An Interview with Commodities King Jimmy Rogers

What follows below is the transcript of my CNBC interview with the ever irrepressible investing legend Jimmy Rogers on last night's show. As you'll soon see, Jimmy pulled no punches during our Washington to Wall Street discussion.

LARRY KUDLOW: All right, we welcome back my old friend and the world’s commodity king—investing legend Jimmy Rogers, chairman of Rogers Holdings. Hello Jimmy. Are you solvent?

JIM ROGERS: Larry, I am still solvent. What about you? You’re the one I’m worried about.

KUDLOW: I know, and you ought to be worried after the drubbing we’ve taken here in the states. Now Jimmy, where are you putting your money right now? This has been an awful period. What are you doing? Where do you invest?

ROGERS: Mainly I’m watching right now. But the only thing I know where the fundamentals are getting better are commodities. I mean, farmers cannot get loans for fertilizers. Nobody can get a loan to open a new mine. So you’re going to see the supply of commodities continue to decline, no matter what happens to the world economy. And I cannot say that the fundamentals of General Motors are getting better. I cannot say that the fundamentals of Citibank are getting better. But they are getting better for commodities.

KUDLOW: All right, you’re still loyal to the commodity play. And they look like they’re stabilizing and bottoming in general. You like the farmland—by the way, where are you buying the farmland?

ROGERS: Well mainly—I’m a director of a firm, which is buying farmland in Canada and in Brazil at the moment. Both of those are great agricultural countries, where you don’t have to worry about your capital being expropriated, or so we hope.

KUDLOW: Jimmy, what’s the story with the American banking system and Washington’s alleged “fix” for it? How difficult? How awful?

ROGERS: Larry, those guys in Washington just do not get it. They are destroying the economy. They are destroying the currency, right before our eyes. It is mind-boggling to me what’s happening. They hired this guy, Geithner, who’s been wrong for fifteen years. Larry, if I were on your show for five weeks and I was wrong every week, you would not have me back. This guy has been wrong fifteen years in a row. And Bernanke? He’s been wrong 350 weeks in a row. These guys don’t get it.

KUDLOW: But Jimmy, I’d always have you back, regardless. But I do want to ask you, the dollar’s been really strong. I’m back to calling it King Dollar. It’s up about 25 percent for the past, almost, year. I think year to date it’s up 10 percent. This is one of the more interesting developments. What do you make of it?

ROGERS: Well no, Larry. As I explained last time I was on CNBC there last year, there is an artificial rally in the dollar, because everybody’s been short the dollar. Now they’re being forced to cover. There’s forced liquidation going on. My plan Larry is sometime this year, or next, I don’t know when, to get out of the US dollar. Because it’s a terribly flawed currency, and this is just an artificial, forced rally.

KUDLOW: But if you have a stable currency here, a normalized, upward-sloping Treasury yield curve which is great to predict future recovery, and a continued energy tax cut, let’s say energy prices stabilize at about 40 dollars a barrel or thereabouts, I mean, isn’t that really positive for the American stock market?

ROGERS: A stable currency Larry? I mean the US government has increased its debt by at least 300 percent, and maybe 600-700 percent in the last year. How can you call that a stable currency? A country which is printing money, and borrowing money such huge amounts of money? I don’t understand your logic.

KUDLOW: Well I don’t know if it’s logic, I’m just factually stating it. But I want to ask you another thing. Earlier on our program we were talking about China. China has a zero capital gains tax. They treat capital in a very friendly manner. These are the communists Jimmy! Can we say the same thing here in the USA? It doesn’t look like it from what’s coming out of Washington.

ROGERS: Mr. Obama is going to increase taxes on capital. Can you believe that? In a period when we have the worst capital shortages in decades, these geniuses in Washington are going to increase [laughing] the taxes on capital. I’m not making this up. And they’re going to increase taxes on energy. Larry, the only market that I own still, that I bought, at least I bought in the last few months has been China.

KUDLOW: All right, Jimmy Rogers. You’re terrific my friend. It’s great to hear from you. The Kudlow Report, we will be right back.