We talked with Jim Rogers, legendary commodities trader, who picked the bottom of the commodities bull market in 1999. Bestselling author, biker capitalist and widely followed, Jim Rogers talks about what he's now investing in.
StockInterview: Is the commodities bull similar to the Internet boom of late 1999? Does it have a few more years to run, as strongly as it has?
Jim Rogers: Well, there's a bit difference. As I said before, you and I could go into the garage and start a dot com company and bring it public next month. That's a little bit different from bringing a zinc mine on stream, much harder to bring new production to commodities compared to some of these other things. I do know, if history is any guide, we're now seven years into this bull market in commodities. If it's going to last 15 to 23 years, we're maybe a third of the way through, so we have another 9 to 16 years to go, I guess.
StockInterview: Is the United States heading toward the same demise as previous colonialists: England, France, Holland, Germany and even previous world powers, such as Spain and Portugal?
Jim Rogers: If all powers, which have risen, have eventually peaked, plateau'ed, and then declined, we of the U.S. certainly have things going on which would indicate that we are. I don't think anybody would dispute that we are a mature economy and a mature society. Whether we're still growing or not is another question. I see many factors where we're overextended financially, overextended geo-politically, and overextended militarily. I would suspect the U.S. is in a plateau phase, and perhaps has even gone over the line and is in a decline, certainly on a relative basis.
StockInterview: Who, then, would replace the U.S.? Russia, India, Japan or China?
Jim Rogers: Not Russia. No, Russia is a disaster spiraling downward into a catastrophe. I see little hope for India replacing anybody. India is more likely to break up into a few countries in the next few decades than it is to become the world power. Japan has serious demographic problems. Japan's population is in decline for the first time in recorded history. Unless something happens demographically in Japan, Japan is going to have huge problems in the next few decades. They've got gigantic internal debt, which somebody's got to pay off. With a declining population and internal debts rising, I think they've got serious problems. The only one I can see on the horizon is China.
StockInterview: What, then, will become of the U.S. dollar?
Jim Rogers: The same thing that happened to sterling; the same thing that happened with the guilder. You know, the guilder used to be a great international currency. The peso used to be a great international currency. You don't see people using guilders anymore to settle their international debts or finance their wars. They decline and sort of disappear from the world stage. I would certainly get out of the U.S. dollar. It's already losing its status as the world's reserve currency, as the world's medium of exchange. We in the U.S. owe the rest of the world at least eight trillion dollars -- that's trillion with a T – and it's increasing at the rate of one trillion U.S. dollars every 15 months. There are serious problems in the U.S. with the U.S. dollar. I wouldn't own U.S. dollars if I were you.
James Finch contributes to StockInterview.com and other publications. Visit http://www.stockinterview.com to download your free copy of "Investing in the Great Uranium Bull Market: A Practical Investor's Guide to Uranium Stocks." You can always write to James Finch at jfinch@stockinterview.com
