RTOB: Rogers on Taiwan + BUBBLES

In a recent television interview, Jim Rogers shared the following insights on Taiwan and whether or not we're in a Commodity BUBBLE.

*Jim Rogers' bullish investing thesis on Taiwan:

"I've (just recently) invested in Taiwan for the first time in my life. I think for the first time in 60 years there is going to be peace between Taiwan and China..so that is going to have enormous impact on the Taiwan economy...(sectors) tourism, travel, airlines...if there is going to be peace then oh my goodness all of those Chinese are going to be coming to Taiwan."

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*Jim Rogers' take on whether or not we're currently in a Commodity BUBBLE:

"How can you have a bubble when nobody has bought any commodities? Virtually nobody watching your show (The Wall Street Journal Report) has ever bought a commodity. SOMEDAY there will be a bubble when everybody is buying commodities. When there are hundreds and thousands of mutual funds for investing in commodities THEN we'll be in a bubble, we're nowhere near that."

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Random
Thought
Of
Brilliance

In my humble opinion, Jim Rogers seems to be making a solid point here on BUBBLES that should not be overlooked as:

The Tech stock Bubble burst only After EVERYONE AND THEIR FATHER (individual investors + institutions) bought or were still caught up in the FRENZY of buying technology stocks...swayed by staggering returns, investors bid up tech stocks and believed their 5-stock portfolios were diversified holding 5 different information technology companies (JDSU, EMC, Lucent, Dell and Cisco for example...don't forget to throw in a couple of cool 'Dot Coms' in there either). Ditto with the U.S. housing bubble.

The Housing Bubble popped only After EVERYONE AND THEIR MOTHER bought homes..often with loans they could not even afford BECAUSE of:
1.) the U.S. Federal Reserve's careless ENABLING:
the Fed's setting of very low rates (in the wake of the Tech stock bubble and 9/11) + the stubborn maintenance of those very low rates for way too long...plus lets not forget the COMPLETE LACK of oversight demonstrated by the Fed who were nowhere to be found when it came to protecting the homebuyer and investors from the financial industry's reckless lending tactics + MASSIVE creation of inherently faulty mortgage derivatives

AND

2.) the PREDATORY Lending practices of greedy, corrupt banks:
accepting very little money down on way too many high-risk loan types including subprime, ARM's, Interest-only, etc. because these MORONIC Lenders were in such a rush to close the deal + 'earn' HUGE profits via sales commissions AND the rabid packaging of these same loans into securities like mortgage-backed assets...lenders were in such a rush that they often failed to even verify the earning + living backgrounds of 'Lendees'/homebuyers...thus everyone and their mother being able to buy homes!

*Net of the net and using recent market history as a GUIDE, while commodities may be zooming, it seems premature to call it a bubble because we have yet to see the same amount of RECKLESS + FRENZIED BUYING by investors (including institutions like mutual funds, hedge funds, etc.) as we saw with Tech stocks + Homes in the late 90's-early 2000's. FYI and probably sometimes overlooked, institutions were pretty large players in the whole sub-prime induced Housing DEBACLE (not just homebuyers + 'speculators')...Who do you think was on the other side of the excessive mortgage-backed asset sales made by greedy banks??? Prior to this security class blowing up last year, institutions (hedge funds, mutual funds, pension funds, BANKS, etc.) were collecting what they believed to be easy yields of 8-12% on these products.