Jim Rogers, Martin Armstrong Predict Strengthening U.S. Dollar To Push Gold Price Down Before Take-Off

Still on the topic of gold tonight, I want to talk about two well-known individuals in the investing community- Jim Rogers and Martin Armstrong- and their thoughts about the yellow metal.

In what might be somewhat of a disappointment to the “goldbugs,” neither is predicting the price of gold will take off from here.

Let’s go back to that Midas Letter interview of Rogers that I blogged about the other day. Rogers, who predicted the commodities rally that began in 1999, was asked if he thought the bottom for gold had been reached, or was he still looking for the price to come down further to around $900. The former partner of George Soros in the legendary Quantum Fund replied:

Look guys… I want to remind you that I’m the single worst market timer in the world. I’m the single worst short term trader in the world. So asking me is a waste of all of our time. I don’t think we’ve hit the bottom. I’m still looking for a bottom under 1,000. Who knows if it will get there, but if it does, I hope I’m smart enough to buy a lot of gold. In the end, gold’s going to turn into a bubble, and it’s going to go much, much higher. I just don’t know when. But I’m not buying gold yet

(Editor’s note: Bold added for emphasis)

Okay- so long-time Survival And Prosperity readers have heard Rogers say that before. On a number of occasions. But it’s what he said next in the interview I found very interesting. Rogers predicted:

What I do expect to happen, is that as the turmoil spreads, I expect more people will flee toward the U.S. dollar – I own a lot of U.S. dollars – but because of that, people think it’s a safe haven. It is not a safe haven, as you well know, but people think it is. So the dollar will go higher, it will get overpriced, it may turn into a bubble. Gold will go down in a time like that, because often – not always, but often – gold goes down when the dollar goes up. So I will sell my dollars at that point, and put it into something else – perhaps gold. If that scenario works – the dollar gets overpriced, gold gets beaten down because of the panic, then I hope I’m smart enough to buy gold or renminbi or whatever it happens to be at that point

(Editor’s note: Bold added for emphasis)

I’ve heard this scenario before, one where the price of gold falls more due to a strengthening U.S. dollar stemming from a global flight to “perceived” safety. Do any readers follow Martin Armstrong, economist at Armstrong Economics (and former chairman of Princeton Economics International Ltd.) and the creator of the Economic Confidence Model? While the jury’s still out on him (for me), I do read his blog almost daily. And if my memory serves me correctly, what Jim Rogers just said sounds a lot like what Armstrong has also been saying in recent times. Back on November 20 he blogged:

Gold is being overpowered by the rise in the dollar…

(Editor’s note: Bold added for emphasis)

He added just two weeks ago:

I have stated this many times, so here it goes again: Gold rises when people lose confidence in government. It has nothing to do with inflation. So, you start to worry about government survival or who’s going to win a war when gold rises — not before.

Short term, we still have the risk of gold going under $1,000 per ounce. It’s going to flip when everything is right — not before. It will probably max out at $5,000 per ounce or perhaps $6,000 at best. That we will not know until we have the low and the projection angle from that low…

Gold will respond ONLY when the majority sees the crisis unfolding. Just because you may understand it and see the logical outcome does not mean that the bulk of the population will…

(Editor’s note: Bold added for emphasis)

Very interesting. Which brings up the question:

Have Americans lost confidence in government?

More tomorrow…

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; a qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Sources:

Armstrong, Martin. “Gold, Geopolitics, & the Dollar.” Armstrong Economics Blog. 20 Nov. 2015. (http://www.armstrongeconomics.com/archives/39465). 27 Jan. 2016.

Armstrong, Martin. “Gold- No Time Left For Conspiracy Theory.” Armstrong Economics Blog. 14 Jan. 2016. (http://www.armstrongeconomics.com/archives/40680). 27 Jan. 2016.

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2 Comments to Jim Rogers, Martin Armstrong Predict Strengthening U.S. Dollar To Push Gold Price Down Before Take-Off

  1. Dont you think Trump leading in polls tells us that ppl have lost confidence in the politicians

  2. stephen wright on January 31st, 2016
  3. Thanks for the comment Stephen. “Don’t you think Trump leading in polls tells us that ppl have lost confidence in the politicians.” Not necessarily. Huh? If one’s referring to “politicians” in a broad sense, such as “Congress,” then poll/survey results suggest that confidence is definitely low. But I seem to recall past polls/surveys often indicating significant constituent satisfaction concerning their own elected representative. In other words, “The politicians in D.C. may suck, but our man/woman in Washington is doing an okay/good job.” Obviously, this isn’t always the case. And I don’t know if more recent polls/surveys still reflect such thinking.

  4. Editor on February 1st, 2016
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