Jim Rogers, “You Should Own Silver”

Fence sitters of the silver market are forewarned: buy more silver.   That advice, according to Jim Rogers of Rogers Holdings, is the heads-you-win-tails-you-win investment proposition in the years ahead.

In a Nov. 23 CNBC interview, Rogers has little doubt of more central bank intervention planned in the wake of a global economic slowdown, but if he’s off the mark, silver (and commodities, generally) investors will win anyway, as Asia’s production-export model gears to supply what the world needs—including lots of existing and new products containing silver. Sign-up for my 100% FREE Alerts

“I’m long commodities and currencies, because if the world gets better, the shortages in commodities will make sure I make money,” the 69-year-old Rogers told CNBC.  “If the world economy doesn’t get better, I’d rather own commodities because they’re [central banks] going to print money.”

It’s interesting to note that of all commodities investors of which investors can buy, Rogers singles out the ‘commodities’ silver and rice, with the latter, a staple of the Asian diet, and the former, a critical metal used in the manufacturing of alternative energy products—a sector, in which, China has taken an enormous interest and investment due to long-term strategic reasons, according to researcher and author of Red Alert: How China’s Growing Prosperity Threatens the American Way of Life, Dr. Steven Leeb.

Leeb points out in his book that China has invested more $500 billion per year in windmills, solar and other forms of clean energy, not because Beijing is necessarily concerned about the environment as a principal objective use of its $3 trillion reserves, but because it seeks to ween the Peoples Republic off rapidly rising fossil fuels prices while at the same time reducing the odds of a military confrontation with the West over remaining accessible global oil reserves.

“I mean, once the Chinese build out their solar energy, and they haven’t up to this point, but they will, they’ll start accumulating silver,” Leeb said in a September interview with Goldseek Radio. “In fact, I wouldn’t be surprised right now if they weren’t accumulating a lot of silver.”

“And my prediction is that silver will go high enough, and if we recognize it’s so critical, that the government may even ban public ownership of it, like the government banned public ownership of gold during the Depression,” Leeb continued.  “I think, well, silver over $100 per ounce—I almost think it’s inevitable, that silver hits three digits to be honest with you.”

Apparently, agreeing wholeheartedly with the Leeb thesis about the future value of silver as a vital metal to alternative energies, Rogers said at a RBS conference on Nov. 22 that he expects wind and solar to be among the leading forms of alternative energy in the 21st century and recommends investing in the sector for its long-term potential.

Given the assumption of China’s planned strategic initiatives in the area of alternative energies, the demand for silver to achieve a China-wide roll out of alternative energy is projected to surpass available silver mine production by as late as 2020, according to Leeb.  Rogers sees a similar potential of China’s demand for critical metals.

“I am very optimistic about energy sources, yes wind power, solar power and all alternative energy sources have a good future.” Rogers told the RBS conference attendees.  “ . . . the politicians love wind power, they love solar power for many reasons so they would subsidize it.”

And if the global economy takes a turn for the worse, which Rogers said, recently, is inevitable in 2012, central banks will print money to prevent a collapse of the global financial system—a system much too leveraged to weather another slowdown so soon following the Lehman crisis.

In that case, silver’s role as hard money could get another big boost, as previous so-called QEs from the Fed, and now from a Draghi-led ECB, may cause another flee out of paper currencies and into the tiny market of the white monetary metal.

“Throughout history, when things have gone wrong, they print money…when they print money, you should own silver, you should own rice, you should own real assets,” Rogers said, noting previously in the interview that the collapse in MF Global has created some forced selling in all commodities and precious metals.

While the MF Global liquidation plays itself out, how much lower silver and gold will continue to drop in prices is unclear, according to Rogers, but he will be ready with his checkbook if the metals fall further from here.  He said the liquidations of gold and silver contracts provide an opportunity for accumulators of the metals to catch better prices.

Roger concluded, “Gold could go down a fair bit more…but I’m certainly going to buy more gold if it goes down and silver.”