Jim Rogers: Play Commodities, If War Breaks Out

ET Now: When it comes to the geopolitical tensions from Ukraine and Gaza, do you expect any repercussions on equity as well as commodity markets? Or, any change in risk aversion?

Jim Rogers: They've already had an impact on some markets. Last week, US stock markets were down 2-3 per cent. This means somebody is paying attention. Unfortunately, we have had problems in Gaza for at least 40 years now and I am afraid we might have another 40 years given where things are going. Eruptions break out and they always have an effect and will continue to do so. We have all been making many mistakes there for a long time now; and I am afraid we will continue to do so.
Is this the beginning of the Third World War? I doubt it. Someday, one of them - Gaza or Israel - may get out of control. But fortunately, too much of the world is focusing on it now to rein in the woes.
Ukraine is more dangerous because unfortunately nobody seems to be getting it right ... This is going to erupt further, but it is more dangerous because there are too many people involved.
ET Now: Wider risk-aversion throws in investment opportunities. Any regions and economies that are looking good to you at this juncture?
Jim Rogers: If war breaks out, then what you play is gold, oil, commodities, etc. War is not good for anything except for real assets because people need real assets during the time of war - whether they are involved in the war or just protecting themselves. Other than that, I do not see any of this being good for anybody or anything.
ET Now: What do you make of the statements coming from FOMC and the recent data from the US? By when do you expect to see a rise in interest rates?
Jim Rogers: It is clear to me that what is going to happen is that as the US pulls back (stimulus), interest rates will go higher or stock markets will go down eventually, or both will happen. Unfortunately, when that happens, people in Washington - bureaucrats, academics, etc - are going to get scared or will panic. When people call them up and tell them that the pain is too great, they are going to relent and start printing money again ... Markets will breathe a sigh of relief, they will rally, go up for a while; but unfortunately that may then lead to the last leg of this poor market because rather than staying the course - which central banks have rarely done in the past few decades - they say everything is okay, but things will just get worse.


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%.