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Precious Metals vs. Commodities

Stocks in this article: JPM

VANCOUVER ( Silver Gold Bull) -- I had the opportunity to listen to an interview with noted commodities guru Jim Rogers, which is never a bad investment of one's time.

Rogers is both very astute and a straight talker, two "commodities" of which I'm sure that he would purchase if he could since both are clearly in short supply in the 21st century.

The central topic on the mind of Rogers' interviewer was Federal Reserve Chairman Ben Bernanke's farcical testimony before the U.S. Congress. That lovefest had all the interrogative value of spending the day watching Sesame Street. Rogers was also totally unimpressed:

...Mr. Bernanke is going to print more money...I wouldn't pay much attention to the man...He only knows one thing, and that's what he's going to do...

The interview then proceeded to Rogers' specialty: the world of commodities. He remains totally committed to commodities over the long term, rightfully pointing out that as the global economy continues to be drowned in mountains of the bankers' paper currencies, these hard assets must soar in price as all that paper collapses in value.

When asked to compare the different commodity sectors, Rogers was also unequivocal. He was most bullish with respect to "soft" commodities and industrial commodities, while less bullish on the monetary commodities gold and silver (at the present time).

It's here that I'm going to dare to differ with Rogers to a degree.

I wouldn't presume to contradict his long-term prognosis on the future of commodities in a commodity-starved world. In fact, I completely agree with him.

However, it is over the short/medium term where I believe I detect a small inconsistency in his analysis of these markets.

The inconsistency lies in the fact that Rogers fervently believes (as do I) that we are on the verge of a flight out of paper. He ranked the various forms of these fraud-currencies, and said he expected the holders of this paper to soon begin an exodus out of the most worthless of them -- specifically the U.S. dollar.

He also observes that once this exodus starts, there will not be enough stable currency remaining in the world for all of the U.S. dollar refugees (and other paper holders) to find a home.

This leads to the obvious question: Where will all those other trillions of dollars go?

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