sugar or rice to Bitcoin.

You have also expressed your thoughts in the past on crude oil prices and your view was that the world is running out of oil. There is limited oil and there is more demand. China is guzzling. India is now a big buyer of hydrocarbons. Do you think the deck is now clear with the world normalising that in crude another bull market cycle could start and what is two digit right now could become three digit in coming months or years?
Jim Rogers: You can look out the window. Asia is booming and people in Asia use more and more energy, more and more oil and gas and that is going to continue. And while India and China and Asia use more and more energy, we are not finding more sources, more supplies. Nobody is finding the supplies. The known supplies of oil and gas continue to decline. So, I do not know what you will do with your money, but I would rather own hydrocarbons, oil, gas, coal than most other things because I know the world is running out and I know that much of the world is booming including India.

We are living in unique times when equity, gold, agri commodities – all are in a super bull run. But interestingly one of our researchers pointed out that cocoa prices have zoomed a fair bit in the last one year. Tell me, within the agri commodity basket and outside of rice and sugar, what else do you think would be a good trade?
Jim Rogers: Just about anything to do with agriculture. Cocoa is going through the roof. The situation in the world is that there are not many people who want to be farmers anywhere in the world for anything, whether it is cocoa or sugar or whatever it is. I know that the supply of agriculture is going to be under pressure in the next few years. People just do not want to be farmers. They should be, but they want to go to Wall Street. They want to go to the City of London. They want to go to Mumbai.

Look, when it comes to silver and gold, last year returns have seen double digit gains for both of these commodities.
Jim Rogers: Well, nearly all commodities are under pressure because of supply, because for the past few decades most people do not want to be miners or farmers. They do not want to get their hands dirty. So, the supply of most commodities is going to continue under pressure and demand. I mean, look out the window. India is a gigantic success. More and more people need to buy commodities.

When we spoke to you last, you said you were, and I repeat your sentence and your answer, you said, I do not know why, but I am long dollar. Are you still long dollar?
Jim Rogers: I am still long dollar. I still do not know why. But I do know that whenever there is turmoil, any problem in the world, people turn to the US dollar. The US dollar is a bad currency. America is the largest debtor in history and it is getting worse. But most people think that when there is a problem, they need to own dollars. So, I own dollars. I hope that when the dollar goes up due to real serious problems, that I am smart enough to sell. If you ask me where I am going to put the money, I do not know. I do not know what will be the new competitor for the US dollar. If you know, please do not announce it. Send me an email.

I wish I knew because right now everybody is debating what could be the next reserve currency. Now, you like to buy something which is out of fashion. You like to buy something which is cheap. China was cheap. China is cheap. But will China remain cheap and attractive?
Jim Rogers: Well, things that are cheap have a habit of getting cheaper and cheaper when there is a problem. I own Chinese shares. I have not bought any recently. I am looking. I am looking for Chinese shares, but I have not found anything recently that is new for me. Uzbekistan is certainly a cheap stock market. It is a new stock market. But I do not know many. Most stock markets, India, America, Japan, all these big stock markets are making all-time highs. So, there are not many cheap stock markets now, except maybe China.

Related Articles

Back to top button