Tags: Rogers | gold | eventually | bubble

Jim Rogers: Gold Will Eventually 'Turn Into a Bubble'

By    |   Wednesday, 25 March 2015 08:59 AM

Star investor Jim Rogers has been bullish on gold for years, but that doesn't mean he sees the precious metal's strength lasting forever.

"Gold is going to turn into a bubble eventually, and when it turns into a bubble, I hope I’m smart enough to sell it," he told Sprott Money News, when asked what would push him to dump his gold holdings.

"On the other hand, on the down side, I’m not quite sure that I can think of anything that would cause me to sell my gold. If nothing else, it’ll be for my children someday."

Gold traded at $1,192.70 an ounce Tuesday afternoon. It has eked out a gain of 0.9 percent this year, but is down 38 percent from its September 2011 record high of $1,923.

Rogers sees major financial trouble ahead in our country. "The United States is the largest debtor nation in the history of the world," he said. "No debtor nation has ever gotten like this, and the debts are going higher and higher. That is a reason to own gold and silver."

The federal government's debt totals $18 trillion, compared with annual GDP of $17.4 trillion.

As for gold, ANZ bank analysts are bullish for several reasons. First, there's the growth of Asia's middle class, ANZ chief economist Warren Hogan and commodity strategist Victor Thianpitiya write in Barron's.

"The income effect implies that consumer purchasing power increases as real wages rise, and as such, the demand for gold will increase as more people can afford to buy it."

Then there's central bank demand, the ANZ analysts explain. "Over the next decade, emerging market central banks will need to hold a larger stock of physical gold in their vaults to shore up confidence in the newly floating exchange rates."

So where exactly is gold headed?

"Under our central case, gold prices are likely to rise gradually, eventually breaking through the $2,000 level within the next decade," Hogan and Thianpitiya say. And they see $2,400 in 2030.

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Star investor Jim Rogers has been bullish on gold for years, but that doesn't mean he sees the precious metal's strength lasting forever.
Rogers, gold, eventually, bubble
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2015-59-25
Wednesday, 25 March 2015 08:59 AM
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