Singapore – Global commodities investor Jim Rogers says gold’s rally and record prices are a sign that money printing is starting again and the gold bull run is far from over.

“The US has been giving the signal that it is going to print more money and Japan has recently said they are going to print more money – what is happening is that money printing is starting again and the market knows it,” he told Kitco News in an exclusive interview on Wednesday.

Gold on Thursday extended the record highs hit just three days ago. Comex December gold peaked at $1,279.50 an ounce early Thursday, a record for any most-active contract. Spot gold hit a record high of $1,278.90.

A noted commodities guru, Rogers said that a bubble will form one day for gold but it won’t be any time soon.

Rogers recounted that a few months ago when speaking to a room full of high-end money managers, they were asked how many of them owned gold. “Seventy-five per cent of the people had never owned gold, or silver. So you can see most people still do not own gold. For most people in the world gold is still an unknown entity,” said Rogers, Chairman of Rogers Holdings.

During gold’s hysterical phase, which Rogers said could take place in 5 to 7 years; everyone will be buying the yellow metal, he said. In the interim, Rogers said we will see more Asian banks buying gold, citing Bangladesh’s recent purchase of 10 tonnes of the IMF gold.

“It is not the way people are supposed to invest but they see something moving and they all want to jump on. The gold bull market has a long way to go, all commodities have a long way to go – in the end we will end up with a hysterical bubble, at which point I hope I am smart enough to sell (...) but that is years away,” he said.

With spot gold currently hovering around US$1275 an ounce, Rogers said he normally advises to buy when prices are going down. “For somebody who owns no gold, I would say go ahead and buy some silver. If you desperately need to buy gold it is better to buy things when they are going down not when they are racing high,” he said. However, he added that everyone should own some gold as insurance if for nothing else.

Rogers said that more money can be made in silver than gold at the current prices.
“Gold is at all-time high and silver is still 60 per cent below its all-time high,” he said.
He added that there is more money to be made in agriculture than silver or gold. “There is going to be a lot of money made in commodities yet, if people do their homework,” he said.

On printing money

Rogers has been openly critical of printing money as a means to solve the problem. He said allowing failure is the better solution.

“When people fail, you let them go bankrupt and start over. What’s supposed to happen when people fail is competent people come in, take over assets, reorganize the assets and start over, it is a painful horrible process but it is the only way you can get it to work.”

--By Daniela Cambone of Kitco News dcambone@kitco.com

To Watch the Full Video Interview