Jim Rogers: It's Going To Get Worse and Worse,
It Is Ludicrous To Think Too Much Debt Can Be Solved by More Debt
global investor and chairman of Singapore-based Rogers Holdings,
Jim Rogers expects a rough ride ahead for the economy and sees the
US as a bigger problem than Europe right now. "You have to
own real things if you're going to survive," he says.
been doing his pre-Christmas rounds this week talking to various
business media in the US about his investment strategy, commodities,
precious metals, the state of the economy, Europe, QE and his distrust
of the Fed among other topics.
Maria Bartiromo on CNBC's
Mapping the Market on Wednesday, Rogers reiterated his view on the
state of the economy: In 2002 we had a problem, 2008 was worst -
debt was higher - in 2013, or whenever the next one is, it will
be worse because the debt is going through the roof, he said.
going to get worse and worse...we're shooting our bullets, we're
wasting money," Rogers added.
The legendary investor argued that while Europe was facing problems
with individual countries, "they are solvent." The EU
as a whole is not a big debtor nation unlike the US which is the
largest debtor nation, he said.
In his usual
'straight to the point' style, Rogers told CNBC: "Eventually
people will say, wait a minute, we're back where we were, things
are worse than they were before.
of too much debt is not solved by more debt. This is ludicrous."
is his investment strategy in such an environment?
doing anything at the moment, I'm sitting and watching," Rogers
told Bartiromo. I'm short technology stocks in the US, emerging
markets and European stocks and long commodities, Rogers said,
He also owns
currencies including the Japanese Yen, the Swiss Franc, the Dollar
and some Euros. Rogers, who often called the US dollar a "total
disaster in the long term", explained that the US currency
was now "beaten down a lot and, as turmoil occurs around the
world, some people will flee to the dollar," before stressing
that he doesn't really think the dollar is a safe haven.
As far as the
euro is concerned, " They're [the Europeans] going to make
us feel better for a while [reference to the December 9 EU summit],
so the euro will rally, but be very careful," he warns.
not solving the problem, no country has announced we're going to
have less debt in a year or two or three." All are going to
have higher debt, the problem is getting worse, he stressed.
things don't get better, they're going to print a lot more money.
When they print money, you have to own silver, you have to own rice,
you have to own real things if you're going to survive," Rogers
Asked if Gold
would break US$2,000 in 2011, he said it might, but he doubted it.
"Gold has been up 11 years in a row and that's very unusual
for any asset class," he explained, before adding that it would
not surprise him if gold didn't continue to consolidate for a while.
I hope it continues
to consolidate and I hope it goes down so I can buy more, he said.
"I want to buy more," Rogers noted.
fell back today to this week's low of US$1,705 per ounce today lunchtime
in London. US investors saw the gold price open New York trade 2.1%
lower from last Friday's finish of US$1,745 per ounce.
prices are still holding fairly well supported," reckons VTB
Capital's Andrey Kryuchenkov in a note, "and any negative reaction
to the [European] summit today would only see limited losses in
gold as opposed to other...more volatile precious metals, also suffering
from growth concerns.
downside [however] a break below US$1,700 would see losses to our
key support at US$1,680 and the longer term January uptrend,"
according to Krychenkov.
QE3 in drag
In an interview
Finances Breakout Tuesday, Rogers argued that
the Fed was not telling the truth about quantitative easing.
is lying to us, he stated, One reason the markets
are holding up so well is that they are printing money as fast as
officially recognized, "there is QE3, the Fed is pumping money
into the system," says Rogers, disputing most Fed statements
over the last six months.
He argued that
the Feds artificially low interest rates are really something
akin to QE3 in drag."
the Federal Reserve is doing now is ruining an entire class of investors,"
yourself for much higher inflation
interview with Newsmax.TV Tuesday, Rogers continued with the
distrust theme, this time disputing the US government's unemployment
and inflation rates.
lies about the numbers that they put out. Don't take your advice
from any government, or you are going to go bankrupt," Rogers
sank to a 32-month low of 8.6% in November, it was announced last
Friday. Official figures showed the jobless rate fell sharply from
9.0% in the previous month, as the economy created 120,000 new jobs.
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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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