"Understand the full significance of what is happening"

Bloomberg has full coverage of a presentation made by Jim Rogers yesterday at an ABN Amro investors' conference in Amsterdam. The video is of poor quality (audio-only) and the report glosses over some important points, but they are both worth a look.

The headline of the report indicates the long-time commodities bull is shifting all his assets out of U.S. dollars and into Chinese yuan - something about the Federal Reserve, debasement of the currency, and extreme pessimism about the U.S. economy.

Since the Fed lowered U.S. interest rates on Sept. 18, the first cut in four years, the dollar has fallen 2.8 percent against the euro and touched a record low yesterday. Gold rose to a 27-year high and platinum jumped to a record.

"It's the official policy of the central bank and the U.S. to debase the currency,'' said Rogers, a former partner of George Soros.

"The U.S. dollar is and has been the world's reserve currency, the world's medium of exchange,'' he said. "That's in the process of changing. The pound sterling, which used to be the world's reserve currency, lost 80 percent of its value, top to bottom, as it went through the whole period of losing its status as the world's reserve currency.''

The video is about ten minutes long and gets off to a rollicking start:

China is the next great country in the world. Whether you like it or not. A lot of people in America and a lot of people in the West don't like the idea that China is the next great country in the world.

I know they call themselves Communists in China, but I will tell you that they are among the best capitalists in the world, maybe THE best capitalists in the world right now.

In China they save and invest over 35 percent of their income, in America we save and invest less than two percent of our income.

In China, when they come to work they don't say, "How many days holiday do I get", they say, "How many days can I come to work".

They want to live the way we do - they know how we live in the West - they're willing to work as hard as they have to and they're willing to save and invest as much as they have to.

The 19th century was the century of the U.K., the 20th century was the century of the U.S., the 21st century is going to be the century of China.
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The best advice I can give you - the best advice of any kind - is to teach your children and your grandchildren Chinese. It's going to be the most important language in their lifetime.

Toward the end of the video, the discussion turned to investing in commodities:

Most people need a secular bull market to make a lot of money - a market that is essentially rising all the time, just as stocks were in the 80s and 90s. Well, we have a market like that now in raw materials, natural resources, commodities - call them what you will.

When I try to tell people about commodities, most people get confused, most people don't have a clue, most people cannot spell 'commodities' yet. Most people think you get your coffee at Starbucks - they don't know you can buy and sell this stuff and make a lot of money.

But I would remind you that thirty years ago, most people in the world, in fact most people in Europe, couldn't spell 'mutual fund'. Most people didn't have a clue what a mutual fund was thirty years ago. There weren't any in the world, believe it or not. If you had gone to Madrid or Paris or Rome as recently as 1980 and said to them, "How do you get to the stock exchange", people would have looked at you and said, "What is the stock exchange?"

They didn't know what a stock exchange was - I was here, I know.

They didn't have a clue what a stock exchange even was thirty years ago. Then we had a big bull market - we had television, we had everything, and everybody learned about a bull market in stocks and mutual funds.

Well, that's what commodities are now. Most people in the world know nothing about them, most people in the world have never invested in them.

In the world right now there are over 70,000 mutual funds for the public to invest in stocks and bonds. There are fewer than 50 for the public to invest in commodities. This is an unknown, untouched, uninvested asset class, which is one reason why it's going to go up so, so much more.

Obviously, Rogers remains bullish on commodities noting that the current bull market is likely to last for another 7 to 15 years.

To learn more about investing in natural resources using commonly traded ETFs, stocks, and mutual funds, see this description at Iacono Research. Or, sign up for a free trial.