You need to have a portion of your wealth in something tangible—something you can hold in your hand, like a hard asset.  I’m talking about oil, grains, livestock, sugar, copper, aluminum, gold, silver, platinum and even forest products like lumber.

The price of oil will never go to zero!  Someone will always be in the market to buy gasoline.  Gold has never been worth $0.  Silver could always buy you a meal–even in ancient times.

But can the value of a stock or a paper currency go to zero?  Yes, indeed.  One good way to invest in hard assets is to buy the Market Vectors RVE Hard Assets Exchange Traded Fund (HAP).  This ETF closely tracks the Hard Assets Producers index which consists of over 250 companies engaged in the production and distribution of hard assets and related products and services.

The Hard Assets Producers index was developed by the legendary international investor Jim Rogers.  It includes water and renewable energy sources like wind and solar which are ever more important natural resources.  Some of the big holdings of the index are Monsanto, Exxon Mobil, Potash, Syngenta, BHP Billiton, Archer-Daniels-Midland and Gazprom.

Protect your wealth and invest in hard assets.

Source: Invest in Hard Assets!

The global population is peaking and is consuming more food than it’s producing. This will make food scarcer and cause it to rise in price.

But there are more subtle reasons for investing in commodities right now. Rogers says that although stocks may touch crazy valuations in the near term, they may be in worthless currencies – a vista Notes readers will be familiar with. This from a recent interview with Rogers in the Economic Times:

Central banks all over the world have printed huge amounts of money, and the real economy is not strong enough for all this money to be absorbed… so, it’s going into stocks and real assets such as commodities. It’s a mistake what they are doing. It’s giving short-term pleasure, but there’s long-term pain as we are going to have much higher inflation, much higher interest rates and a worse economy down the road.

The American bond market is already beginning to go down dramatically as people realize that the American government has to sell huge amount of bonds, and secondly, there is going to be inflation, serious inflation, as it was always in the past when you had governments printing huge amounts of money.

The fiscal deluge is lifting stocks. But they’re getting frothy. And Rogers reckons the current upward trend won’t last.

It’s going to snap. Later this year, next year, we are going to have currency problems, maybe even a currency crisis. I don’t know with which currency — maybe with the pound sterling, maybe with the US dollar, who knows. It maybe with something none of us have at the moment. When you have a currency crisis, stocks will be affected, many things will be affected. It is not sound, what’s happening out there in the world.

In the 1930s, we had a huge stock market bubble which popped. And then politicians started making many mistakes. They became protectionist. They made solvent banks take over insolvent banks and then both banks failed in the end.

They are doing many of the same mistakes now. What’s different this time is that we are printing huge amounts of money which they did not print at that time. So, we are going to have inflation this time.

There are a number of ways to play this scenario with hard assets. But to keep things simple, you may want to focus on the following three market-beating commodities ETFs (hat tip ETF Trends).

1) The iShares S&P GSCI Commodity-Indexed ETF (NYSE:GSG), up 8.1% for the year

2) Notes’ old favorite, the PowerShares DB Agricultural Fund (NYSE:DBA), up 7.5% for the year

3) The Market Vectors-RVE Hard Asset Producers ETF (NYSE:HAP), up 25.9% for the year