Jim Roger on Silver and Gold

[Trade2win]

(Bloomberg) Silver is `common man's gold' in India as bullion expensive
The metal is still 48 times cheaper than gold per ounce.

Demand for silver in India, where imports of the metal surged more than sixfold in the first half of 2010, is increasing as investors seek an alternative to higher-priced gold, according to a trader.

“It is increasing day by day,” Ketan Shroff, Managing Director of Pushpak Bullions Pvt, said in a phone interview. Demand probably climbed at least 20% to 30% in the past six months, he said.

Silver futures in New York reached a three-decade high of $31.275 an ounce on Jan. 3, after rallying 84% in 2010. The metal is still 48 times cheaper than gold per ounce, data on the Bloomberg show. Gold for immediate delivery reached a record $1,431.25 an ounce on Dec. 7.

“People are accumulating silver since gold is getting unaffordable to the common man,” Shroff said in an interview on Jan. 7. Silver “has become the common man’s gold.”

Weddings and festivals, and higher gold prices will likely fuel demand for silver in the medium term, broker Karvy Comtrade Ltd said in a report Nov. 2. Imports surged more than six times to $1.7 billion in the first-half of 2010, according to Karvy.

(FT Alphaville) World’s Richest Man Enters the Silver Market
Here’s some juicy stock market RAW to kick off 2011 — Carlos Slim, the world’s richest man is looking to enter the silver market in a big way.

And that big way, according to KingWorldNews, is a bid for Fresnillo, the Mexican based mining company that is poised to become the world’s biggest silver producer.

[ein55]

Gold seems to move 1 step ahead of silver, compare 6-month plot:

http://silverprice.org/silver-price-history.html
http://www.goldprice.org/gold-price-history.html

Gold's short-term growth is getting saturated (long-term trend is still upward), from TA point of view, risk is getting higher, although FA will get better due to higher inflation outlook this year.

Silver is still doing well. I suspect due to the diff in growing rate, more gold buyers will turn to silver, resulting in less demand in gold and higher demand in silver, therefore 2 diff growing speed.

So, investment in silver will definitely safer than gold, from demand & supply prospective (more people go for silver, supply is getting less, price will shoot up).

However, the gold/silver pattern now looks like the last phase of bull market (only exception is stock's cycle is about 5 years, gold/silver can be 30 years), price is shooting up steeply, max/min price ratio is around 3 - 6. When it really drops down one day (no one knows, could be a few years later or ten years later or could be earlier), the correction will be very steep (see 1980 major peak as ref), could be 50% over a short period. So, enjoy the ride but with some care.

[AndrewNg]

Hi folks,
Come to think of it, if we use silver as a hedge against inflation, when do we actually sell our silver or we shouldn't be thinking of selling even if it appreciate over 100% of our initial investment ?

regards
Andrew

Gold seems to move 1 step ahead of silver, compare 6-month plot:

http://silverprice.org/silver-price-history.html
http://www.goldprice.org/gold-price-history.html

Gold's short-term growth is getting saturated (long-term trend is still upward), from TA point of view, risk is getting higher, although FA will get better due to higher inflation outlook this year.

Silver is still doing well. I suspect due to the diff in growing rate, more gold buyers will turn to silver, resulting in less demand in gold and higher demand in silver, therefore 2 diff growing speed.

So, investment in silver will definitely safer than gold, from demand & supply prospective (more people go for silver, supply is getting less, price will shoot up).

However, the gold/silver pattern now looks like the last phase of bull market (only exception is stock's cycle is about 5 years, gold/silver can be 30 years), price is shooting up steeply, max/min price ratio is around 3 - 6. When it really drops down one day (no one knows, could be a few years later or ten years later or could be earlier), the correction will be very steep (see 1980 major peak as ref), could be 50% over a short period. So, enjoy the ride but with some care.

[Dennis Ng]

Hi folks,
Come to think of it, if we use silver as a hedge against inflation, when do we actually sell our silver or we shouldn't be thinking of selling even if it appreciate over 100% of our initial investment ?

regards
Andrew

If one buys Silver as hedge against inflation, one thinks of selling when inflation is no longer a risk, when perhaps Depression becomes Reality. In a Depression, where prices go lower and lower for ALMOST ALL things, Cash is King.

[ein55]

Initially gold and silver probably were intended to fight against inflation. However, when the rise is too much, it could become an investment tool as it is a easy way to make money. I don't have chance to compare the rate of inflation over last 10 years in details, but if we take from historical inflation rate data of last 10 years, let's take max inflation rate of 4%/year, total is 40% for 10 years, assuming compounding rate effect, let's double it to 80%. In the past 10 years, gold has increased by over 400%, 5 times more than inflation rate. If this is the case, it implies gold/silver has been used as an investment tool, similar to forex or stock, people could buy low and sell high.

The question now is what shd be the fair value of gold vs US$. Based on its initial price when there were decoupled 30 years ago (very high price) or based on average of price in the last 30 years (driven by free market, eg. $400-$600)? If we think gold as an universal currency (it was for ancient time) which is very stable, it shd not vary so much over the time. If we compare all the currencies in the world, I think very few of them will vary 3-6 times relative to each other, except probably those smaller African or central American countries which could have high inflation.

So, we cannot deny the fact that some and more people have been using gold/silver for investment, if this is the case, the bubble will burst one day esp when the investors pull out (even if inflation still remains). This may be the same as a few bubbles in the past: technology stock in 2000, high-price houses in US a few years ago (a reason for 2008 market collapse), when lots of people attracted there, everyone thinks this is a sure-win game, then the market might collapse soon.

Of course, gold/silver has not reached the state yet, otherwise you and me would have bought some now. One day when we all think gold/silver is attractive, it might be the time to sell.

On the other hand, stock market in 2011 may do well, therefore investors would pull out money from bonds and gold (may still keep silver), so gold price may be adjusted, but it will be supported again whenever there is bad news in the world.

Investor mindset is unpredictable, when they get panic of certain investment scheme (stock or gold or housing or oil), they will oversell it, and vice versa. Steeper increase also implies drastic drop in future, unless you know when to exit. From 2001 to 2010, gold has been increasing despite worry of price collapse (only a major adjustment in 2008, drop by $300 but sufficient to burn some investors), this kind of "never-die" rising spirit has pushed many people to believe gold will never come down (at least for their current year, they will feel the same way each year). Perhaps those investors in 1977-81 were thinking the same way during the first surge of gold$. When the game ends, those stay near the peak will be trapped if the reaction is not fast enough.

I am not a gold/silver expert ... views above are purely from an ordinary person's perspective. Since I don't know the future movement of gold/silver so well, not able to estimate its potential, I would rather choose other alternative investment options.

Again, join the gold/silver game with care, if you know and understand the potential risk, it will be ok.

Just my views ....

Hi folks,
Come to think of it, if we use silver as a hedge against inflation, when do we actually sell our silver or we shouldn't be thinking of selling even if it appreciate over 100% of our initial investment ?

regards
Andrew

Gold seems to move 1 step ahead of silver, compare 6-month plot:

http://silverprice.org/silver-price-history.html
http://www.goldprice.org/gold-price-history.html

Gold's short-term growth is getting saturated (long-term trend is still upward), from TA point of view, risk is getting higher, although FA will get better due to higher inflation outlook this year.

Silver is still doing well. I suspect due to the diff in growing rate, more gold buyers will turn to silver, resulting in less demand in gold and higher demand in silver, therefore 2 diff growing speed.

So, investment in silver will definitely safer than gold, from demand & supply prospective (more people go for silver, supply is getting less, price will shoot up).

However, the gold/silver pattern now looks like the last phase of bull market (only exception is stock's cycle is about 5 years, gold/silver can be 30 years), price is shooting up steeply, max/min price ratio is around 3 - 6. When it really drops down one day (no one knows, could be a few years later or ten years later or could be earlier), the correction will be very steep (see 1980 major peak as ref), could be 50% over a short period. So, enjoy the ride but with some care.

[leslie_foo]

Hi you do have a point to a certain extend. But I don't think there is a "fair value" as it all depends on supply and demand. My opinion is, the big difference in the case of gold/silver (or any precious metals) is that supply is limited and depletable. There can only be so much gold/silver that can be extracted from earth, while demand will keep increasing (due to affluence etc).

Initially gold and silver probably were intended to fight against inflation. However, when the rise is too much, it could become an investment tool as it is a easy way to make money. I don't have chance to compare the rate of inflation over last 10 years in details, but if we take from historical inflation rate data of last 10 years, let's take max inflation rate of 4%/year, total is 40% for 10 years, assuming compounding rate effect, let's double it to 80%. In the past 10 years, gold has increased by over 400%, 5 times more than inflation rate. If this is the case, it implies gold/silver has been used as an investment tool, similar to forex or stock, people could buy low and sell high.

The question now is what shd be the fair value of gold vs US$. Based on its initial price when there were decoupled 30 years ago (very high price) or based on average of price in the last 30 years (driven by free market, eg. $400-$600)? If we think gold as an universal currency (it was for ancient time) which is very stable, it shd not vary so much over the time. If we compare all the currencies in the world, I think very few of them will vary 3-6 times relative to each other, except probably those smaller African or central American countries which could have high inflation.

So, we cannot deny the fact that some and more people have been using gold/silver for investment, if this is the case, the bubble will burst one day esp when the investors pull out (even if inflation still remains). This may be the same as a few bubbles in the past: technology stock in 2000, high-price houses in US a few years ago (a reason for 2008 market collapse), when lots of people attracted there, everyone thinks this is a sure-win game, then the market might collapse soon.

Of course, gold/silver has not reached the state yet, otherwise you and me would have bought some now. One day when we all think gold/silver is attractive, it might be the time to sell.

On the other hand, stock market in 2011 may do well, therefore investors would pull out money from bonds and gold (may still keep silver), so gold price may be adjusted, but it will be supported again whenever there is bad news in the world.

Investor mindset is unpredictable, when they get panic of certain investment scheme (stock or gold or housing or oil), they will oversell it, and vice versa. Steeper increase also implies drastic drop in future, unless you know when to exit. From 2001 to 2010, gold has been increasing despite worry of price collapse (only a major adjustment in 2008, drop by $300 but sufficient to burn some investors), this kind of "never-die" rising spirit has pushed many people to believe gold will never come down (at least for their current year, they will feel the same way each year). Perhaps those investors in 1977-81 were thinking the same way during the first surge of gold$. When the game ends, those stay near the peak will be trapped if the reaction is not fast enough.

I am not a gold/silver expert ... views above are purely from an ordinary person's perspective. Since I don't know the future movement of gold/silver so well, not able to estimate its potential, I would rather choose other alternative investment options.

Again, join the gold/silver game with care, if you know and understand the potential risk, it will be ok.

Just my views ....

Hi folks,
Come to think of it, if we use silver as a hedge against inflation, when do we actually sell our silver or we shouldn't be thinking of selling even if it appreciate over 100% of our initial investment ?

regards
Andrew

Gold seems to move 1 step ahead of silver, compare 6-month plot:

http://silverprice.org/silver-price-history.html
http://www.goldprice.org/gold-price-history.html

Gold's short-term growth is getting saturated (long-term trend is still upward), from TA point of view, risk is getting higher, although FA will get better due to higher inflation outlook this year.

Silver is still doing well. I suspect due to the diff in growing rate, more gold buyers will turn to silver, resulting in less demand in gold and higher demand in silver, therefore 2 diff growing speed.

So, investment in silver will definitely safer than gold, from demand & supply prospective (more people go for silver, supply is getting less, price will shoot up).

However, the gold/silver pattern now looks like the last phase of bull market (only exception is stock's cycle is about 5 years, gold/silver can be 30 years), price is shooting up steeply, max/min price ratio is around 3 - 6. When it really drops down one day (no one knows, could be a few years later or ten years later or could be earlier), the correction will be very steep (see 1980 major peak as ref), could be 50% over a short period. So, enjoy the ride but with some care.

[Mps112]

Check out the last paragraph of this article.

12 January 2010, 4:24 p.m.
By Debbie Carlson
Of Kitco News
http://www.kitco.com/

(Kitco News) - Rising commodity prices could trigger social unrest in some countries in the future, says noted commodities investor Jim Rogers.

Supplies for many natural resources low and demand for them high, pushing up prices. Most commodities values from corn to copper saw significant rises in 2010 and prices continue to hold solidly.

The last time commodity prices, particularly agricultural prices were strong, was in 2008. There were riots in some countries as some of the poorest people in certain countries were unable to afford basic staples. Prices for raw materials are rising again and if inflation starts to take off that will only stoke the flame, Rogers said.

“You’re already starting to see some unrest in some countries as prices go higher. It’s going to cause a lot more social unrest as prices go higher around the world. Some governments will topple,” he said.

He said commodity-rich countries like Australia and Canada and those in South America and Africa will do well if prices rise. Farmers will also benefit.

“You will see some governments topple. Is it the end of the world? I don’t think so. It wasn’t in the 70s. But there will be more political instability everywhere,” he said.

Rogers spoke at a conference sponsored by Uhlmann Price Securities and the CME Group in Chicago on Wednesday.

Some governments and some politicians might respond by blaming speculators for rising prices. He used the example of how exchanges in India will sometimes be forced to shut to cool down rising commodity prices. “But every time it happens, prices go higher and higher. That’s the reaction of a simple-minded politician,” he said.

He added that higher prices for food and for commodities will spur investment in those areas. “You’d better hope someone is investing in food. If we don’t have higher prices, we won’t have any food at any price. We need to have prices go a lot higher to bring new people into agriculture and new production on line,” he said.

As a sector, commodity prices are still depressed, but agriculture has “unbelievably depressed” prices historically, Rogers said. “I prefer agriculture because it’s the most depressed,” he said.

He also said even though silver prices have rallied sharply lately, it’s not in a bubble or near a top as it remains 40% below its all-time highs.

By Debbie Carlson of Kitco News dcarlson@kitco.com

[adriantal]

Well, a case of social unrest due to rising food cost had already happened recently at Algeria.

(CNN) -- At least two people have been killed and 300 others injured in riots that erupted across Algeria amid rising food prices and a housing crisis, state-run media said Saturday.

The protests began earlier in the week over spiraling costs of basic food items, including milk, oil and sugar. Some staples are subsidized by the government.

Check out this URL : http://edition.cnn.com/2011/WORLD/afric ... =allsearch

[jamestai]

http://money.cnn.com/2011/03/01/markets ... /index.htm

Gold hits record high

NEW YORK (CNNMoney) -- Gold prices settled at a new record high on Tuesday, as unrest in North Africa and the Middle East pushed the safe-haven commodity north of $1,430.

April gold futures rose $21.30, or 1.5%, to settle at an all-time high of $1,431.20 an ounce.

Tuesday's record high is not adjusted for inflation. If adjusted for inflation, gold's record price is much higher.

Investors rushed to gold as unrest in the key oil producing state of Libya continued to rage, and reports from Iran indicated large numbers of protestors were in the streets.

That unrest was contributing to a "fear factor" that was driving gold higher, according to Thomas Winmill, portfolio manager of the Midas Fund.

Gold prices have been moving steadily higher since late January, a trend Winmill attributed primarily to geo-political upheaval.

But he also said fears of rising inflation rates have played a role in gold's ascent. Gold is often viewed as a classic hedge against inflation because it's a tangible asset, unlike a paper currency
0:00 /5:44$2,000 gold in the next 5 years

On Tuesday, investors keyed in on Fed Chairman Ben Bernanke's testimony on Capitol Hill, where the central bank chief walked a fine line on inflation.

Speaking before the Senate Banking Committee, Bernanke noted that rising commodity prices will likely be passed on to consumers, but this effect would be only "temporary and relatively modest."

But he acknowledged that if higher prices persist, inflation could become a serious risk. "Sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability," he said.

With inflation rates already spiking in some developing economies, some investors worry that the combination of low interest rates in the U.S. and the Fed's quantitative easing plan will cause inflation to spike. To top of page

[lootster]

http://www.youtube.com/watch?v=lgektbOR ... ture=feedu

Jim Rogers on CNN March 03 2011

[lootster]

Why Jim Rogers Says His Timing Is Terrible

If u want to know what is buy low, sell high & looking to buy property in Singapore, kindly read the excerpts from article below:

Rogers also timed the U.S. property market almost perfectly convinced a bubble had built there. He and Parker sold their home on Riverside Drive, a deal for $16 million that closed in December 2007. He had bought the home in January 1977 for $106,000, at a time the city teetered on bankruptcy and was at its nadir.
Now, the couple is looking to buy a home in Singapore, though they rent for the time being. Feverish price rises in Singapore make a correction likely, he believes. “I am looking for a house but I'm not looking too hard because I expect prices to come down,” he says.


Published: Sunday, 22 May 2011 | 7:57 PM ET
By: Alex Frew McMillan
Special to CNBC.com
Jim Rogers always says his timing is terrible, particularly when it comes to the markets – though it's hard to believe that of such a successful and inveterate investor. Still, he admits he was completely wrong about the decision that now dominates his life, to have kids.




--------------------------------------------------------------------------------



“I thought children were a terrible waste of time, energy, money – I felt sorry for my friends who had children,” he says. “I thought it was something I would never do. I was terribly wrong. They are so much fun.”

Having become a father at the age of 60, Rogers, now 68, is trying to devote himself to his family. They famously uprooted from New York and moved to Singapore so daughters Happy (full name Hilton Augusta, about to turn and Beeland (known as Baby Bee, now 3) can learn Mandarin.

Rogers is becoming a familiar sight to his neighbors bicycling his two daughters to school, and picking them up each afternoon, eight kilometers in four round trips. Bar travel for his many speaking engagements around the world, he does it each day.

“I came to all this late in life and I do have the time and the energy and the money that I can devote a lot of time to them, so I try to,” Rogers says. He’s out of breath as we speak, gasping a little as he rides his exercise bike, which he tackles daily for an hour or two if he is at home.

That’s fairly typical of his behavior, his wife, Paige Parker, says. “He is an unbelievable multi-tasker,” she says. “There are rare minutes where he does not have something that he needs to do. I don’t think you become successful unless you’re an over-achiever, and I think Jim is.”

James Beeland Rogers Jr. was born in Maryland but grew up in the small town of Demopolis, Ala., where his father, James Beeland Rogers, was the plant manager of a chemicals factory. As a young man, he recalls telling people he was going to drive around the world – without really knowing what that meant.

He eventually made good on his pledge, driving first a motorbike around the world from 1990 to 1992, a journey he chronicled in his book “Investment Biker.” He then tackled the trip again by car with Parker, driving a specially adapted Mercedes around the globe between 1999 and 2002, and writing about it in “Adventure Capitalist,” one of his five books.

En route, Rogers and Parker got married on January 1, 2000, in Henley-on-Thames, where as an Oxford student and rowing blue he had won the Thames Cup. A degree at Oxford followed one at Yale, and then led him to Wall Street.

After joining the firm of Arnhold and S. Bleichröder, he then split off with George Soros to form the Quantum Fund in 1973. New brokerage regulations required them to be independent if they wanted to charge clients a percentage of assets as a management fee.

The fund, one of the first handful of hedge funds, was wildly successful. But he left in 1980 to manage his own money. “I adored the markets, and was totally consumed and passionate about the investment world,” he says. “I could hardly wait to wake up each morning and get going.”



Though now known primarily for his bullishness about commodities and China, he has had other investment passions. He was a champion of emerging markets in the 1980s, from Austria to Argentina to the Ivory Coast.

It was his trips around the world that encouraged him that the bear market in commodities was about to end after two decades of a slump. “Very few people had any interest in them,” he says, with next to no investment and new capacity. “I knew what was happening in Asia. So with supply and duress, there had to be a bull market coming. And lo and behold!”

Rogers also timed the U.S. property market almost perfectly convinced a bubble had built there. He and Parker sold their home on Riverside Drive, a deal for $16 million that closed in December 2007. He had bought the home in January 1977 for $106,000, at a time the city teetered on bankruptcy and was at its nadir. “They were giving things away,” he recalls.

Now, the couple is looking to buy a home in Singapore, though they rent for the time being. Feverish price rises in Singapore make a correction likely, he believes. “I am looking for a house but I'm not looking too hard because I expect prices to come down,” he says.

China’s property market is in a bubble in coastal cities, he believes. But he distinguishes that price bubble from the devastating credit bubble that developed in U.S. property.

“You have a price bubble that will end someday -- probably this year or next if the Chinese government keeps up their nerve,” he says. “But it’s not going to destroy China. Real estate developers may lose money. Banks may lose money on mortgages. But the whole economy doesn’t revolve around it.”

The marriage to Parker is his third, Rogers having been married in 1966 to Lois Biener and in 1974 to Jennifer Skolnick. Each former marriage lasted three years. “The first was youthful foolishness. The second was something I should not have done,” he says.


"I hope I’m smart enough to own commodities until the bull market ends. Nearly all bull markets end in bubbles, and I hope I’m smart enough to recognize the signs."
Thank goodness he didn’t have children at that age, he says now. He threw himself into his career at the expense of most of everything else, and any kids then would certainly have been collateral damage.

“I was driven and loved what I was doing and working very hard trying to be successful,” he says. “Neither woman was interested in my ambitions or how hard I thought I need to work. Fortunately, we were aware enough to know it.”

Rogers says he has slowed down after having children – a point contested by his wife. Has his pace slowed in parenthood? “Absolutely not,” Parker, now 42, says with a chuckle. “He is a high-strung Type A who likes to get it done.”

The couple met in 1996, when Rogers gave an address in Charlotte, N.C., at Queen’s College, where Parker was working for the college president, Billy Wireman. Wireman was a Sinophile, and encouraged her to read Rogers’ book and attend his talk. Since they met, “I feel like he’s been going fast forward,” she says. “Maybe he went faster before.”

Rogers says he has not had any clients for 31 years, and manages purely his own money. An index he created, the Rogers International Commodities Index, is managed and licensed by a third-party company. He’s cagey about the amount he manages.

“I grew up in a family where you don’t talk about how much things cost, how much money you have, how much you earn and so on,” he says. “My father would roll over in his grave if I talked about things like that.”

But he will share strategy. Rogers says he is currently long on commodities and currencies, having started to buy the U.S. dollar in the form of Treasury bills in November 2009. He also favors the yen, euro, Swiss franc, Canadian dollar and Australian dollar.



His favorite currency play, though, is the Chinese yuan. Whenever he speaks in China, he requests that his fee be paid in the currency, and he converts whatever currency he is allowed – 20,000 renminbi per day when he’s in China – into yuan.

He is short on emerging markets and U.S. information/technology companies, via exchange-traded funds, though he declines to identify the products themselves. Though bullish on China, he is negative on India and smaller emerging markets such as Indonesia. Those markets and tech stocks have been overexploited, he believes.

Does he have a target price for gold? “No, none whatsoever,” he says. “I hope I’m smart enough to own commodities until the bull market ends. Nearly all bull markets end in bubbles, and I hope I’m smart enough to recognize the signs.”

He believes the current correction in commodities is a short-term blip in their upward run. That may have years to continue, just as the 1987 crash was a brief respite in a decade-long bull run for stocks.

“What will probably happen is that I will sell my commodities, and they’ll double again, then I’ll sell them short, then they’ll double again because all bubbles go up farther than you expect,” he says. “And then, if I don't get wiped out, they’ll fall and I’ll make some money.”

Rogers is now considering writing an autobiography at the request of his agent and publishers – though he’s unsure whether he’ll do it. “I’m not convinced the world needs or wants an autobiography of me,” he says.

He does not follow the minute movements of the markets and prefers to focus on the bigger picture. His heavy speaking schedule keeps him traveling much of the time. When in Singapore, he concentrates on home life.

“I’m trying to devote as much time to my family and children as I can,” he says. “Especially since I became a parent fairly late, I want to miss as little as possible.”