Jim Rogers thinks inflation is far from over

Legendary investor Jim Rogers, who was one of the pioneers of investing in commodities and also a great bull on China, expects inflation and interest rates to go up further. According to Rogers, there is more of inflation still likely to manifest itself and also more rate hikes likely as central banks will not give up policy hawkishness in a hurry. However, on investing, Jim Rogers has been categorical that he would not jump into investing in India at this point of time, but rather focus on a market that has not yet been fully explored.

Recently, Jim Rogers not only spoke about inflation and interest rates, but also about the outlook of his favourite investment themes like commodities and precious metals. On the markets overall, Jim Rogers is of the view that people have stopped worrying about inflation too soon. However, Jim Rogers feels that going ahead, the war between Russia and Ukraine and the stand-off with Europe would get worse. That would only mean that inflation also gets worse from here. Governments have printed too much money in too short a time.

With inflation likely to again head higher, interest rates cannot be far behind. As inflation gets worse, interest rates will get more hawkish as will central banks. Rogers fells that across the world, central banks will start raising interest rates all over again. Rogers has also raised questions about the quality of people calling the shots at central banks. He feels that there were good bureaucrats and good academicians but what the world really missed was the presence of top quality economists with deep central bank policy exposure.

One more outcome that Jim Rogers sees is a forthcoming recession, which he feels is inevitable at this juncture. It will be a recession just because there has been so much inflation. Jim Rogers feels that world may be coming close to the end of this crisis but normally crises are the most severe close to their fag end. He just feels that too much debt at a macro level and at a household level would worsen the recession as people struggle not only to make a living but also to just be able to repay their debts. 

On the subject of emerging markets, Rogers is focusing on very raw markets. According to Rogers, if the US has a problem, everybody has a problem. He feels that value is hard to find, but he does like some of the newer markets like Uzbekistan and Cambodia, although these are extremely small markets. He is more neutral on India. According to Jim Rogers, India has had some very good years of performance in the stock markets. For now, Jim Rogers is staying away from the India and the US markets. 

If it is inflation, then what about commodities and precious metals? Let us talk about commodities first. As usual, Jim Rogers continues to be very positive on commodities. According to Rogers, most asset classes have a problem. Bonds have been expensive for too long while property has been forming a bubble in many countries. Stocks are just too rich in valuations and the only cheap asset class, according to Jim Rogers, is commodities. He also feels that in an inflationary environment, real assets like commodities will be preferred.

What does Rogers think about precious metals like gold and silver? He underlines that he would stay invested for now in gold and silver. However, on the subject of fresh buying, Jim Rogers would prefer to put his money today in buying silver rather than in buying gold. That is because, silver is sharply down from all-time highs and has fallen many times over compared to gold. Rogers especially likes copper which finds extensive application in electric vehicles (EV). Clearly, Rogers is back to his old obsession with commodities.