Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

[Master Shake]

Dec. 5 (Bloomberg) -- The fundamentals of commodities are “unimpaired” and prices will rebound when a lack of new supply leads to shortages, said Jim Rogers, chairman of Rogers Holdings.

“Commodities will be the place to be if and when we come out of” the downturn, Rogers said yesterday in an interview from Miami. “The only thing where fundamentals are unimpaired are commodities. Farmers cannot get loans for fertilizer now. Nobody can get a loan to open a zinc mine. So we are going to have some serious, serious supply problems before too much longer.”

The Reuters/Jefferies CRB Index of 19 commodities has plunged 53 percent from a record in July on concern that a global recession will sap demand for raw materials. The index almost doubled between its low in 2001 and the end of last year.

I don't know about you, but Rogers is starting to sound like this guy.






Just a flesh wound.

[grapejelly]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

He's right. It's the contrarian play that actually holds water.

[Tulpen]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

He's right. It's the contrarian play that actually holds water.

Loaded up on oil this afternoon.

[Jim Nickerson]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

Loaded up on oil this afternoon.

What does "loaded up" on oil mean, 75% of your investable assets or more?

[Tulpen]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

What does "loaded up" on oil mean, 75% of your investable assets or more?

Loaded up means I took a good chunk.

[Rajiv]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

Did you take physical delivery of the oil? Are you paying for its storage some place? If not, how have you bought oil?

Think before you answer this question -- because it goes to the heart of the nature of the FIRE economy!

[Tulpen]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

Did you take physical delivery of the oil?

Everytime I fill her up.

[Rajiv]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

Everytime I fill her up.

That definitely ;)

However my question was serious, and not facetious -- and goes to the core of the nature of the FIRE economy vs the nature of the PC economy

[Tulpen]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

However my question was serious, and not facetious -- and goes to the core of the nature of the FIRE economy vs the nature of the PC economy

Really, you think I store oil somewhere in my backyard?

[ST]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

He's right. It's the contrarian play that actually holds water.

I think he's right as well. All paper devalues against commodities. The U.S. FIRE economy is not the world economy. Assuming enough is printed to overcome a spiral downwards, growth resumes in the part of the world where commodities prices are largely determined.

Less investment leverage in the west for that market - yes, but definitely less supply and even more trepidation on the part of suppliers to expand production going forward based on the current experience of staring into the abyss.

Therefore even more reluctance than we witnessed over the past 6 years and even less enthusiasm for supply expansion later, even if commodity prices go back to new highs. The end result? Ultimately commodity prices will go much higher than they would have, had we avoided debt deflation.

And we haven't even factored in the rush to inflation hedge mentality to come eventually. Bottom line, despite the extensive binds of globalization and infectious fear of market sentiment, the U.S. economy is not the world economy as too many U.S. centric analysts still think.

Yes, the global sea level is falling, however, global reflation should prevent it from sinking indefinitely. This was not a debt deflation based on consumers and businesses being tapped out; this was a debt deflation that started with a bubble in financial products which were over leveraged based on a housing bubble - a bubble on top of a bubble - a financial event which has morphed into a financial process which has now morphed into an infection into the real economy. Worldwide consumer indebtedness did not initiate this; one of the many reasons printing should work this time.

[zoog]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

What does "loaded up" on oil mean, 75% of your investable assets or more?

Waiting for the next Tulpen post, approximately one hour later, saying "sold oil".:rolleyes:

Hope ol Jim Rogers turns out to be right, it's no fun watching my commodity funds taking a continual beating at the same time stocks are tanking. Cash, or maybe I should say "cash" given the broad range that seems to cover, does appear to be the place to be these days.

[Tulpen]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

Waiting for the next Tulpen post, approximately one hour later, saying "sold oil".:rolleyes:

No, it does not look like I am selling my oil today. Perhaps I am getting too much attached to it. :p

[Rajiv]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

Think a little bit about what happens when you buy an oil futures contract for a 1000 barrels of oil, or if you buy a 1000 barrels of oil -- what is the difference -- what happens after your order gets executed. What do the parties that are involved in the transaction do? One (the futures contract) is a FIRE economy artifact, while the other (physical purchase of oil) is something in the PC economy.

[Tulpen]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

double posting

[Tulpen]

Re: Commodity Fundamentals Are ‘Unimpaired,’ Rogers Says

Think a little bit about what happens when you buy an oil futures contract for a 1000 barrels of oil, or if you buy a 1000 barrels of oil -- what is the difference -- what happens after your order gets executed. What do the parties that are involved in the transaction do? One (the futures contract) is a FIRE economy artifact, while the other (physical purchase of oil) is something in the PC economy.

Nothing wrong with having regulated derivative markets. On the contrary I think they are essential to a functioning economy. Study your history books and see how derivatives made the first 17th century international corporations possible.

And please do not come with conspiracies.