Jim Rogers: Don’t sell your Gold; buy the Dips

Commodities king Jim Rogers made the rounds with the media yesterday, speaking to, among others, the The Economic Times of India regarding his latest thoughts on the gold price.

Now living in Singapore, the 68-year-old American citizen reckons the gold price may meander lower in coming weeks, but strongly suggests that weaker prices present an opportunity for investors who missed the boat on this roaring bull market to jump aboard to higher prices he sees in the future due to the protracted sovereign debt crisis in the Europe, then, in the United States.

“ . . . gold has been up 10 years in a row, which is very unusual in any asset class,” Rogers told India’s largest financial daily publication The Economic Times.  “So if it is up this year or 11 years in a row, gold is overdue for a correction and it could have a nice substantial correction given that it has been so strong.”

“I have no idea what is going to happen this year.  I doubt if it will go to $2000 an ounce in 2011, it is more likely to have a correction which will last for several weeks, several months,” he continued. “It has been very strong. If it goes down some more, I would buy more gold.”

Just as two other hard-money advocates Peter Schiff and Marc Faber have already suggested in their comments earlier this week, Rogers said he sees the pullback in the gold price as a healthy one within a larger contextual outlook for the precious metal in the longer term.  He, as both Schiff and Faber have indicated, view the pullback in gold—and silver—as, yet, another buying opportunity for investors seeking protection from the endgame of expected currency debasements of the euro and U.S. dollar.

But, as on several occasions of the past decade, the pendulum has swung to fear again in the gold market, as Mr. Market—with a little help from regulators and central bankers who apply pressure points to leveraged paper traders at seemingly the most opportune times—took latecomers and momentum traders to the woodshed as punishment for their short-term greed indiscretions.  Buyers of the physical metals, however, swamped dealers with orders during the vicious sell off (see $10 billion Sprott Asset Management’s Eric Sprott interview on King World News).

Rogers continued: “When fear permeates a market, everybody sells, especially the last ones in frequently have to jump out. They have raised margin requirements for both silver and gold. So that makes it more and more difficult for people to hold on.”

Incidentally, the uber-U.S.-centric Forbes Magazine’s takeaway from Rogers’ sanguine comments borrowed from the ET interview, regarding the recent turmoil in the gold market, was subtly skewed by its headline—omitting of his most salient point: buy the dips!

Forbes Magazine headline: Jim Rogers Tells India Press Gold Will Decline For ‘Months’.

On the other hand, the original price from the 40-year-old ET is entitled:

Gold price correction will last for several months; buy on dips: Jim Rogers. (emphasis added).

Though the Forbes’ piece does include the entire Rogers quote, which includes the “buy the dips” statement, one has to wonder how hard the magazine has been hit in advertising revenue now that U.S. dollar-denominated paper assets have taken a beating against real money, gold?  As Keynesians have previously indicated, higher gold prices are a barometer of the public’s disaffection of stewards of the purchasing power of the U.S. dollars—and the euro, at this time, too.

But in fairness to Forbes, it hadn’t spread comments from unconfirmed and anonymous sources during the never-ending crisis out of Europe as CNBC’s Steve Liesman and Financial Times of London have.

The crisis was a long time in coming, as Jim Rogers has repeated stated for years, and the Kremlin-like credibility of those reporting the crisis have only served to underscore Rogers’ comments regarding his reasons for owning gold.  Freegold for free people.

Jobs Data seals QE3

It’s getting ugly out there, and fast.

The debt crisis in Greece (now spreading ever so insidiously to the Portuguese bond market); China’s slowdown brought on by lower global demand and tightening by its central bank to quell speculation in the country’s housing market; stubbornly high oil prices; civil unrest in more than a dozen countries surrounding the Mecca of black gold, Saudi Arabia; three openly waged wars; and, now, the realization that the Fed’s effort to revitalize a dying U.S. economy is not working are scaring a lot of people from New York to Beijing.

Today’s release of the U.S. Labor Department’s non-farm payrolls, which showed only 54,000 jobs were created in May, not only printed below consensus of 165,000 (lowered from 244,000) but was lower than the lowest estimate of 56,000.

It gets worse.

Remove the 206,000 jobs created by the Labor Department’s bogus Birth/Death model, one of the favorite components to massage data, jobs in the U.S. actually contracted by at least 150,000!

“Take away the Birth/Death adjustment of 206,000 and the Real NFP is: -150,000,” stated zerohedge.com’s Tyler Durden (fictitious name) minutes following the U.S. Labor Department’s release. “This is the biggest monthly B/D adjustment in over a year. And if as all the pundits claimed last month, demanding the McDonalds addition of 62,000 janitorial, part-time jobs be added to the May number, the economy really lost over 200,000 in May.”

If there’s any doubt left that pundits of the Fed’s easiest of easy monetary policy won’t remain standing through the pressure exerted from all sides to raise the Federal budget debt limit, today’s jobs data should leave no doubt, as fortuitous as the timing of such a bad report appears.

“Time to price in QE 666,” Durden writes.

So the dilemma the Fed and policymakers in Washington are left with are:

1)    Allow the deficit to soar further and deal with soaring inflation, kicking the can down the road just a little bit more.

2)    Default of the debt and bring on the riots.

“Next year is going to be pretty miserable,” FX Concepts president John Taylor told CNBC on Thursday.  “QE 3 will start or not? No. No more? Well, eventually it will start I would argue. I think the Fed has to really see the economy printing minus numbers first.”

Well, we just saw a negative number.