As global investors fret about the March 20 deadline for Greece to demonstrate whether it will sink or swim, Jim Rogers of Rogers Holdings advises to hold gold, silver and commodities for the long, rough haul anticipated for the remainder of the decade. Sign-up for my 100% FREE Alert
In other words, currencies are ultimately bound for a trip to the graveyard, according to Rogers. Greece is only the beginning to the contagion in Europe and the U.S.
“Probably none of us are going to own any paper money at all ultimately, but that’s later in this decade, because paper money is becoming very suspect everywhere in the world,” Rogers, told CNBC from Singapore. “I don’t own any U.S. equities,” adding “I don’t own the pound sterling, although I do love the UK a great deal.”
Rogers, who made his fortune trading commodities during his partnership with George Soros in the 1970s, sees a repeat of central bank monetary profligacy, which, back then, took gold to $800 per ounce from $35 within nine years—a 42 percent compound return throughout the nine-year bull market run.
“Everybody’s having a wonderful time running the printing presses,” said Rogers. “The way to protect yourself at a time like that, historically anyway, has been to own real assets. Those are my longs, and currencies.”
While unprecedented imbalances between debtor nations and creditor nations work their way through Europe and, eventually, the U.S., either debtor nations outright default on their debts or they debase their currencies, with the latter the more traditional method of reducing the relative size of debt to revenue.
But the 69-year-old Rogers has hedged for any outcome regarding the two primary reserve currencies, the U.S. dollar and the euro, through the ownership of the monetary metals, gold and silver.
“But I own the euro, I own the U.S. dollar. I own various currencies hoping to get through all this, but someday, none of us are going to own paper money at all,” adding that he’s “not thinking about selling” his precious metals. In fact, Rogers likes silver over gold at these prices levels.
Gold and silver currently trade at $1,720 and $33.20 per ounce, respectively.
Echoing Rogers sentiments on the yellow metal comes from billionaire hedge fund manager John Paulson of Paulson & Co, who told investors to grab some gold before consumer price inflation takes another jump higher in coming years.
“By the time inflation becomes evident, gold will probably have moved, which implies that now is the time to build a position in gold,” Paulson stated in a letter to investors obtained by Bloomberg on Friday. Sign-up for my 100% FREE Alerts