This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Precious Metals vs. Commodities

Rogers' implicit answer is that this paper will flow into his favored soft and industrial commodities. However, this ignores a large and obvious practical issue: the absolute need for functional currency. Once we ditch the last of our banker-paper in favor of holding our wealth in some instrument that actually has value, we cannot simply all load up on commodities.

People are not going to go to their local shopping mall lugging bushels of wheat, barrels of oil, or truckloads of lumber in order to do their daily shopping. However, they will be quite happy to conduct their commerce using silver and/or gold coins, since as a species we have collectively had thousands of years of practice in using this only form of "good money."

What we have here is the world's foremost expert on commodities warning us that we are about to experience a shortage in a "commodity" with which our modern economies cannot function: usable currency.

Then there are silver and gold. These precious metals have a 5,000-year track-record of being the world's ultimate "safe havens" because they are the only perfect form of money we have ever been able to devise.

At the same time, thanks to (literally) a century-long propaganda campaign to cause people to forget the true status of these precious metals, gold and silver have never been so under-owned as assets in the history of our species.

Even when times are good, people have typically held between 5% and 10% of their wealth in gold and silver, while in times of peril those ratios typically soar.

With entire nations going bankrupt, and with the highly respected Jim Rogers predicting an exodus out of many paper currencies (such as the U.S. dollar), we have never experienced an era of such extreme economic crises in our entire lives.

Yet, instead of even holding the "normal" 5% to 10% component of wealth in precious metals, Western investors currently hold only about 1% of their wealth in these assets.

Consequently, with demand/ownership at a temporary and artificial trough just as we are (apparently) about to experience an explosion in demand for these metals, the current rock-bottom prices for gold and silver cannot last.

Here Rogers also had some guidance to offer investors.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs