I’ve spent the past four days at the Agora Financial Investment Symposium in Vancouver, an annual event sponsored by Agora Publishing. I was attracted mainly by the promise of an appearance by Jim Rogers, co-founder in 1970 of the Quantum Fund (which returned 3,365% in 10 years) and one of the most uncanny financial minds in the world. He accurately predicted the current commodities boom in 1997, and I’ve been following him since the mid-eighties when we was a regular on Louis Rukeyser’s Wall Street Week on PBS. Rogers is convinced that, in the same way that the 19th C was the century of the Brits and the 20th C the century of the Yanks, the 21st C is the age of the Chinese. He implored us to all make sure that our children and grandchildren learn to speak Mandarin. He also advised us that the boom in commodities was a long way from over, that the current boom would last until at least 2014, and probably longer than that, as a result of the rapid development of emerging markets such as China and India. He is also bearish on the U.S. dollar, as were all of the speakers at the conference. According to Rogers, and again echoed by many of the other speakers, U.S. stocks and bonds will be among the worst places to invest money over the next ten years, and that massive price inflation and steadily increasing interest rates are unavoidable.
I can’t agree with him more, and I’m putting my money where my hunch is. Farmland in Argentina and apartments in the U.S. That’s right, the U.S. With price inflation comes rent increases, and I can still fix my cost of capital now. With increased prices and interest rates comes higher costs to build. With higher transportation costs comes a move away from the suburbs (which will become the new slums) and back to the inner city. and they’ll keep moving away from the colder climates to the more moderate ones.
The theme of the Symposium was “View From the Peak”. They were referring to the Peak Oil theory, that we’ve already used up half the recoverable oil available. I’m not buying into that one. I think, and believe, that there’s lots of oil, and that demand and technology and higher prices have a tendency to uncover it. And I think that we’re also getting pretty darn close to a revolution in alternative sources of energy. oil may hit $200/barrel at some point, and I am in favor of high oil prices, but I think we’ll see $50/barrel at some point too. Probably soon after the Olympics.