china

All posts tagged china

Last week, gold prices briefly touched $1,100/oz before settling just under that number.  Apparently the Indian government decided to sell US dollars and make a 200 ton gold purchase from the IMF, which created the spike in gold prices. Right now, the spot price for the yellow metal is $1,106.

price_of_gold

The IMF still has another 203 tons of gold to sell and the hot favorite to make the purchase has been China.  However, according to a report by Reuters, its a lot cheaper for China to buy domestically mined gold than purchase bullion from the IMF at the current spot price. According to Li Yang, a former adviser to the People’s Bank, “China’s gold is much cheaper than that.”

You may not realize it, but China is the world’s No. 1 gold producer, and its mine costs are much less than $1,100 per ounce. And given China’s propensity to put national well-being over any private individual or firm, they’re likely to just pay for the gold being mined at cost, which would be a lot lower than the spot price.

According to another Chinese Central Bank official,

China is the world’s biggest gold producer, so there’s no urgency for us, as there is for India, to snap up big volumes whenever they come onto the global market. It’s cheaper for us to buy gold from the Chinese market, but it doesn’t help diversify our huge foreign exchange reserves.

To diversify our portfolio, we should spend dollars on things like gold. But the catch is that even if China bought half the world’s annual gold supply, it would only cost a few tens of billions of dollars, which is tiny compared to China’s huge reserves.

China has 2.27 trillion dollars in reserves. Spending 25 Billion a year buying gold is chump change. The question that’s relevant is whether they will, because that will put upward pressure on gold prices.

While no one knows whether China will or will not buying gold on the open market, the one thing we do know is that the monetary base of the US Dollar is growing exponentially making each existing dollar less valuable. Check out this graph from the St. Louis Fed:

money_supply

While its not obvious from the graph, the monetary base has in the past year. Its true that this money hasn’t worked its way in to the economy, but if and when it does we should expect higher inflation and a spike in prices of real assets like gold, silver and real estate.

If I had a few trillion dollars, I’d be buying a few hundred tons of gold every year!

In the last post we saw that China was slowly diversifying away from it’s usual investments in US Treasury Bonds and investing in hard assets, natural resources and maybe other currencies.

There probably a very good reason why the world’s second largest holder of US Dollars is weaning itself away from bonds issued by the world’s largest debtor nation.  If you believe the Chinese know what they are doing, it might make sense to imitate their investment strategy.

While you don’t need to buy $80 Billion worth of gold, you might do well buying gold equal to at least 5% of your net worth. Gold is not an investment in itself but a historic store of value. Regardless what anyone tells you, the US Dollar is not a store of value. During times when governments print money hand-over-fist, gold typically does well. In fact, over the past 10 years, gold has appreciated against every single currency.

You can either buy the physical gold, gold ETF(GLD) & gold mining stock ETF (GDX), gold certificates or a custodial account. You can also buy silver and silver ETFs in a similar fashion. There was a recent Chinese news report recommending Chinese investors buy silver since its a better value than gold!

You can also exchange your US dollars directly for foreign currencies. Everbank currently has a Marketsafe BRIC CD, which invests in a basket of Brazilian Real, Russian Ruble, Indian Rupee and Chinese Remnimbi.  This CD doesn’t pay any interest but the principle is protected against loss! But if you’d rather take a risk and earn some interest, Everbank has a slew of CD products in several European and Asian currencies.

Another option are the CurrencyShare ETFs for Australian Dollars(FXA), British Pounds(FXB), Swiss Francs(FXF), Japanese Yen(FXY) and Euros(FXE).  Another ETF worth considering is UDN, an inverse US Dollar ETF, which is a basket of the above mentioned currencies. (However, inverse ETFs may not accurately follow the downward movement so you’re cautioned to do some research).

I do not recommend forex-trading as a means of hedging yourself against Dollar devaluation. Forex trading is a highly leveraged, zero-sum speculation. In a zero-sum game, a participant can only win at the expense of another participant. In fact, it may be considerably less than zero-sum becauase your brokerage can run your stops (which it can see) and effectively trade against you.

If you are thinking of investing in currencies, definitely check out Everbank’s free newsletter, the Daily Pfenning. It provides a very informative (and entertaining) look at global economics and investing. Actually, you should subscribe if you do any sort of investing! Everbank also has a low-cost custodial account for gold and from time to time (whenever the price of gold drops dramatically) they offer a MarketSafe (which means principle-protected) Gold CD. Sign up for the newsletter and they’ll inform you whenver they come out with new products.

If you have a penchant for natural resources, you should look into Master Limited Partnerships (MLPs) like Tortoise Energy (TYY) or Kinder Morgan (KMP). Both pay a juicy dividend that is considered a return of principle and thus non-taxable (although it does alter cost-basis). However both have appreciated significantly this year. Canadian Royalty Trusts like Enerplus Resources (ERF)  are also an option.

You can also buy natural resource stocks like Rio Tinto (RTP) or BHP Biliton(BHP). China has been trying to buy multi-billion dollar stakes in companies like these and is currently unsuccesful. If you think that a day may come where Chinalco will be successful, you might want to get in before that happens.

IRSA International (IRS) is an Argentinian company that trades on the ADRs.  It owns farm land, resorts, hotels and shopping malls in prime locations.  After decades of “quantitative easing” (another word for printing money) wreaked havoc on their economy and standard of living, Argentinians don’t trust banks or central bankers. They trust gold and farmland. The way the US economy is going, we too may come to that same conclusion. Just to be safe, I bought some of the stock. On the other hand, you might be better off buying farmland or a ranch for hunting. I’m pretty sure, buying farmland is next on China’s list!

Disclosure: I own ERF, TYY,FXA, IRS, Everbank MarketSafe Japanese REIT CD, GDX and physical gold/silver.

Here’s a news clip from nearly 4 weeks ago, about how and why China is moving away from US denominated assets and buying tons of gold instead. It looks like the Chinese believe there’s a threat of inflation looming.

Now there’s absolutely no reason to mimic the investment strategies of one of the world’s largest creditors to the USA, but if you think they’re doing a good job of managing their economy you might want to give it some thought.

I just read this interesting article in the Financial Times. Seems like China has tired of US dollars and is looking to get rid of them.

Beijing Bets on Bullion

 By Patti Waldmeir in Shanghai , Financial Times, 6 May 2009

China is expected to keep buying gold to diversify its vast foreign reserves after it recently revealed it had been secretively buying bullion.

Beijing and Shanghai-based gold industry analysts said the country had almost doubled its bullion holdings. But they said China was likely to make as many purchases as possible within its borders, rather than turn to international markets where it could push up gold prices.

Beijing’s exact gold purchasing intentions are a state secret, but industry analysts are betting on more purchases as Beijing has been clear about its desire to diversify its foreign reserves away from the US dollar. Although gold is quoted in dollars, its price usually rises when the dollar weakens.

The analysts base their bet, at least in part, on the history of another buyer: Russia. After Moscow announced it was buying bullion, it regularly disclosed information revealing almost monthly increases in its gold assets.

“I’m absolutely sure that they will continue buying because China’s gold holdings are very small in terms of the size of its economy and the growing significance of its currency,” says Paul Atherley, managing director of Leyshon Resources in China. “But we will find out about it only after they have done it.”

China’s current gold reserves represent only about 1.6 per cent of total foreign reserves, a vastly smaller percentage than the world’s average of 10.5 per cent. Nevertheless, its percentage is similar to the 2.2 per cent in Japan, the world’s seventh-largest holder. The challenge for Beijing is to attain a similar diversification, requiring large amounts of gold, without disturbing the market.

Hou Huimin of the China Gold Association, forecast that China’s gold reserves could rise in the long term to as much as 5,000 tonnes. “It won’t be a leapfrog achievement but a gradual increase along with the country’s economic status.”

One potential source of gold for China is the International Monetary Fund’s expected sale of about 400 tonnes of bullion. Analysts said Beijing could try to purchase a block of that sale in an off-market agreement.

China last year overtook South Africa as the world’s largest gold producer and is estimated to have produced 282 tonnes of gold. Some gold from state-owned producers goes directly into Beijing’s gold stockpile every year. Gold purchases from state-owned producers can be made secretly and at below-market prices, making them more attractive than international purchases.

In addition, turnover at the Shanghai gold exchange rose nearly threefold between 2007 and 2008 but it is impossible to know how much of that, if any, may have been reserve buying, analysts said.

I wonder if they’re buying any American Buffalo Gold coins 😉 The US mint considers it a bullion coin.

Here’s an excerpt from a recent interview with Jim Rogers on why he prefers investing in China over India.

High oil prices, inflation, food prices etc have hit countries like India very hard. How should counties like India tackle the situation?
• Inflation affects everyone. Not just India. We pay the same price for copper. Copper price is the same in Australia, Germany and the US and India. India is not getting any worse than other countries. Except for the fact that the Indian government spends periodically more money in controlling inflation. The problem with India is that your politicians are worse than American politicians. You know Indian politicians believe and argue that the cause for inflation is commodities trading. How absurd is that.

Recently India banned Futures trading in some commodities like rice, wheat, rubber, potato etc to control price rise and inflation.
• It is the same tactic that politicians have done for hundreds of years everywhere in the world. Politicians would blame for anything wrong on three groups of people. They blame financiers/financial types. They blame foreigners: It is always good to blame foreigners. And they blame the Press. They blame you guys for commodity inflation in India. If the Press is not writing about inflation, we would not have a problem, politicians would say. It is absolutely insanity.

India banned Futures trading in some commodities without any logic or reasoning and study. And it has not done anything good for commodities in India or in the rest of the world. The commodity prices are still up and up. India needs to understand that there is no easy solution to high prices. As prices go up, people use less of anything and people would continue to produce more and that has always been there in the boom market. I read that India produces lots of foodgrains and do not have storage facilities and tonnes of rice and wheat are destroyed in public sector storage facilities.

How sad it is. It is terrible thing to happen. So let India do things to protect commodities rather than ban Futures trading in them. By banning commodities in boom market, the Indian government is making things worse. Look at China. The Chinese instituted price controls. Price controls have been around for thousands of years. They always make things worse. If you tell somebody that rice is only Rs 2, you have no other ways.

If you tell a farmer that you can sell rice only for Rs 2, he will tell I am not going to produce any more rice. Farming is hard work. I cannot make any money with price controls by producing and selling rice for Rs 2. So then you have less rice and shortage of rice. Even Romans had price controls, it never worked. So the Indian government is making things worse for India. It has been making things worse for the people in the last 50 or 60 years.

Some politicians in India blame commodity Futures trading as the reason for price rise; inflation is a big political issue in India.
•By banning commodity Futures, food prices would not go down. Because people sell in any prices they want to in Futures. So banning Futures is a senseless decision. In commodities market, we know what the price of wheat is. There is a public price for wheat according to demand and supply world over. So India banning Futures does not have any effect on wheat market. Indian government instead of being transparent and serious is creating lots of black market by banning Futures trading. It is going to make lots of people desperate. Politicians have been doing the same thing for many years, all over the world. Not just in India. It is worst for all of us.

What is the reason for the global food crisis now?
• The number of hectares of global wheat farming has declined over the years. The inventories of food are in the lowers ebb now in the last 50-60 years. In the last 30 years, farming has been in a terrible state. There is a terrible shortage of farmers now across the world. Young people do not go for farming. They study computers and get jobs. All the farmers in the world are old now. They are all men. Young people do not go to farms these days because farming is a hard physical job.

Seeds, fertilizers, tractors…there is a shortage for these stuff. We have a shortage of even tractor tyres now. That is the reason why we have shortage of food and there is a food crisis. It is not again speculators who have created the food shortage. Speculators take delivery of wheat. They don’t hoard wheat; it is the government that is hoarding wheat. It is the governments that are making the prices higher. Argentina says you cannot export wheat. A lot of counties say you cannot export wheat. The governments should call farmers to produce more and invite more people to farming by offering incentives.

When farming is coming down, governments like in India are trying to introduce price control mechanisms and bring down prices, and ban Futures. So things are getting worse. Things will be bad if it goes like this way. The food crisis will get worse, if countries act like this way. There will come a time when people will not get enough food. They are going to starve. The world is going through several weather problems. There will be droughts. So things are getting worse for farmers. I promise politicians who rule us are not going to go to the fields and cultivate. Do you think your politicians will go to the fields and work hard till evening to raise more rice? No way.

US President George Bush recently commented that it is the large population in countries like India and China that are causing the food shortage and crisis.
• I don’t agree. Look how things are blown out of proportion by politicians. Why can’t the people in Asia eat and live happily? Is it the prerogative of the US that only they should eat? There are three billion people in Asia. Thirty yeas ago Mao Tse-Tung was still running China. Thirty years ago Indira Gandhi was running India. Vietnam was destroyed.

Now there are three billion people in Asia, working hard, saving and investing. They want to eat more and they should. There is nothing wrong in that. Why should the developed world say that you should not eat? That is discrimination. I hope Asia continues to consume more so that their standards of living would go higher. All the western politicians who say that Asia should not eat more, let them go to the fields and work hard and produce more wheat, rice and maize so that food prices do not go higher.

Do you think India and China are driving the global commodities prices?
• Not just India and China. Most countries are driving the global commodities prices. America consumes lots of sugar, wheat and petrol. Europe does, everybody does. If America stops using petrol, there will be lots of petrol available in the world. If Europe stops eating wheat, there will be lots of wheat available. So what I want to say is that everyone is driving the global commodities prices. Everyone in the world is driving the demand for everything.

Which is the commodity you are most bullish on these days? Gold or Crude Oil?
• I am not particularly bullish on a commodity. I am in fact bullish on all commodities. I am not a good market timer. I am a very good or a very bad sure time trader. So I have no idea. I own all the commodities. I go to commodities based on historic fundamentals.

You recently said that it is the right time to invest in agri-commodities. Is there great investing opportunities in agri-commodities?
• I have bought into agri-commodities recently. I am an admirer of agri-commodities, and I hope there are great investing opportunities there. I make plenty of mistakes. But I try to buy commodities cheap. And agri-commodities are cheap and thus hold great investing potential.

What do you think of Indian stock market? Is it overheated and overpriced?
• It was certainly overheated, and that is why it has come down crashing recently. I am not a good judge of the Indian stock markets. Sometimes I get the Indian stock markets exactly right. Sometimes I get it exactly wrong. So I am not a good judge. So, I would not buy Indian stocks because it is too high. And your government continues to do stupid things like don’t trade in commodities. So if I am a foreigner I cannot invest in Indian commodities. It is sad. Vietnam recently said all the problems is because of importing gold. So don’t import gold. So Vietnamese cannot import gold.

Most astonishing thing. So governments keep doing these kinds of things. Vietnam said their problems are because people have been buying gold. Come on, how crazy can you go? Don’t worry; politicians can go crazy at any lengths. You know America said there were weapons of mass destruction in Iraq. There were not. They spent hundreds of thousands of billions and killed tens of thousands of people to find those weapons. So politicians do a lot of crazy things.

Among the three emerging nations, Russia, India and China, which one would you rate first as an investment destination?
• China, of course.

Why not India? Can you compare China with India?
• Indians have the worst bureaucracy in the world. India learned bureaucracy from the British. Indian bureaucracy has remained stagnant. Just stagnant. They do what they think only. There is no proper education, no infrastructure in India. It is the most wonderful country in the world. I admire India’s diversity. I tell my friends, if you can only visit one country in your life time, go to India. India is an amazing country.

But as a place for investment? Oh, no, I would think twice. Even Indians who have been doing great business elsewhere in the world, and when they go back to India to do business, it has not been a good experience for them. Many of them get out of the business and go back to other countries to do business.

You have driven through India?
• I have driven through India a couple of times extensively. In 1988 and 2001. It was spectacular; it was wonderful. I loved it. I love traveling across any place. You learn a lot about that place while traveling. The highway from Kolkata to Mumbai should be one of the greatest highways in the world. But the Indian infrastructure development is so bad, that it took seven days for me to cover Mumbai and Kolkata highway. But everyday in India was an adventure, which I loved. Yes, it is a great place to travel. But if you looking for efficiency and investment, it is not the right place yet.

So it is better to go to China?
• Yeah, in China, a truck driver travels 70 km an hour average. China has the best roads in the world. On the Mumbai-Kolkata road, a truck driver goes 20 km an hour. That shows the efficiency between the nations. To cross state boarders in India, it is a nightmare. In China, it is all great. In China, they do what they say. In India, the government says lots of things, and they do not do it. Yes, smart Indians make lots of money. There are several success stories in India. India has the most beautiful women in the world, but has the worst politicians and bureaucrats.

If you haven’t read his latest book, A Bull In China, I strongly recommend it.

Jim Rogers recently gave a presentation in Vancouver, Canada where he reiterated his belief that we’re in the middle of a commodities bull market. His logic is simple: the supply of paper currencies in increasing while the supply of hard commodities like aluminum and copper is dwindling. He also believes that there will be a long-term economic shift to China.

Here’s a condensed version of his speech, courtesy of the kind people at Agora Financial Publications.

The commodity bull market has a long way to go. This bull market is not magic. It’s not some crazy “cycle theory” I have. It does not fall out of the sky. It’s supply and demand. It’s simple stuff.

In the 80s and 90s, when people were calling you to buy mutual fund and stocks, no one called to say. “Let’s invest in a sugar plantation.” No one called and said, “Let’s invest in a lead mine.” Commodities were in a bear market and in a bear markets people do not invest in productive capacity. They never have. Perhaps they should have, but they’ve never done it throughout history and probably never will. There has been only one lead mine opened in the world the last 25 years. There’s been no major elephant oil fields [of more than a billion barrels] discovered in over 40 years.

Many of you were not even born the last time the world discovered a huge elephant oil field. Think about all the elephant fields in the world that you know about. Alaskan oil fields are in decline; Mexican oil fields are in rapid decline; the North Sea is in decline. The UK has been exporting oil for 27 years now. Within the decade, the UK is going to be a major importer of oil again. Indonesia is a member of OPEC. OPEC stands for the Organization of Petroleum Exporting Countries. Indonesia is going to get thrown out because they no longer export oil, they are now net importers of oil. Malaysia has been one of the great exporting countries in the world for decades. Within the decade, Malaysia is going to be importing oil. 10 years ago, China was one of the major exporters of oil, now they are the 2nd largest importer of oil in the world. Oil fields deplete, mines depletes. This is the way the world’s been working for a few thousand years and it will always work this way. So supply has been going down for 25 years.

Meanwhile, you know what’s happening to demand. Asia’s been booming. There are three billion people in Asia. America’s growing. Most of the world has been growing for the last 25 years. So supply has gone down and demand has gone up for 25 years. That’s called a bull market.

One of the things you’ll find if you go back and do your research is that whenever stocks have done well, such as the 1980s and 90s, commodities have done badly. But conversely, you find that whenever commodities have done well, such as the 1970s, stocks have done poorly. I have a theory as to why this always works, but it doesn’t matter about my theory. The fact is that it always works this way and it’s working this way now.

So before I set off to my second trip around the world, I came to the conclusion that the bear market in commodities was coming to and end. So I started a commodities index fund. [Editor’s note: An ETN based on the Rogers International Commodity Index trades on the AMEX under the symbol: RJI.] This is an index fund. I do not manage it. It’s a basket of commodities we put in the corner. If it goes up we make money; if it goes down we lose money. But since Aug 1st 1998, when the fund started, it is up 471%.

I [mention this index] to show you that the commodity bull market is not something that will happen someday. It’s in process right now, and it’s going to go on for years to come, because supply and demand are out of balance. And by the time we get to the end of the bull market, commodities will go through the roof. There will be setbacks along the way. I don’t know when or why, but I know they are coming, cause markets always work that way. Commodities have done 15 times better than stocks in this decade and they’re going to continue that [trend].

You remember my little girls. My 5-year old never owns stocks or bonds; she only owns commodities. She’s very happy owning commodities. She doesn’t care about stocks and bonds, but she knows about gold. I assure you, she knows about gold.

Some of you probably diversify, or believe in diversification. I do not diversify; I am not a fan of diversification. This is something that stockbrokers came up with to protect themselves. But you’re not ever going to get rich diversifying. I assure you. But if you DO diversify, commodities are the best anchor because they are not going to do what the rest of your assets are going to do.

I will give you one brief case study about oil, because it’s one of the most important commodities. Some of you know that oil in Saudi Arabia is owned by a company called ARAMCO. It was nationalized in the 70s. They threw out BP and Shell and Exxon. But the last Western company to leave did an audit [of Saudi oil reserves] and came to the conclusion that Saudi Arabia had 245 billion barrels of oil. Then in 1980, after 10 years, Saudi Arabia suddenly announced that it had 260 billion barrels of oil. Every year since 1988 – 20 years in a row – Saudi Arabia has announced, “We have 260 billion barrels of oil.”

It is the damndest thing. 20 years; it never goes up; it never goes down, and they have produced 67 billion barrel of oil in this period of time. When nuts like me go to Saudi, we ask, “How can this be? How can it be that they always have 260 billion barrel of oil?” (By the way, last year they said they have 261 billion barrel of oil). And the Saudis say, “You either believe us or you don’t,” and that’s the end of the conversation.

I have never been to the Saudi oil fields, and even if I had, I wouldn’t know what I was looking at. But I do know something is wrong. I know that every oil country in the world has a reserve problem, except Saudi Arabia of course. I know that every oil company in the world has declining reserves. So I know that unless someone discovers a lot of oil quickly, the surprise to most people is going to be how high the price of oil stays and how high it goes eventually. That is the supply side. Let’s look at the demand side.

The Indians use 1/20th as much oil as their neighbors in Japan and Korea use. The Chinese use 1/10th as much per capita. There’s 2.3 billion people in India and China alone. Well, the Indians are going to get more electricity. The Indians are going to get motor scooters. They are going to start using more energy, so are the Chinese. But if the Indians just doubled the amount of oil used per capita, they would still use only 1/10th of what the Koreans use. If the Chinese doubled their oil use, they would still be using only 1/5th what the Japanese and the Koreans are using. So you can see what kind of pressures there are on the demand side for oil and energy, at a time of terrible stress on the supply side. These are simple things.

So I would urge you are to take a lesson from my little girls. My little girls are learning Chinese. My little girls are getting out of the US dollar. My little girls own a lot of commodities. I would urge you to do the same.

While, I’m not going to be learning Chinese any time soon, I’m still holding on to my gold, silver and energy stocks. They’ve taken quite a beating this year, but I they’re still in a long-term bull market. Even though the US dollar has shown some strength in the past 2 weeks, nothing has changed in the fundamental economy. The US government is still broke, it looks like we might have a Trillion Dollar deficit by 2010, and  yet it still willing to bail-out Fannie Mae and Freddie Mac at the tax-payers expense.

Jim Rogers, co-founder of Quantum Fund along with George Soros, achieved 4,000% returns in the 80’s. He’s famous for being bearish on the US economy and the US Dollar. However, he’s currently bullish on the Dollar, saying that everyone is negative on it.

In his opinion, when too many people take one side of a trade, the opposite is likely to happen. The Dollar has been in a bear market since 2002, but it turned bullish during 2005. He thinks its over-sold and in the short-term at least, due for a correction.

While I’m not buying any Dollars, I could definitely use a spike in the USD for my entry point into Australian Dollars.

Many claim the dollar’s weakness is helping offset a dropoff in U.S. economic demand that’s come from a recession in the housing market. Goods priced in dollars are cheaper in Europe or Australia, and manufacturing in the U.S. becomes more attractive for companies that export goods. That helps preserve jobs in the U.S.

But a debased currency is a hefty price to pay for growth, and not an easily reversible one, says Rogers. It breeds inflation and weak purchasing power, which ultimately undermines any short-term boost in growth. He reiterated his belief that the U.S. dollar is bound for a decline similar to the British pound’s 50% decline in the early 1980s.

He’s not very impressed with Bernanke lowering the interest rates either.

“The fool went and cut interest rates with the stock market down 6%,” he says of Fed Chairman Ben Bernanke. “What’s he going to do when stocks are down 30%?”

He says Bernanke and the Fed are ignoring obvious evidence of inflation in food, education and entertainment prices.

“This is a man who’s made a career learning about printing money and now we’ve handed him the printing press,” he says, likening Bernanke to his predecessor Alan Greenspan in their penchant for saving the markets by cutting rates and inflating asset bubbles.

Rogers is a believer in the global growth story, particularly China’s. He said he’s sold out of all his emerging market investments except for his investments in China, claiming the other emerging nations have “been exploited by 20,000 MBAs running around looking for markets.”

Rogers hopes he’ll be able to pass down his Chinese stocks to his 4-year-old daughter, but adds he may be forced to sell.

“If a bubble develops in China in the next year or two, I’ll have to sell because bubbles end badly,” says Rogers, pointing to Japan, where stocks remain well below their levels of over a decade ago. But he believes Chinese stocks would have to double before he’d feel forced to sell.

The self-proclaimed “inactive investor” is not buying much these days. He’s bullish on commodities, though he agreed he’d be hard pressed to find anything to buy at these levels. If he’d buy any commodity it would be in the agricultural space rather than the metals, though he declined to specify one. He’s short the U.S. investment banks along with the dollar.

Next to China, Rogers says he’s long gold.

I’ll undoubtedly buy more gold,” he says, predicting it will double from here in the next few years.

In case you didn’t hear, China executed its FDA chief today. The had sentenced him to death just over a month ago. And instead of waiting for 10 years to exhaust the appeals, they just killed him and put an end to the story.

In one fell swoop, China just reduced the average life expectancy for its FDA chiefs!

[source: http://www.newstarget.com/021930.html]