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Jim Rogers has just arrived in Edinburgh from New York when I meet him in Edinburgh's Usher Hall. He's got to put up with me for half an hour or so; then he's giving the closing speech at the packed-out CFA Conference here. Then he's back on another plane (the world's best-known commodity guru lives in Singapore).
He was hoping for a few easy questions. So I ask him what he would do if he was in charge of the US Federal Reserve, given how he feels about Ben Bernanke's efforts. Bernanke, says Rogers, just like Alan Greenspan before him, "has absolutely no concept" of economics, finance or currencies. There will be a "currency crisis in the US". First, he says, he would resign and head for the pub. I say that's not allowed. So he says he would abolish the Fed and then head for the pub. I say that isn't allowed either. This leads us on to a conversation about how economies work when they have no central bank. You can read more on this bit of our chat on my blog.
So what's he buying now? He hates the US dollar. But he is holding it for the short term as everyone hates it and that makes it oversold. But what's his trade of the decade? Several people I've asked recently say the Singapore dollar or a basket of Asian currencies – after all, when economies grow, their stockmarkets don't usually go up, but their currencies pretty much always do.
However, while Rogers holds most of these, they aren't his trade of the decade. It's rice, which he can see "quadrupling or quintupling". Would he take rice over gold? Yes. Gold is not only making all-time highs, "but it is on everyone's lips". Rice, much in demand but still horribly depressed, is not.
He's also sure the commodities bull market is still underway. If the Fed does tighten, he expects all markets to fall in response. But he also expects commodities to fall less than the rest (there are "serious shortages") and he also expects to make enough money on the assets he has sold short to more than cover his losses on them.
His shorts? Technology stocks in the US and emerging-market equities. Why the latter? "Because there are 20,000 MBAs flying around the world looking for them… what more do you need to know?"
Before he rushes off I ask him briefly about Japanese equities. And now I bring you good news – he has been buying them. Given they are 70%-80% off their all-time highs, he says, why wouldn't you? "Money is going to start going back into Japan... the Japanese economy is going to start doing better", given its huge exposure to Asia. I've interviewed three clever people this week. They've all agreed on this. It has got to happen one day.
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Merryn Somerset Webb
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