Business Insider : What drove gold prices higher for 12 years?
Jim Rogers : That's a very good question. Another question could be what's caused it to go down finally? What caused it to go up 12 years in a row was a 20 year bear market.
Gold had collapsed starting in 1980 and it went down for over 20 years. It went down substantially. So, when you have a very long extended bear market like that, everybody sells out, mines close, mines open
Then it was driven by the fact that we had a lot of money printing in the world, we had a lot of debt, a lot of crises around the world. So there were all sorts of psychological reasons, all around the world, not just in America, for people to buy gold.
Now what caused it to finally go down, and as much as I love India and Indians, they are the largest buyers of gold in the world. And India has a huge balance of trade deficit. The largest drivers are oil and gold. You can't do anything about oil so the Indian politicians are blaming their problems on gold. And they've taken many measures, and more measures are coming to diminish or even eliminate the import of gold. I'm not the only person who saw that. They've been pretty loud about it. That was the main catalyst or the straw which broke the camel's back which made gold start going down finally, after 12 years of going up. And the foundation had been built for over 20 years and many, many fundamental things came together. But then after 12 years of a bull market more mines started opening, more gold mines were formed and then the Indians said, among others, but mainly the Indians said we're going to stop all this.
And by the way the French have also recently come out with measures that you cannot buy more than, anything, in cash for more than €1000, to limit the purchase of gold. The Germans are also taking measures to make it more difficult to buy and sell gold. So you have a lot of governments coming together with measures against gold and silver, but especially the Indians. And the Indians are the largest buyers.
All these things came together after 12 glorious years because the correction is worse than it would have been otherwise because of the 12 years. So it all fits together what did happen, what is happening, what will happen in gold. I'm not selling my gold. But even though it may be a couple of years more
complicated base building, I fully expect the bull market to end in a bubble some day, and some day is not here yet. - in Houston Chronicle
Jim Rogers started trading the stock market with $600 in 1968.In 1973 he formed the Quantum Fund with the legendary investor George Soros before retiring, a multi millionaire at the age of 37. Rogers and Soros helped steer the fund to a miraculous 4,200% return over the 10 year span of the fund while the S&P 500 returned just 47%.
