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Jim Rogers: When To Buy Gold
By Drew Voros | 24 April, 2012

HAI: Do you follow China’s gold production much in terms of what they actually do with their gold?

Rogers: No, that’s hard to do since China doesn’t publish too much about it. But I know that China has got a campaign encouraging the Chinese citizens to own gold. I know shops have sprung up everywhere. And the good banks are now offering gold everywhere. So there’s been a huge change in China in the past five years. And whatever they’re producing, I presume most of it they’re selling to themselves. They know that gold consumption has gone up a lot in China. They claim that they’re the largest producer of gold in the world now. I have no reason to doubt that claim. Lots of dramatic changes have taken place in China versus gold in the last few years.

HAI: But they also import a lot of gold too, don’t they?

Rogers: Well, I guess, I don’t know. If you have the numbers, you’re ahead of most of us, because China doesn’t report its imported numbers and export numbers for gold. But if you have them, then you have a scoop.

HAI: Sticking with China, I was talking to somebody who’s a big believer that platinum and palladium are really going to be supported by the Chinese auto production industry. Do you see China’s auto production growing that much over the next five years, say, to 100 million units?

Rogers: China will certainly be the largest producer and consumer of automobiles in the next several years. I don’t know how much they will produce or consume. You have 1.3 billion Chinese, I would remind you. So let’s see, a 100 million would be 8 percent of the population. That would be pretty high compared to the U.S., for instance. I think in the U.S. we produce 13 million or 14 million in a good year. And we have 300 million people. So with that kind of ratio, yours is pretty high. On the other hand, China has virtually no cars and only started producing and buying cars 15 years or so ago. So yes, it could happen; I have no idea. It’s not going to collapse, that’s for sure.

HAI: In the same vein, many believe there is a real estate bubble in China, but you don’t believe that, do you?

Rogers: It was a bubble in urban coastal real estate. But China, for the past three years, has been trying to pop that bubble. And the bubble has popped. You could certainly go down further, but I wouldn’t say there’s a bubble there now. Prices are coming down, transactions are coming down and people are losing money. I don’t know how long China will stay tough. I would hope they’d stay tough much longer, because they’ve got to kill inflation too.

But if anybody thinks there’s a bubble in China, they haven’t been doing their homework. The bubble popped. Prices have come down and are continuing to come down.

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