Commods bull Rogers says boom far from over

Mon Jan 7, 2008 4:01am EST

By Tony Munroe

HONG KONG (Reuters) - The resources boom that saw oil hit the $100 barrier for the first time on Wednesday and propelled gold to a record is in no danger of petering out, says Jim Rogers, a long-time, high-profile commodities bull.

The American investor says he is convinced that a decade or more of gains lies ahead for the sector, even after oil hit the triple-digit mark that he has predicted for years, although a weakening U.S. economy could dampen some metals such as tin.

"I sound like a broken record, but it ain't over yet. It's got a long way to go," he told Reuters on Thursday by telephone from Singapore, where he is based.

"It's come a ways, but we may be in the fourth inning of a nine-inning ball game, to speak in U.S. baseball terms."

He declined to predict where the oil price CLc1 would be at the end of this year after a 57 percent rally in 2007. Oil prices have trebled since 2003, as long-term investors plough money into the sector on signs that the world would struggle to supply enough crude and fuel to meet fast-growing global demand.

The fall in the U.S. dollar -- another familiar refrain for Rogers, who co-founded the Quantum Fund with billionaire George Soros in the 1970s -- also fuelled buying.

"Commodities prices are going to go up no matter what happens to the U.S. dollar, even if it rises, because there are serious supply/demand shortages which have developed over the past 25 to 30 years," he said.

Rogers said he likes agricultural commodities but is avoiding vulnerable metals, such as tin, adding that he recently bought the Chinese renminbi , Japanese yen , and Swiss franc .

"I do know the price of oil, the price of all commodities, are going to go much higher during the course of the bull market, and the bull market's got another 10 to 15 years to go. In the end, everybody's going to be dumbfounded, including me, and I'm the bull."

U.S. MAY HURT METALS

Rogers, who is famously bullish on China, said the decline in the dollar is "turning into a disaster", and added a slowdown in the United States would cause pain for parts of the economy in China and elsewhere, and may hurt prices of some metals.

"If you're in real estate in Shanghai or Beijing or Hong Kong or something, you're going to get affected. If you sell to Wal-Mart (WMT.N: Quote, Profile, Research), you're going to be affected, and perhaps badly," he said.

"And that will have an effect on some commodities. Will it affect sugar? No, I doubt it. Will it affect tin? Perhaps. Will it affect cotton? I doubt it, but it will affect some places and some parts of the world economy," said Rogers, whose Rogers International Commodity Index rose 31 percent in 2007.

Rogers said he remains "extremely optimistic" about China, and is not selling his Chinese stock holdings, although he would not necessarily buy at current levels. He is also adding to his holdings of China's appreciating currency, the renminbi.

"I bought more renminbi yesterday, and certainly expect China to be the next great country in the world," he said, urging investors to "get your money out of U.S. dollars while you can".

"I am still short the investment banks in America, and these are the guys (Federal Reserve Chairman) Bernanke's trying to save. I think that's been the single area with the most excess -- that and home-building," he said.