In a recent interview, famous investor and analyst Jim Rogers said that he expects interest rates to keep growing in the midterm. He reminded the audience that during the 2008 financial crisis, many countries would print, borrow, and spend unprecedented amounts of money. This kep the economy going strong for years, and it is still benefiting from all that expenditure.
With all the recent bank collapses it seems unlikely that governments will raise the rates too much in the short term. But if inflation starts growing again, central banks will have to return to rate hikes – and that will cause a collapse in the market, according to Rogers. A recession is also possible – though not inevitable at this point.
Commodities remain cheap under these conditions: silver is still trading 60% below the ATH, and sugar, 50% below the historical maximum. Commodities usually perform well during times of high inflation. Moreover, real assets are a good way to protect oneself against the high inflation and chaos that are ahead of us.
Jim Rogers singled out the commodity markets of China and Japan as particularly promising. Both markets are far below their relative ATH market caps and don’t show the signs of a bubble.
What about mining stocks, though? The expert suggests that you invest in them only if you have a good understanding of the mining industry.
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