Investors will take refuge in gold: Jim Rogers

NEW DELHI: Commodities investor Jim Rogers says as governments the world over debase their currencies, investors will take refuge in real assets and gold is one of them. And European countries don't deserve their current credit ratings. 

Gold price movements: Well, I own gold and I see gold breaking new highs and racing up. I don't like to buy things when that is happening; when gold goes down I will buy more gold. Gold is going straight up, it will probably correct somewhere and I hope it will correct somewhere along the line and if it does I will buy more. 

Fundamentals driving gold : Governments all over the world are debasing currency; Yesterday, the US Federal Reserve said it will continue to debase their currency. The more the governments will debase paper currency, people will take refuge in real assets and gold is one of them. 

Downgrade of the UK and other European countries: The US has been downgraded and countries like the UK that has very high debt will have to be downgraded too. You can't have the UK as triple 'A' and the US as not a triple 'A'. You need to be asking S&P or Moody's why they haven't got around doing that. I don't think, the European countries deserve their rates. 

Equity markets: We are seeing a collapse; panic selling but that always leads to a rally and we will have a rally. But is it real? I do not think so. The world still has serious problems. 

Commodity markets : They are moving at all-time high records. Do I expect gold to crash? No, I don't expect it to crash, although I see it coming down; Crude oil has come down quite a lot. I expect it to rally soon just like everything else. The world is running out of known oil reserves and unless we discover a lot of oil quickly, it will be all about how high it stays and how high it goes. Oil is going to be much higher over the years. 

Base metals: As far as base metals are concerned, they have already corrected and they will be probably rallying soon. In the short term, I would expect a rally in the commodity market. I am not buying that is what I would expect. 

Demand for commodities: Depends on how you want to see it. If governments go on printing more money, people will want to hold more commodities. You may have the economy slow because at the moment, there is a slowdown and that may slow the demand for commodities. 

Alternative to dollar: The world definitely needs something to compete with and replace the US dollar. But I don't see that happening anytime soon. It is going to take a while for a currency to come up to replace the US dollar. We need an alternative, but it takes a while. America is the largest debtor nation in the history of the world. There is no such currency at this point. 

Emerging markets: India and China are not much different from the rest of the world. 

They have seen the selling conduct too and they are going to a rally. The world has economic problems. India and China have a lot of inflation and the governments and the central banks know of it and they are trying to do something about it. 

India and China may see some cool off. Commodity prices will be going up, but that is because the world has got economic problems, If the US Fed, which is the largest in the world, continues to print money, then India and China can do little; they may try their best to cool inflation, but India and China are less than one-tenth of America's central bank. (Economic Times)