zinc crash ... here we go, page-6

the slowest bull market in commodities lasted 15 y Commodities guru Jim Rogers looks to 2007

Mr Rogers recommended children learn Chinese
Legendary commodities investor Jim Rogers told the international mining community to seriously invest time and money in China and keep following the bull market in the raw materials sector as investment themes for 2007.

Mr Rogers, who co-founded the Quantum Fund with George Soros, and is well-known as an author, traveller and academic was the keynote speaker at the 37th Minesite Forum in London.

"China is going to change the world for a long time. The 21st century is the century of China, but most people do not understand the full depth and magnitude of what`s happening there," he told delegates.

"The 19th century was the UK`s, the 20th century was dominated by America but China is the next great country in the world and, undoubtedly, will set the agenda in the coming years. The very best advice that I can give you is to teach your childen Chinese."

Mr Rogers pointed out that the Chinese are "amazing capitalists" with the average Chinese worker saving and investing 35% of his disposable income compared to the mere 1% that is saved by workers in the US.

"They (Chinese) all have televisions. They know how we live in the west and they are willing to save and invest to do it, which is the opposite of Americans who borrow to achieve their lifestyles."

Mr Rogers said he believed the US economy to be "out of control" and destined for a hard landing in the next few years, adding that the `strong dollar` policy of the current administration has debased the currency and added to the national debt.

"The US used to be a net creditor up until as recently as 1997, but is now the biggest debtor nation the world has ever seen," he said. "It is in debt by US$13 trillion - a figure that goes up by US$1 trillion every fifteen months".

Commodities, including both metals and agricultural products, however, are still in the middle of a bull run and remain the best source of growth income in the coming years. Rogers` own commodities index (RICI) showed growth of 253% between 1998 and December 2006 compared to 42% for New York`s S&P 500.

"The slowest bull market in commodities lasted 15 years and the longest 23 years which means that investing in commodities will be profitable until at least 2013 and up to 2021."

Rogers did warn investors to stick to commodities themselves rather than "overvalued" stocks which are buffeted by more than simple supply and demand metrics. He also pointed out that, because there is little or no correlation between commodities and other asset classes, they act as a natural hedge.

"Investing in commodity-producing companies can turn out to be an even riskier bet than sticking with buying the things outright. Supply and demand will move the price of copper, for instance, while the share prices of copper miners can depend on less predictable factors such as the overall condition of the stock market, the company`s balance sheet, its executive team, labour problems, environmental issues, and so on."

He also told delegates of one more important difference between commodities and stocks - commodities cannot go to zero, while shares in companies like Enron can and did.

On a later investor panel, Mr Rogers predicted that 2007 should be a fairly volatile year - borne out by his hunch that gold should trade in a fairly broad band between US$500-800/oz while oil will trade between US$40-80/bbl depending on the global political situation and whether there are any major corporate collapses like Enron or Worldcom. (December 12)