“We’re going to see $200 oil at some point” Jim Rogers

Rogers buys oil last week as price drops Thu Dec 11, 2008 12:49pm EST

By Herbert Lash

http://www.reuters.com/articlePrint?articleId=USTRE4BA4HD20081211

NEW YORK (Reuters) - Renowned commodities investor Jim Rogers said on Thursday that he bought oil last week as crude prices collapsed to near four-year lows and that the world is running out of known oil reserves.

Rogers told the Reuters Investment Outlook Summit in New York that he also closed his bets against the U.S. stock market in October, and plans to use the dollar’s rally as an opportunity to exit dollar-denominated assets.

Rogers, who spoke via a conference call from Miami, said he is the world’s worst market timer and a horrible short-term trader, but a sharp sell-off in oil prices suggested a bottom.

“Oil collapsed last week. Whenever you’ve had that sort of selling climax throughout any period

M3 Money Supply Chart

M3 Money supply represents the amount of money added to the money supply. The Federal Reserve stopped reporting this (gee I wonder why) but it is still tracked by private firms.

I have watched this closely over the last few months, as I wanted to see if we were going to see a contraction, or expansion of the money supply.

As you can see, money supply has expanded substantially, going from roughly 13.5 Trillion $USD in August to approximately $14.5 Trillion in November. Annual rate of change (increase) is approximately 17%.

Any expansion of the money supply is bullish for gold.

Baltic Dry Index Chart

The Baltic Dry Index shows us how much surface tonnage is being shipped, which also gives us a feel for how much international trade is being conducted.

As you can see, it has basically fallen off