Tags: Rogers | Syria | commodities | Fed

Jim Rogers: US War with Syria Would Be Bullish for Commodities

Thursday, 29 Aug 2013 08:11 AM

By Dan Weil

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It's looks likely that the United States will launch a military attack against Syrian government forces, and that would boost commodity prices, says legendary investor Jim Rogers, chairman of Rogers Holdings.

He told Reuters he owns oil and gold. "If there is going to be a war, and it sounds like America's desperate to have a war, they're going to go much, much higher," Rogers said, according to the news service.

"Stocks are going to go down, some of the markets are already going down. Commodities are going to go up."

Editor’s Note:
Forbes Columnist: ‘Who the Hell Cleared This?’ (See Shocking Video)

War in Syria could disrupt oil transportation, Rogers noted. "That's where we'll see huge moves."

In addition, there's the fog of war. "No matter how well the plans are made, strange things happen in war and who knows what unintended consequences will come," Rogers stressed.

"But, throughout history, whenever you had war, things like food prices have gone up a lot, energy prices have gone up a lot, copper prices, lead prices."

Meanwhile, emerging markets, which have dropped in recent weeks, face more pain ahead, Rogers argued.

In Asia, "India and Indonesia, Turkey too — all of them have huge balance of trade deficits which they've been able to finance with all of this artificial free money that's been floating around," he explained, referring to global central bank easing.

"The artificial sea of liquidity's going to end someday. And when it ends, all of the people depending on this free money are going to suffer," he added.

"Whether it's this week or this year or next year, they're all going to suffer."

The reaction so far in emerging markets to talk of the Federal Reserve tapering its quantitative easing is just a prelude of what's to come, Rogers insisted.

"We haven't seen much of anything yet. Normally, in bear markets, things go down 40 to 80 percent, and people give up," he noted.

"They throw the shares out the window, and they say 'I never want to invest against as long as I live.' Sure, we've seen some declines. Have we seen panic? Have we seen terror? Absolutely not. Not in any markets yet."

But that panic will come, when central banks finally pull back from their easing.

"When this artificial sea of liquidity ends, we're going to see panic in a lot markets including in the U.S. [and other western] developed markets," Rogers stated.

"This is the first time in recorded history that all major central banks have been flooding the money with artificial money printing at the same time. ... When this ends, it's going to be a huge mess."

The likelihood of a U.S. attack against Syria already has sent commodity prices, such as gold and oil, higher this week.

October crude oil futures traded at $109.81 Wednesday afternoon on the Nymex, up 3.2 percent from Friday's settlement of $106.37.

"This [oil] market is reflecting anxiety about the Middle East," Adam Wise, a portfolio manager at Manulife Asset Management, told Bloomberg.

"As long as tension escalates in the region, ... you can expect prices to move higher. More news-driven price spikes are on the table."

Editor’s Note: Forbes Columnist: ‘Who the Hell Cleared This?’ (See Shocking Video)

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