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- Gold and silver are better bets than stocks, bonds, or real estate right now, Jim Rogers says.
- George Soros' former business partner said commodities tend to do well during inflationary periods.
- Rogers expects inflation to worsen again, and sees a recession as almost inevitable.
Jim Rogers expects gold and silver to outshine other assets during a period of historic inflation and widespread worry about a recession.
"If you're in a world where prices are going higher, you want to own the things that are going higher in price," the veteran investor told "The Julia La Roche Show" in a recent interview.
Rogers is best known as George Soros' former business partner, and the cofounder of Quantum Fund and Soros Fund Management. He explained that fast-rising prices make fixed-income assets like bonds less attractive, and the higher interest rates that typically accompany them often weigh on the stock market and real-estate sector.
However, commodities like gold, silver, and rice tend to appreciate during inflationary times, meaning they're "usually a good place to ride it out and even perhaps make a lot of money," Rogers said. He singled out gold as a historical beneficiary of surging prices and raging wars, but hailed silver as the better bet today as its price is much more depressed.
Rogers also said he expects other currencies to threaten the US dollar's role as the world's reserve currency, but he hasn't found the likely winner from de-dollarization as yet. He noted that Washington's use of sanctions against Russia over its invasion of Ukraine has stoked concerns in several nations that the dollar isn't a neutral haven, and could become a liability if a country angers America.
The author of "Adventure Capitalist: The Ultimate Road Trip" also rang the inflation alarm. Price growth has slowed from a 40-year high of over 9% last summer to below 4% in recent months, but it has remained well above the Federal Reserve's target of 2% a year.
"We have staggering amounts of money printing in the last year or two all over the world, and we're going to have worse inflation, it's not over yet," he said. "We're all going to pay the price."
Rogers said that governments would print money aggressively once their economies show signs of slowing, refueling inflation.
He doesn't expect an imminent recession given the amount of government spending in recent years, and the likelihood that politicians will shore up the economy ahead of a presidential election this year. But a major downturn seems virtually assured at this point, he said.
"I can see it coming," he said about a recession. "We're getting closer, it doesn't have to happen but it always has, and this is the longest period without a recession in American history."