Investors are better off ignoring what governments are saying and instead buy
assets that thrive when politicians fail, which are hard assets like commodities,
says international investor Jim Rogers.
European politicians have spent months trying to firewall the debt crisis, claiming progress only to reveal setbacks that have punished stocks and currencies.
The U.S. appears to be improving, but problems in Europe will send the U.S.
economy and its markets collapsing, Rogers says.
"If you listen to governments, then you are not going to make a lot of money. Governments lie, distort and make mistakes," Rogers tells CNBC.
"Europe as a whole is the largest economy in the world. If Europe has problems,
we in the U.S. are going to feel those problems."
To cushion themselves against such politically-charged swings in capital markets, investors should own hard assets like oil, which often rise when political
uncertainty sends stocks and currencies falling.
"My way of playing this is to own real assets like commodities," Roger says.
Loose monetary policies such as low interest rates or steps taken to flood
economies with liquidity make commodities even more attractive.
"You now have the Bank of England, the Bank of Japan, the Federal Reserve printing money. The way to protect yourself at a time like this is to own assets."
Commodities often rise when paper currencies weaken, but they fall when demand drops, often the product of cooling economies.
European uncertainty has other experts worried if commodities, which have soared
in recent years, are due for a breather, at least for now.
"Europe is far off from reaching a solution," says Dominic Schnider, global head of commodity research at UBS AG's wealth management unit, according to Bloomberg.
"That's the drag that we have, which will hurt demand for commodities."
Jim Rogers is an great investor, author and respected financial commentaror. He is a regular guest on different TV programs like these of Barron's, FT, Wall Street Journal, New York TImes, Fortune and CNBC. Rogers is the president of Rogers Holdings and Beeland Interests.