Jim Rogers Says US Needs to Face Reality, Not QE3
global investor and chairman of Singapore-based Rogers Holdings,
Jim Rogers, spoke Monday about the Standard & Poor's credit
rating downgrade of US sovereign debt, saying the 'no news' event
has nothing to do with the markets plunging and will not affect
his investment strategy.
He also discussed
the Federal Reserve monetary policy, arguing that further money
printing, better known as QE3, will bring more inflation, social
unrest and will lead to lost decades for the United States. He urged
investors to be prepared as 'more problems are coming'.
The only thing
that will work, he said, is to face reality by letting people that
are bankrupt go bankrupt.
an interview from Singapore with Rishaad Salamat on Bloomberg Television's
"On the Move Asia" Monday, Rogers said: "Everyone
has known that America is the biggest debtor nation in the world".
Poor's decision to cut the US's long-term debt rating is "not
news, it's not even old news, it's just not news," Rogers said.
The US downgrade
will not affect financial markets and has not caused the plunge
in markets, he argued.
are coming down because America has problems, Europe has problems,
China is trying to slow down...There's plenty of reasons for markets
to come down, but it has nothing to do with S&P," Rogers
told Rishaad Salamat.
is investing on the downgrade, should not be investing at all, he
said, adding that the world had known - about the US's problems
- for a long-long time.
look ahead. No none who invests on the news makes any money. The
markets are looking 6-12 months ahead and when you look 6-12 months
ahead there are some bad things coming."
Where are markets
when you see panic like this it may be getting to building up towards
a selling climax. If it gets to a selling climax, I will cover my
shorts...because this kind of action usually leads to a reversal
at some point," Rogers said.
What is he
his investment strategy, Rogers, who predicted the start of the
global commodities rally in 1999, reiterated he owned commodities,
real assets, especially agriculture, gold and silver.
continue to fall, I will cover my shorts, perhaps all my shorts,
and I will look for things to buy. And it looks as commodities are
continuing to be beaten down, that's where I will put my money,"
the legendary investor said.
Gold and silver
are going up too high too fast, he said, adding he hoped a correction
will take place, "so that I can buy some more".
and silver, over the next few years, are going to go much higher,
as will agricultural commodities," Rogers predicted.
this will protect me if things go bad," he told Bloomberg.
Gold for December
delivery in New York advanced as much as 3.6% to a record US$1,774.80
an ounce today on concern the economic slowdown will worsen. The
precious metal has surged 23% this year, heading for an 11th year
of gains, as the global sovereign-debt crisis and a faltering economy
boost demand for wealth protection.
had their biggest daily advance since May 2010 as of August 8.
Gold also advanced
today to a premium over platinum for the first time since December
2008, as demand for a haven outweighed the appeal of platinum used
mostly in catalytic converters.
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Rogers has taught finance at Columbia University's business school
and is a media commentator worldwide. He is the author of Adventure
Gift to My Children, and A
Bull in China. See his
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