This article was excerpted from Jim Rogers’ presentation at the inaugural World MoneyShow Shanghai in April. It is part of a special series featuring Rogers’ unique insights into China’s economic growth, how you can profit, and where you should invest.
If you’re going to invest going forward, I would urge you not to invest in bonds in China—or anywhere else.
Interest rates are going to be going much higher over the next ten to 20 years, because we’re going to continue to have inflation. It’s going to get much worse, certainly in the West and China, I’m afraid.
We’re going to have more problems going forward with inflation, and therefore, higher interest rates. Prepare yourself, because rates are going to go much higher all over the world.
If you own bonds—and I know there are not that many bonds in China—but if you own bonds, I would urge you to go home and sell them. If you happen to be bond-portfolio managers, I would get another job, because you’re at the wrong place in the wrong time.
Bull Market in Commodities
I’m not terribly optimistic about stocks in the West. I own very few stocks there. My main portfolio these days, other than China, is in commodities, because that’s where the bull market is.
The bull market started about 12 years ago. It continues because supply and demand are terribly out of balance. Many of you know we have shortages developing of everything—whether it’s oil, or whatever it happens to be. Tin, rubber, cotton, we have shortages of everything developing. It’s going to get much worse.
There’s been very little investment in productive capacity for the past 25 or 30 years. The world is running out of known oil reserves. The world is running out of many things. It’s not going to last forever, don’t worry. It will end in ten, 20 years, I don’t know when. Hopefully, we will not permanently run out of things.
These kinds of periods have happened before in history. They’ve happened often in history.
You need to understand this: You can either invest in raw materials, as I have done, or companies that produce raw materials.
The Chinese government is very wisely, in my view, going around the world and going all over Africa, buying plantations, mines, and oil fields. They’re doing the same thing in South America, Central Africa, Central Europe, and Central Asia.
They see what I think I see, serious shortages of all raw materials are going to develop, partly because Asia is on the rise again.
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