"Oct. 20 (Bloomberg) -- Investor Jim Rogers bought gold coins in Frankfurt last week, added more agriculture commodities today and is considering industrial metals and crude oil.
``Agriculture is cheap,'' Rogers, chairman of Rogers Holdings, told reporters at an ETF Securities Ltd. meeting in London today. ``The fundamentals for most commodities are not impaired.''
The 19 commodities in the Reuters/Jefferies CRB Index have dropped 21 percent this year as falling equities, reduced lending and slumps in manufacturing and construction trimmed demand. Copper is down 47 percent from a record in July.
``We're in this period of forced liquidation,'' Rogers said. ``This bull market in commodities is here because of supply and demand.''
``Excessive'' amounts of cash added to the banking system have ``always led to rising prices,'' Rogers said. The Federal Reserve rescued American International Group Inc. with an $85 billion loan last month, the U.K. last week announced plans to spend 37 billion pounds ($63.4 billion) on Royal Bank of Scotland Group Plc, HBOS Plc and Lloyds TSB Group Plc and ING Groep today got a 10 billion-euro ($13.3 billion) lifeline from the Netherlands.
Commodities had gained for six years before 2008 as underinvestment in refineries, mines and land sent prices for oil, gold and wheat to records earlier this year. Oil has dropped 50 percent from a record $147.27 a barrel in July as tightening credit choked demand.
``Farmers cannot get sufficient loans to plant their crops at the moment even though they've been farmers for decades,'' Rogers said. ``Nobody can get a loan to open a zinc mine. People cannot get loans for their inventory which is part of the forced liquidation. So all of this also means even less supply.''
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net. Last Updated: October 20, 2008 11:46 EDT "
``Agriculture is cheap,'' Rogers, chairman of Rogers Holdings, told reporters at an ETF Securities Ltd. meeting in London today. ``The fundamentals for most commodities are not impaired.''
The 19 commodities in the Reuters/Jefferies CRB Index have dropped 21 percent this year as falling equities, reduced lending and slumps in manufacturing and construction trimmed demand. Copper is down 47 percent from a record in July.
``We're in this period of forced liquidation,'' Rogers said. ``This bull market in commodities is here because of supply and demand.''
``Excessive'' amounts of cash added to the banking system have ``always led to rising prices,'' Rogers said. The Federal Reserve rescued American International Group Inc. with an $85 billion loan last month, the U.K. last week announced plans to spend 37 billion pounds ($63.4 billion) on Royal Bank of Scotland Group Plc, HBOS Plc and Lloyds TSB Group Plc and ING Groep today got a 10 billion-euro ($13.3 billion) lifeline from the Netherlands.
Commodities had gained for six years before 2008 as underinvestment in refineries, mines and land sent prices for oil, gold and wheat to records earlier this year. Oil has dropped 50 percent from a record $147.27 a barrel in July as tightening credit choked demand.
``Farmers cannot get sufficient loans to plant their crops at the moment even though they've been farmers for decades,'' Rogers said. ``Nobody can get a loan to open a zinc mine. People cannot get loans for their inventory which is part of the forced liquidation. So all of this also means even less supply.''
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net. Last Updated: October 20, 2008 11:46 EDT "
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