The Current State of the Commodity Asset Class: A Discussion with Jim Rogers

Where will the price of oil be in five years? I don’t know Alan, you’re a commodities broker, you’ve been around markets a long time, I know it’s going to be higher than today, exactly how much higher I don’t know

There is not much inflation at the moment. Energy is the single most important commodity for everybody in the world, nearly everybody in the world depends on it. Can there be deflation? Of course there can be deflation but when you have people printing a lot of money that, nearly always throughout history, led to inflation and led to higher prices. I suspect it will again. I don’t think that the world has changed so dramatically that money printing doesn’t or might not lead to inflation. It may not be the next day, but it always has led to inflation and I suspect it will again in the future. Especially once oil prices start going up again. We have discussed, they will go up again and why they will go up again. Once that happens you’ll see higher prices for nearly everything.

I was actually pessimistic about the Dollar for a long time but over the last couple years I changed my view on the Dollar. The Dollar is a terribly, terribly flawed currency. It’s got horrendous problems and I believe in my children’s lifetime and maybe even in my lifetime the Dollar is going to disappear as the world’s reserve currency. Because, the US is the largest debtor nation in the history of the world and the debts are going through the roof. Nobody seems concerned about it but you and me and a few other nuts like us. But since the Dollar is reputed to be the world’s safe haven, that’s the term that people use, there’s going to be a lot more problems in the world. We’ve already seen problems with the Yen, the Ruble, I can go on and on with currency problems.

The world is always changing and I assure you, if commodities are down a year from now for whatever reason you should buy more, not sell! Alan, supply and demand continues to get out of whack! The world has been consuming more oil than it’s been discovering for quite some time now and world reserves are going down except for fracking and fracking is short term reserves. And there is huge negative cash flow in this industry and this cannot go on.

Here’s the PDF

Special Discussion – The Current State of the Commodity Asset Class with Jim Rogers

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