NEW YORK (HedgeWorld.com)–Forget about stocks and bonds, the new bull market is in commodities even if China stumbles in the short run, argued Jim Rogers, author and co-founder of Quantum Fund with George Soros, in a talk Wednesday.
“It’s simple economics,” he said, speaking at the New York Board of Trade, where he once owned a seat. His conclusion is based on the lack of investment in productive capacity during the long bear market for commodities in the 1980s and 1990s and the consequent weakness in supply.
He told the commodities traders in the audience that they are now going to be admired and respected and become very rich.
China’s voracious appetite for everything from cotton to copper to crude oil has been a major force driving up commodities prices. Mr. Rogers expects a hard landing this year in Chinese financial markets but sees that as a temporary setback.
On the basis of experience, he estimates that the commodities boom will continue for another 10 to 18 years, with fluctuations along the way. Commodity markets are nowhere near their all-time highs, with silver and sugar some 80% below their peaks, he said.