Commodities king and formerly George Soros’ partner and co-founder of the Quantum Fund, Jim Rogers, said gold, silver and other commodities prices will trade up no matter what move the Fed makes at its next FOMC policy meeting scheduled on November 2-3.

On Thursday, speaking from Singapore to Bloomberg Television’s Andrea Catherwood, Rogers said:

“If the world economy gets better, the prices of commodities will go up because there are shortages developing. We already see shortages developing.  You mentioned rare earths, but there are others.  If the world economy doesn’t get better, I still want to own commodities because they’re [Federal Reserve] going to print money.”

In the short term, however, Rogers said he doesn’t like buying any commodity “when prices are making new highs,” referring to gold, which has rallied nearly straight up in price from its recent low of 1,155.90 on July 28 to its intraday record high of $1,387.10 set on October 14.  But Rogers likes silver and rice now, because both these commodities haven’t made new highs yet.

Since the last FOMC meeting of September 21, speculation that Fed Chairman Ben Bernanke will formally announce further “quantitative easing,” or QE2, in an effort to stimulate a noticeably weak U.S. economy has sparked a fire under all commodities across the board.

Released on October 12, minutes of the September 21 meeting contain language that troubles Rogers. Most disturbing relates to a change from a multi-decade stance of the Fed on its inflation targets, which were repeatedly held at somewhere between 1% or 2%.

The Fed will now focus “primarily on further purchases of longer-term Treasury securities and on possible steps to affect inflation expectations,” according to the September 21 FOMC meeting minutes. In other words, the Fed would like market participants to expect inflation in hopes of affecting consumer behavior toward spending now before prices rise in the future.

According to the minutes, the Fed appears to be breaking for its long-standing dual mandate of maximum employment and price stability.  The Fed now is willing to intentionally cause consumer price inflation, specifically by “targeting a path for the price level rather than the rate of inflation, and targeting a path for the level of nominal GDP.”

All of this inflation talk disturbs Rogers, who for years insisted the only function of the Federal Reserve is to “print money.”  And printing money has done nothing but create asset-price bubbles, with pops in real estate and stocks now paving the way for new rallies in the commodities sector, which someday will end in a bubble, too.

But for now, Rogers sees the emergence of Asia as the 800-pound gorilla affecting commodities prices in the long term, and will lift prices irrespective of Fed policy actions. If the Fed comes through with its promise to debase the U.S. dollar through another round of quantitative easing, commodities go higher more quickly in dollar terms, Rogers insists.  If the Fed allows the U.S. economy to contract (it will anyway in real terms), Asia will still be buying commodities for decades to come, he said.

It is heads you win, tails you win for commodities.

• Need fast service and cheap rates from a broker? Click here to see my favorite place to trade GLD
• Want more? Check out the message board buzz for gold stocks
• See what newsletters are recommending gold stock picks
• Get breaking news alerts on this stock:  http://thestockmarketwatch.com/

About BeaconEquity.com

BeaconEquity.com is committed to producing the highest-quality insight and analysis of small-cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock market today, which have traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

Beacon Equity Group Disclaimer

This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Beaconequity.com is a wholly-owned subsidiary of BlueWave Advisors.

While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.