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Agriculture A Good Buy When Volcanoes Erupt

LONDON/REUTERS

Agricultural commodities were left in the dust as base metal prices boomed last year, but now represent the better investment, commodities bull Jim Rogers told Reuters April 29.

“I’d rather buy agriculture, which didn’t move up, and I don’t want to buy base metals because they did go up,” he told Reuters in a telephone interview.

Prices for base metals soared in 2009 as global economies started to revive, with copper on the London Metal Exchange surging nearly 140 per cent.

In contrast, many agricultural commodities struggled with CBOT wheat down more than 10 per cent following a bumper global harvest and corn climbing less than two per cent during 2009.

Rogers, based in Singapore, rose to fame after co-founding the now-closed Quantum Fund with George Soros nearly four decades ago. The fund returned 4,200 per cent over the 1970s and famously bet against the pound in the 1990s.

Rogers also pointed to the potent ial for agr icul tural commodities to outperform in the event of a major volcanic eruption in Iceland.

“All stocks and commodities would go down, except agriculture, which will probably go through the roof.”

Rogers said another major concern for financial markets was the potential for one or more countries to go bankrupt.

“However, if something like that happens, governments are going to print more money,” he said.

“Throughout history, when people debase currencies, real assets have been a good place to be.”

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