The reason to switch from paper (stocks, bonds, etc) to physical commodities, according to investor Jim Rogers:
His central argument is that a new bull market has started that will match the fireworks seen in the dotcom-fuelled stock markets of the late 90s. This time, though, the bull market will be in commodities not shares. Rogers' reasoning is straightforward: raw materials are running out.
"There has been no great oil discovery in the past 35 years," he argues. "The North Sea has peaked. Alaska is in decline. Mexico is in decline. All these great oilfields are in decline. To anybody who thinks I am lying about this, I would ask: where is the oil going to come from?
His basic premise is that why should we be surprised by huge fluctuations in the price of oil given the order of magnitude changes in price we have seen in other products. For example, products as varied as tech stocks and sugar have gone though severe adjustments in the past (sugar went from $0.014/lb to $0.66/lb in the span of six years starting in the late 1960's). What makes oil any different than the typical commodity product? And given the amount of speculation involved, what makes it any different than a tech stock?