Greenfaucet.com - Global Market Commentaries

By Roger Nusbaum, greenfaucet.com

Jim Rogers was just interviewed by Bloomberg. You can see the interview here and get a couple of recaps here and here.

The newest thing that Rogers has been talking about is buying farmland. I wrote about investing in farmland stocks last August. They generally have not been immune from the declines is global markets but they have mostly dropped on different time tables which speaks to the potential for low correlation. Going forward there is demand for the things farms produce and visibility for the demand to increase. This combined with the potential low correlation at least makes the group with learning about if you have not done so already. I will add that these stocks are not simple but I do believe there is long term value there.

Rogers is worried about inflation coming because of the increase of sovereign debt issuance around the world including of course the US. Expansion of the money supply is the definition of inflation and higher prices are the byproduct of inflation. The rate at which the CPI might increase in the future hinders on the Fed’s ability to recognize when the crisis has passed in order to then contract the money supply.

They were late to publicly recognize the crisis and so I am afraid might be slow to start backing out some of these measures that concern Rogers. This makes the case for TIPS exposure.

I was struck by the idea that he is having a little trouble figuring out how to deploy all of the funds at his disposal. He seems to have access to everything in the world, having apparently opened accounts in many countries he visited on his trips around the world which tells me that it is OK for us to have cash on the sidelines. My cash level for clients has been above normal for what seems like ages and while I do not regret that at all I did not go all cash. When the market finally turns for real, most of us will not recognize what is happening. The market will go up a lot in a fast manner and a lot of people will miss it. There is no element of timing to that opinion just the understanding that the transition from bear to bull often starts with a big fast move like 2003.