Investors should stick with commodities and even invest in things like farmland over the coming years for growth and safety, says noted commodities bull Jim Rogers.
Commodities prices may have dipped recently, but those declines were due in part to the bankruptcy of MF Global, a major player in the asset class.
Once MF Global accounts are liquidated and the market digests the company's failure, expect natural resources to continue climbing.
"I'm putting my money into real assets, things like commodities and natural resources because if the world economy gets better, I'm going to make money because of shortages and if the world economy doesn't get better, which is possible and maybe even probable, governments are going to print money," Rogers told Newsmax.TV in an exclusive interview.
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"When they print money, you need to protect yourself in silver or rice — you pick natural resources. That's how you protect yourself and possibly make a lot of money," Rogers said.
Central Banks in major economies have flooded their financial systems with liquidity to fight deflation and fuel employment, which tends to weaken currencies.
When paper currencies weaken, commodities often strengthen as a hedge.
"I happen to own all commodities, I own more of agriculture and precious metals than the others, but I expect them all to continue to do well. Commodities over the past 10 to 12 years have done much better than stocks, and I expect that to continue to be the case," Rogers adds.
Gold has risen for 11 years and is due for a correction but don't abandon the asset, as a correction does not signify a more lasting reversal of an upward trend.
Demand issues will keep commodities going strong as well, as more and more Asian economies grow and will need things like grains, rice oil and copper to fuel their development
Plus uncertainties in stock and currency markets makes commodities a solid long-term play, especially with loose monetary policies coupled with political and general economic uncertainty.
"The problem is currencies everywhere are being debased, and that's why I would rather own real assets. I'd rather own silver or rice than Toyota or IBM," Rogers says.
"If you can get the right farmland I would suspect farmland would continue to be a wonderful place to continue to put money," Rogers tells Newsmax.TV.
"Become a farmer. Finance is finished."
While social unrest could roil the U.S. and Europe next year, governments could topple from it elsewhere, especially in countries
where one party has dominated for years.
"You're going to see more social unrest including in the United States, including in western and in developed countries. There's going to be a lot more social unrest. More governments are going to fall, more countries are going to fall," he said.
"When I say be careful, I mean be very careful in every way, not just with your investments but with your life," Rogers says, quick to clarify that social unrest in the United States and Europe won't lead to coups like it did in the Arab Spring uprising across the Middle East this year.
"I don't know if any European countries are totally going to fail. You've seen Libya totally fail as a country. You've seen Somalia. You will undoubtedly will see Syria totally collapse as a country. You might even see Iraq collapse as a country," Rogers says.
"You are going to see more countries where things have been stifled artificially, now that people have the Internet and Facebook and all this other stuff, you are going to see a lot more turmoil and governments being changed around the world especially the ones where you have had a one-party state for a long time."
In the U.S., whoever wins the 2012 presidential elections will be battling major economic problems and if President Barack Obama wins, he might want to pick a new team, Rogers suggests.
"Mr. Obama doesn't seem to understand what's going on in the world around him. His advisers certainly don't. I hate to laugh but I kept saying in 2009 that Mr. Obama has got to learn these guys don't have a clue," Rogers says.
"We're all going to learn in 2013, 2014 and in 2015 that they are going to make things worse and worse and worse because the world's got serious problems partly caused by these guys who don't have a clue. The idea that you have the people who caused the problems to solve the problems is bad for my nervous system."
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