"...but it will always be Burma to me" -- Building An Investment Bomb Shelter (ETFs: GLD, IAU, FXE)

Includes: FXE, GLD, IAU
by: Roger Nusbaum

Roger Nusbaum submits: That is of course a quote from the J. Peterman character on Seinfeld (BTW, I do a pretty good Peterman impression). It will be relevant in a moment.

On the Monday morning Asian Squawk Box they had Jim Rogers on for 90 minutes, of which I would guess 50 minutes was him answering viewer emails and CNBC reporters' questions.

This was about as in-depth as I have seen. The only negative was that there was a lot of repetition in the questions and while none of his themes were new there was some useful tidbits that were new in the context of some of his recent themes.

I had never heard him talk about uranium before. Also I did not know that 40% of the world's known uranium deposits are in Australia. He thinks that China will be a big buyer of uranium and, without naming names, he said those are probably good stocks to own. I will see if I can find any Australian uranium companies. I have written about a couple of the uranium stocks that trade in the US previously on this site.

He continues to pound the table on just about every type of commodity there is, favoring soft commodities over hard. I learned there is a wool futures market somewhere in Australia, which amused me.

He really thinks that people are far better off owning gold as opposed to shares in a mining company. Lately the miners have wildly outperformed the metal which has me thinking of swapping stock for the GLD ETF for the clients that own stock.

He also went on about his belief that the US is in trouble economically and that these troubles will manifest themselves fairly soon.

Show host Martin Soong asked what areas he thinks will be future investment destinations. Jim mentioned Viet Nam (which I have written about several times and apparently may have oil in the ground), Angola, Myanmar (hence the title of this piece) and East Timor. He made a comment about moving to East Timor so my wife and I are going there next month to look at some caves that are in move-in condition.

It would be easy to watch something like this and come away feeling very glum about what will happen to our country. I buy into the idea that the US (based on historical precedent) will not be the top economic banana by the time this century ends. I don't know if another country transitioning to world economic super power will happen in our lifetime or not but I think we could see some evidence of this over the next ten years, some would say it has already started. While I think this could happen I don't view it to the extreme that Jim and some others see it.

This blog has urged about all portfolios having a counter strategy. One of thing things I have included in this concept has been gold and other stocks or ETFs that generally benefit from a bull market in commodities. Timber is another asset class I've written about as well.

I think this entire bomb shelter concept is becoming more and more important, as I often write. This means foreign stocks, commodities (the new Deutsche Bank ETF could be the right way to go), currencies and probably other things that are not yet on most people's radar.

For now a little exposure and a growing awareness of these types of products are probably all that are needed. If any of this holds any water it will take quite a while to unfold.

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