Protect Yourself From Debased Currencies, Jim Rogers Style

Last week, Jim Rogers appeared on CNBC to talk about some of the issues in today’s economy. Sporting his typical Orville Redenbacher-like bowtie and suit, Mr. Rogers had plenty to say about recent actions from the Fed and what impacts it will have on our future. One of the main issues that he covered was the devaluing of the U.S. dollar, which has been a hot topic since the quantitative easing programs began in 2008 and our national debt pile quickly surged to nearly $16 trillion.

But as always, Rogers has a solution for those looking to protect themselves against a manipulated and flailing dollar. “The way you protect yourself when governments print money and debase the currency is you own real things” said Rogers. He went on to clarify that real things in his mind included the likes of gold, silver, rice, wheat, oil, and natural gas among other commodities. As always, he left a soft spot for agricultural assets, claiming that the “fundamentals are unbelievably good” [for more commodity news and updates subscribe to our free newsletter].

In the interview, Rogers also reiterated his point that he currently likes silver over gold, though for the time being he is buying neither, as he has previously predicted a 10%-20% drop in bullion prices in the short-term future. Finally, Rogers urged viewers that further money printing and currency debasement was on its way, and that investors should take preliminary actions to protect themselves against it. Short of becoming a farmer, which Rogers actually does suggest, we outline several ways to make a play on the advice of this legendary investor.

  • Rogers Intl Commodity Agric ETN (RJA): It is certainly not the most liquid agricultural commodity fund in the space (DBA takes the cake by a massive margin), but being that it tracks the Rogers International Commodity Index, it seems to be the most appropriate choice given the circumstances. The fund invests in 20 different agricultural commodity futures and is up over 11% this year [see also 50 Ways To Invest In Agriculture].
  • iShares Silver Trust (SLV): A no-brainer given that Rogers has specifically touted this fund in the past as well as his preference for silver in the current environment. SLV is dangerously close to breaking through the $10 billion mark for assets and trades more than 9.4 million times per day.
  • SPDR Gold Trust (GLD): The commodity king and the second largest ETF in the world has been an investor favorite for a number of years, despite controversy surrounding the nature of its holdings. You can use GLD both as a trading instrument and a long-term hold. Note that the fund will be especially volatile today given Bernanke’s speech at Jackson Hole.
  • Market Vectors Emerging Markets Local Currency Bond ETF (EMLC): While Rogers certainly never mentioned anything about emerging markets bonds, this fund will present a strong way to play a dollar debasement. This fund invests in bonds from developing economies all around the world by using the local currency, giving you access to monies like the Malaysian ringgit, Chinese renminbi, and the Mexican peso among others.

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Disclosure: No positions at time of writing.

This entry was posted in Actionable Ideas, Agriculture, Asset Allocation, Commodity ETFs, Commodity Futures, Energy, Gold, Natural Gas, Precious Metals, Silver, WTI and tagged , , , . Bookmark the permalink.

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  • Felix Mosso

    I do enjoy your daily commodity HQ newsletter, it is right to the point.