Jim Rogers: Syria War And “Market Panic” To Send Gold “Much, Much Higher”

RogersAstute investor, Jim Rogers has warned overnight in an interview with Tara Joseph of Reuters that “oil and gold will go much, much higher” due to “market panic” regarding Syria and the coming end of free moneyWhen this artificial sea of liquidity ends we’re gonna see panic in a lot of markets, including in the US, including in West developed markets.  Have we seen panic, have we seen terror? Absolutely not. Not in any markets yet.  We haven’t seen much of anything yet.

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From Goldcore:

Today’s AM fix was USD 1,425.50, EUR 1,066.03 and GBP 919.91 per ounce.
Yesterday’s AM fix was USD 1,411.00, EUR 1,057.80 and GBP 909.38 per ounce.

Gold rose $13.10 or 0.95% yesterday, closing at $1,415.50/oz. Silver rose another $0.16 or 0.66%, closing at $24.46. Platinum fell $20.25/oz to $1,521.75 and palladium edged down 0.1% to $743.22/oz.

Gold and silver are higher in all currencies today. The rupee sharp falls continue and it fell the most in 20 years overnight and gold reached new record highs in the rupee.

Safe haven demand has returned due to concerns that military action against Syria could lead to a war in the already very unstable Middle East which could result in much higher oil prices and impact the already fragile global economy.


Gold in USD – 5 Years (Bloomberg)

Geopolitical risk, which has been vastly underestimated for months, has returned with a vengeance. Markets have seen increased volatility and risk aversion as the US, the UK and France press ahead with plans for a 48 hour cruise missile attack on selected targets in Syria this week.

Gold and silver have risen 4% and 7.5% in the 5 trading days since the drums of war began.

Oil prices rose sharply yesterday with NYMEX crude rising 2.9% and Brent crude rising 3.3%. This was the sharpest daily rise this year and led to a six-month high of $114.35 a barrel. NYMEX crude has risen 6% since last Thursday.

Share prices tumbled globally in volatile trading on Tuesday as momentum built for military action. Stocks in Asia also saw some losses. Falls in Europe have continued again this morning.

The FTSE All-world share index dropped 1.4% to close at its lowest since early July. The S&P 500 was down 1.42% and the Nasdaq by 2%.

It is noteworthy that one of the largest moves in stock, bond, commodity and all markets today is the sharp fall in British gilts which has seen 10 year yields rise sharply from 2.59% to 2.8%, the higest level since August 2011.

Western officials said sea launched cruise missiles would be used to attack Syria. Syria vowed yesterday to use “all means available” to counter a U.S. led assault on the country.

Russia and China have repeatedly used their Security Council vetoes to block UN action against Syria.


NYMEX Crude Oil – (Bloomberg)

Yesterday, they warned strongly against a U.S. led strike on Syria in response to the alleged use of chemical weapons, arguing it would be dangerous, irresponsible and could have “catastrophic consequences”.

Mohammad-Javad Zarif, the Iranian foreign minister, urged western countries to avoid “hasty decision making” about Syria, warning military action could worsen the situation.

The greatest risk is that an already threatened and embattled Iran decides to attempt to aid one its few allies Syria by closing the Strait of Hormuz.

Much of the oil that the Western world consumes still comes from the Middle East and most of it is still shipped through the very narrow Strait of Hormuz. More than 20% of the world’s petroleum, and about 35% of the petroleum traded by sea, passes through the strait making it a highly important strategic location for international trade.

The shipping lane is only two miles wide in each direction with a two mile buffer zone in between and is therefore a potential choking point. The narrowness of the lane makes it easy for Iran to block it. Iran is on the recorded stating that if attacked, it will block the strategic shipping lane.


Cross Currency Table 1230 GMT – (Bloomberg)

Astute investor, Jim Rogers has warned overnight in an interview with Tara Joseph of Reuters that oil and gold will go much, much higher” due to “market panic” regarding Syria and the coming “end of free money”:

Jim Rogers: Well, Tara, I own oil, I own gold, I own things like that and if there is going to be a war, and it sounds like America is desperate to have a war, they’re gonna go much, much higher. Stocks are gonna go down, some of the markets that I’m sure are already going down, commodities are gonna go up. I mean, yeah, some of the things I own all make a lot of money. It’s, I’m not particularly keen on war, I assure you, but it sounds like they want it.

Tara Joseph: Is your main concern about supply chain disruptions for oil? Is that where we’ll see the biggest moves?

Jim Rogers: Well, that’s where we’ll see huge moves but the problem with war, Tara, is — and I’m not the first to know this – no matter how well the plans are made, strange things happen in war and who knows what unintended consequences will come. But I do know that throughout history whenever you had war, things like food prices have gone up a lot, energy prices have gone up a lot, copper price, lead prices: you know, all of these things go up a lot whenever there’s been a war in the past.

TJ: Meanwhile, moving farther to the Far East, we’re seeing of a mini crisis around Asia. The Fed stimulus unwinding really affecting confidence in India and Indonesia in particular. Do you think this is a short-term blip or do you think these countries face very rough waters ahead?

Jim Rogers: Of course they face rough waters ahead, Tara. You know, India and Indonesia – Turkey too, which is part of Asia – all of them have huge balance of trade deficits, which they’ve been able to finance with all this artificial free money that’s been floating around. Now, the artificial sea of liquidity is going to end some day and when it ends, all the people depending on this free money and this sea of liquidity are gonna suffer. Whether its this week or this year or next year, they’re all going to suffer.

TJ: We’re already, though, Jim seeing sort of the unwinding of what happens when there’s fears of that stimulus coming out. What’s next for these countries? Where does it go from here?

Watch the interview in full here. If the video does not display correctly, please click on this link.

Jim Rogers: Tara, we, we haven’t seen much of anything yet. I mean, normally, in bear markets things go down 40% to 80% and people give up. They throw the shares out the window and they say, “I never want to invest again as long as I live.” Sure, we’ve seen some declines. Have we seen panic, have we seen terror? Absolutely not. Not in any markets yet.

TJ: Are you expecting panic? We’ve seen mini crises do you see more panic?

Jim Rogers: Yes, of course. When, when, when this artificial sea of liquidity ends we’re gonna see panic in a lot of markets, including in the US, including in West developed markets.

I mean, Tara, this is the first time in recorded history that all major central banks have been flooding the market with artificial money printing at the same time. They’ve all been trying to debase their currencies at the same time.

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This has never happened in recorded history. When this ends its gonna be a huge mess.

The interview can be watched here.

NEWS

GLOBAL MARKETS – Stocks Tumble On Syria Uncertainty; Gold Up – Reuters

Gold Demand Rises On Fears Of Syria Attack – Irish Independent

Gold Climbs to Highest Since May as Syria Tensions Spur Demand – Bloomberg

Gold Keeps Momentum After Run Into Bull Market - MarketWatch

COMMENTARY

Comments

  1. I have two concerns here.
    One is the weakness shown by KLUMMAC right now as he sees his signature program, Obamacare, turns into a complete fiasco.
    This psychopath cannot accept that 100 years of this Progressive’s wet dream is imploding on his watch. 
    His entire 8 years in office will be a complete failure if Obamacare fails, as it should. 
    When an administration is in failure mode it goes to the mattresses and starts a war. KLUMMAC will use the death and destruction of this war, politicizing and twisting in ways to support his plans that would make a pretzel factory look simple. Watch how he will start down the road of more gun control and health care as the battles unfold. I hope I am wrong but history has long precendents to support this contention.
    See Bush I, Clinton, Bush II as to how this is done. The prez has some good advisors for that purpose, includig these former presidents.
      If nothing else,  it shows the sheeple idiots (like I used to be) that the president is a strong leader because he can kick sand in the face of the 98 pound weakling on the beach.  This time he’s going to kick sand in the face of the 275 pound strong man.  That will end very badly but KLUMMAC is what he is;  A slick talking grifter from the South Side, a bully, being egged on by a pack of loons, neo-cons, Marxists and war mongers who know they can get this jackass to push the red button.  The profit to this pack of jackals can be measured in FIAT, power or a high body count.
    The other matter is the petrodollar hegemony and the attacks  against it from Syrian, Iran, Russia and China (With Saudis in the background playing both ends against the middle)  The complexities of this are vast but I think it boils down to one simple equation. 
    This  American empire is going down a very bad path and the world sees it for what it is.  We no longer have reliable allies, only interests. And those interests are not seeing that their interests in us are well served.  Many former allies are making other plans.  The G20  meeting will be very telling.  If the upcoming war gets really serious the G20 (19) may be convened for a different purpose. 
     

    • I agree with your message. I also believe that many of these so called retired senators are taking their families out of the country. The writing is on the wall. 
      In a nutshell 


    • He was harping on gun control again today via executive order. Anything to distract from the real issues of the day like a nuclear war with Russia and China. Think we would be better off if they managed to sneak a nuke into DC and evaporate it.

    • “One is the weakness shown by KLUMMAC right now as he sees his signature program, Obamacare, turns into a complete fiasco.”
       
      Both of those are viable concerns, not just for Americans, but for everyone on this planet.  The Soviets were terrified of Jimmy Carter.  Unlike Reagan, who came into office after Carter, the Russians never knew what to expect from Carter.  He was weak, indecisive, AND unpredictable, so if the crap hit the fan, there would be no way to know what might be the cause.  Sounding familiar yet?  The current president is VERY much in the same vein as was Carter.  We have the same kind of fake economy with malaise for all, only now it has become bigger and much worse.  It is so bad, in fact, that neither the Gov nor the Fed dare tell the truth of our situation, fearing a revolutionary armed insurrection backlash.  The DHS did not buy 2 billion rounds of ammo to get the big buyer discount.  They bought it to protect the Gov from the righteous wrath of the American people when they get tired of being crapped on all the time and then lied to about it.
       
      “This psychopath cannot accept that 100 years of this Progressive’s wet dream is imploding on his watch. 
      His entire 8 years in office will be a complete failure if Obamacare fails, as it should.”
       
      Indeed it is, as it should.  This is a terrible law, badly conceived, and horribly executed.  It will be a complete disaster and it will cause a great deal of damage to the US medical industry, the country, and its people.  The price for all this is going to be FAR higher than most now imagine.  The best advice one can get right now is… do not become sick or injured until this catastrophic nightmare collapses and is replaced by a REAL system that is simple, uses competition to lower prices, and doesn’t promise the moon to those who want a free ride.
       
      “When an administration is in failure mode it goes to the mattresses and starts a war.”
       
      One can only imagine the look on Obama’s face if someone were to say to his war appeal, “OK, sounds great.  Here is your rifle, helmet, and flack jacket.  We’re willing to follow you anywhere, Mr. Commander in Chief”.  Oops!  That plopping sound is presidential poo hitting the deck.  Then he manages to say, “Umm, well, OK, then, uh, maybe we better, uh, rethink this”.  Idiot.
       
      “The G20  meeting will be very telling.  If the upcoming war gets really serious the G20 (19) may be convened for a different purpose.”
       
      It might be or it might be cancelled until the dust settles.  It will be interesting to hear how Obama will try to sell the idea of renting some temporary peace in Syria in exchange for the permanent loss of the lives of our sons and daughters plus the treasure from our pockets.  Oohhhh, such a deal!  As in NOT!  There isn’t a thing in Syria that is of any concern whatsoever to the American people.  Yes, they are having a civil war there and it is a tragedy.  One group of murderous thugs is killing another group of the same.  SO?  If they would all just kill each other off, Syria, the ME region, and the entire world would be FAR better off.  How will US and EU involvement change any of this other than to make it hideously expensive in terms of lives and treasure lost?  In fact, it won’t help a bit.  Even the suggestion that it will is nothing but pure BS / propaganda.
       

  2. PS  This idjit is nothing if not a political animal. How this strike and potential for precipitating a much wider war augers for the 2014 election cycle is unknown but it if does nothing else it will rouse the right wing base to take the fight to the White House and state houses along with Congressional and Senatorial races.   I think it will go badly for the Dems but who knows how this will play out.  I think all of them should be strung up but that just my way of dealing with these crazy people.



  3.  
    Remind you that China is selling is treasury holdings 

  4. I can’t see Obozo changing horses in he middle of a stream.  Obozo has been consistently inconsistent throughout his ruling of his kingdom.  He doesn’t want his fingerprints on anything

  5. I can’t see Obozo changing horses in he middle of a stream.  Obozo has been consistently inconsistent throughout his ruling of his kingdom.  He doesn’t want his fingerprints on anything

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