Jim Rogers, appeared on ETNOW on January 13 to talk about the outlook for the United States economy in 2012.
You need to remember two things about the United States. There is an election in November. This means that you are going to hear a lot of good news, whether it is true or not. The second thing is that the American government is spending staggering amounts of money in preparation for the election. They do this every four years. They get the economy all juiced up so that they can win the election.
Long term, secularly, commodity prices are still in a major uptrend. Yes, the politicians have postponed Armageddon. But they have done nothing more than that. People need to be more concerned about 2013 and 2014 than 2012. They will do everything they can to get us through the election.
If the world economy gets better, commodity prices will do well because of the shortages. If the economy does not get better, then they are going to print a lot of money. In this case, you need to own real assets. There are 40 elections this year, and they are going to print a lot of money.
Jim Rogers is not selling his gold right now by any stretch of the imagination. If gold is up this year, that would be 12 years in a row, which is unusual for any asset. Gold may spend the remainder of 2012 consolidating. Gold needs to continue to consolidate. That will make it much better – it would make the ultimate bull market much longer and higher.
You will probably see base metals doing better in 2012 because of the elections and governments printing and spending a lot of money.
Jim Rogers is still short India. India is one of the most wonderful countries in the world, but they have serious problems. The government is always making mistakes. He is also short other emerging markets, so it is not anything personal against India. He’s not shorting any specific stocks, just the indices.
Brazil has a wonderful economy and they are heavily involved in commodities. But Brazil has rarely been well-managed, and their government is now making a lot of mistakes. Jim is short Brazil mainly because the prices have already gone up too much.
