Jim Rogers on Gold and Why Geithner Is Toast

Economic Policy Journal ^ | 11/27/09 | By Maria Bartiromo

[FromLori]

I was on assignment in Singapore on Nov. 24 when gold hit an all-time high of $1,174 an ounce. That was fortuitous because Singapore is the home base of commodities guru Jim Rogers, creator of the Rogers International Commodities Index. Meantime, back in the U.S., reports were surfacing about growing discontent in the halls of Congress over the performance of Treasury Secretary Tim Geithner and the possibility he might be replaced by JPMorgan Chase (JPM) CEO Jamie Dimon. When I rang up Rogers, he was his usual low-key self, with quiet opinions about the future of gold prices, commodities to watch, and why Obama should dump Geithner.

MARIA BARTIROMO

Gold, as you know, hit an all-time high today, with the Russian central bank buying bullion. How high can gold go?

JIM ROGERS

Well, I own gold and I have for a while. How high can it go? I fully expect it to be over a couple thousand dollars an ounce sometime in the next decade—I didn't say the next month, I didn't say the next year, I said the next decade—because paper money around the world is very suspect. But right now everybody's bullish on it, so I don't like to buy things when that's happening. But I'm not selling under any circumstances.

What's behind the runup? Has buying by the central banks changed the equation here? Or is this still a demand story?

Certainly a demand story because, as I said, everybody's printing so much money and people around the world are worried about that. But you also have central banks, which five years ago were selling gold, now buying. So that's a huge shift in the marketplace. Central banks are like lots of other people—they just follow the crowd. There are probably better commodities to buy than gold, but you can't tell that to central banks because they've got gold on the brain...

Tim Geithner has been under attack lately. How's he doing? Listen, I have been a critic for years. Geithner should never have been appointed to anything. He's been wrong about just about everything for 15 years.

Do you think he'll lose his job?

Of course he's going to lose his job, because as Mr. Obama realizes that Geithner doesn't know what he's doing, he's going to look for somebody else because he doesn't want to take the heat himself. So he's going to look to blame somebody, and the obvious person is Geithner.

Read the full interview here.

[FromLori]

ping

Also good at his site today

BofA: Dubai Woes May Reach ‘Sovereign Default’ and Cause Emerging Market Problems

http://www.economicpolicyjournal.com/2009/11/bofa-dubai-woes-may-reach-sovereign.html

Dubai Featured in Wall Street 2 !!!

http://www.economicpolicyjournal.com/2009/11/dubai-featured-in-wall-street-2.html

Rat Fink Seeks Billions for His Dirty Work

http://www.economicpolicyjournal.com/2009/11/rat-fink-seeks-billions-for-his-dirty.html

[Salvey]

Obama realizes that Geithner doesn't know what he's doing

Does obama realize that he doesn't know what he (obama) is doing?

[Pelham]

“Central banks are like lots of other people—they just follow the crowd. There are probably better commodities to buy than gold, but you can’t tell that to central banks because they’ve got gold on the brain...”

Gold is in a bubble. But the ability of bubbles to continue to grow can be astounding.

[FromLori]

No lol

[jessduntno]

Obama realizes that Geithner doesn’t know what he’s doing

“Does obama realize that he doesn’t know what he (obama) is doing?”

A clear cut case of the blind bleeding the blind...

[rigelkentaurus]

geithber is a tax cheat and a marxist. Firing him is fine, it just won’t matter because his replacement is certainly be another marxist.

[HighlyOpinionated]

The Congress should not allow Geithner to abscond with ANY bonuses he’s gotten as Treasury Secretary.

And he should be FORCED to pay all his 2009 Taxes before he leaves.

[FromLori]

Absolutely and then goldman sachs should pay us back too!

[Prince Caspian]

One could consider everything to be a bubble. Either a convex bubble or a concave bubble. Absolutely nothing is perfectly smooth or exactly where it should be at any given snapshot. So all these convex/concave bubbles create a textured surface of the whole that is larger and more complex and with more variables and unknowns than anyone can get their head around. Each person has his or her own partial view (or agenda) in which he is emotionally (financially?) invested and therefore defends to the death. But the bottom line is that no one really knows much of anything when it comes to predicting what's happening next. (Not that there's anything wrong with that...).

[FReepaholic]

I just don't understand why Russia and these other countries (India and another one I don't recall) are buyers of gold when it's the highest it's ever been.

Are they being smart or dumb or what?

[Dick Bachert]

We’re in the TULIP phase of the gold run up.
And I ain’t selling either.

[FromLori]

My opinion they know the economy is going to crash from all the printing he who has the gold has the power.

http://www.marketoracle.co.uk/Article15355.html

[Pelham]

It’s herd behavior. Even sophisticated investors can get caught up in it. That’s a large part of what created our current financial crisis.

[PoloSec]

Obama the long legged McDaddy Muslim will have no problem replacing Gietner with someone else who doesn't know what he is doing

[Pelham]

Like with most bubbles there is a convincing rationale at the beginning for investing in it. There is a convincing case to be made for a coming massive inflation, and not just in regard to dollars. In all currencies.

But often when something becomes a sure bet it’s time to make sure that you know where the exits are. That doesn’t mean it’s time to leave yet. Markets can be irrational far longer than you can stay solvent if you bet against them.

[FromLori]

Yes like summers another disaster.

[Dick Bachert]

Yup.
They have to cover so much bad debt with bad paper, this could go on either until the whole damn thing collapses or the revolution begins.

Either way, gonna be a very bumpy ride.

[Pelham]

Some bubbles aren’t that hard to spot. Timing them is another matter. Using traditional valuations I suspected that SoCal real estate was in a bubble in 2003. By 2005 I knew that prices here were unsustainable, the incomes of borrowers weren’t sufficient to handle the loans that they were taking out. But the top wasn’t in for another year or two.

With gold there isn’t the sort of outside metric like those which you can apply to real estate investing. Calling a bubble in gold is more subjective. What is driving gold is a lack of confidence in currencies, greater wealth in China and India, near-zero interest rates, a dollar carry trade, and a self-reinforcing belief that gold is going to go up. Breaking one of these trends probably won’t pop gold’s bubble. But if a couple of them reverse then I think we will see a dramatic decline in gold.

[sergeantdave]

This is not rocket science.

When the stock market crashes, the people who bought physical gold and gold stocks as a hedge will cash them in to cover their loses. Gold is going down short term - soon. *

We’ve been through this before. When gold falls, and it will, buy in at $950. I’m looking at buying around mid-January.

* (The above advice is the ravings of a lunatic. Do not believe anything he says. So do your own damn due diligence and may you not jump out a window taller than 4 feet off the ground.)