The pioneer of commodity investing told Reuters that he expects oil and gold prices to rise in the context of a regional war in Syria. Moreover, he stressed that the military intervention is likely to diverge from its original plan: “the problem with war, and I'm not the first to know this, no matter how well the plans are made, strange things happen in war and who knows what unintended consequences will come.” In order to protect his wealth, Rogers invested money in oil, gold and agricultural commodities. His rationale is based on historical precedents: “I do know that throughout history whenever you had war, things like food prices have gone up a lot, energy prices have gone up a lot, copper price, lead prices: you know, all of these things go up a lot whenever there's been a war in the past.”
Jim Rogers believes that “America is desperate to have a war”. He predicted that because of the war the global stock markets will go down, while commodities will go up in price. The upcoming war in Syria is not his only concern. He believes that, sooner or later, the US Federal Reserve will have to stop pumping free money into the world’s financial system. This “sudden stop” will be a disaster for countries with big current account deficits. Jim Rogers expects turmoil in the US and European stock markets. “When this artificial sea of liquidity ends we're going to see panic in a lot of markets, including in the US, including in Western developed markets”, he told Reuters. In this scenario, everyone who depends on the existence of an “artificial sea of free money” will suffer.
Jim Rogers’ view on the future can be summed in five predictions: the Syrian war will have unintended consequences, oil prices are going up, gold prices are going up, we will see the end of “free money” provided by the US Federal Reserve and there will be panic in the global stock markets.
Valentin Mândrăşescu
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