Exclusive Interview with Jim Rogers: Inflation Is Coming 68 comments
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In this DailyMarkets.com exclusive, I spoke by phone with legendary investor Jim Rogers who made his fortune with the Quantum Fund, a hedge fund he co-founded with George Soros in 1970. Over the next 10 years, Quantum gained 4200% while the S&P 500 index rose about 47%.
He is also the author of the best-selling books “Hot Commodities”, “Investment Biker” and “Adventure Capitalist”. Rogers, who created the Rogers International Commodities Index (RICI) in 1998, is one of the most closely watched investors. If you are fed up with the Fed, you are not alone. Recently, Rogers said that Paulson and Bernanke should resign for keeping “zombie banks” alive as they should be allowed to fail.
His uncanny accuracy in predicting the recent commodity bull run as well as the financial crisis has made the media, as well as private and institutional investors, sit up and listen to what he has to say about the markets.
Grace Cheng: Do you think the period of forced liquidation has ended or does it still have a ways to go?
Rogers: I’m sure it has not ended. It certainly has not ended for many asset classes and it probably has not ended for most. It may be over for a few things but it still has a long way to go.
As you’ve said many times, the US government is printing a lot of money right now, when do you think inflation will come around and bite us?
Rogers: Well there is inflation now in many things. There’s temporary deflation in raw material prices and in some property. But throughout history, whenever you’ve had gigantic printing of money and spending of borrowed money, it has always led to higher prices. Unless something is dramatic, it’s going to happen again. When? I don’t know. It’s already happening in some things. I don’t know if you’ve bought any sugar recently or some other things, prices are up and that will continue and it will get worse.
You’ve been bullish on commodities for a long time, recently you said you’re buying the Rogers Metal Index. Do you think that the Obama stimulus plan will create more demand for commodities?
Rogers: Well of course, anything that causes a revival of economic activity causes a revival of demand for everything including commodities. I mean if you’re gonna build bridges you’ve got to build them out of something you cannot build virtual bridges you have to build real bridges, etc.
You’ve said that over the long term, the US dollar is doomed. What are your thoughts on the British Pound?
Rogers: More doomed. It will disappear sooner. If it weren’t for the North Sea, the British Pound would have already disappeared. It’s more doomed. The UK has been exporting oil for 26 years; within the decade, the UK will be a net importer of oil again, and they have nothing else to sell to the world once the oil dries up.
Do you think China will scale back on buying US bonds? And if that happens, how will it affect the US economy and the US dollar?
Rogers: Well if I were China, I would scale back. If I were everybody, I would scale back. The US bonds yield virtually nothing, the dollar is a flawed currency, inflation is coming, higher interest rates are coming. I would think everybody would be scaling back including China. We’re going to have higher interest rates down the road because somebody’s gonna scale back. If not China, Japan or Korea, or who knows, somebody.
You’ve been buying Chinese stocks for many years already, now that China’s economy is doing badly and exports are decreasing significantly, what sectors are you looking at in China?
Rogers: Agriculture, water treatment, people who build power generation, people who build infrastructure, tourism. Many areas of the Chinese economy will continue to do well no matter what happens to the world economy. Many will suffer; anybody who sells to Wal-mart or retailers in America is going to suffer, others will do extremely well no matter what.
My last question, on a personal note, do you miss traveling around the world for fun like you’ve done several times before?
Rogers: No, because now I have two little girls and they’re more fun than anything. I hope someday that I will travel around the world with them for fun. But at the moment, watching them grow up and helping them grow up is more fun than anything I can imagine.
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This article has 68 comments:
kevin
bullinachinamarket.com
Now when a man with that kind of track record (4200% gain over 10 years) gained from being able to look ahead and read the tea leaves ups and sells all his property and all his dollar holdings and moves to China....well....that should tell you something about the state of America now and in the not too distant future.
Heavy will the crown of Messiahhood lay on Obama's head. The 2012 elections are going to be a site to behold. And the safest place to watch just may be in Jim's living room in China.
Small correction. Mr. Rogers did not move to China but rather Singapore which is a city-state in Asia.
On Jan 15 04:55 PM Sentinel wrote:
> Roger is the only one I know who had the balls to sell everything
> he had in America and move to China.
>
> Now when a man with that kind of track record (4200% gain over 10
> years) gained from being able to look ahead and read the tea leaves
> ups and sells all his property and all his dollar holdings and moves
> to China....well....that should tell you something about the state
> of America now and in the not too distant future.
>
> Heavy will the crown of Messiahhood lay on Obama's head. The 2012
> elections are going to be a site to behold. And the safest place
> to watch just may be in Jim's living room in China.
Mr. Rogers is the kind of guy who not only talks the talk but can walk the walk which is very impressive to me.
I have been to China many times and the growth and free market attitude is so strong that it makes me wonder about the future of the United States and my Children living here.
I get the feeling that most of the people that are making long term choices for us in DC have never worked a day in their life and hold the belief that the US government will never have to stop spending more than it brings in. They for sure don't ever think they will have to pay the bill for what was already spent.
Both of my children can count in Chinese and say some other words as I agree with Mr. Rogers that China now is like America was 100 years ago.
They will become complacent when they get rich, but for the next 50 years, Asian equities are the place to be. Commodities will rule until alternatives come along and some commodities just do not have an alternative, things like Steel
On Jan 15 02:31 PM Larry House wrote:
> I hold Jim Rogers' opinions in high regard. He is quite blunt and
> cock sure, which bothers some, but I think he is usually right on
> has a good handle on the "big picture." I agree with the outlook
> for inflation, but it is impossible to say when. Even Rogers said
> that. Going into commodities now could beat a person to death waiting
> for the inflationary pressures to set in. I think investing to capture
> the rise of inflation will be THE major play at some point in the
> future; there is just no telling if it will come late '09, '10, '11
> or later.
Thanks again.
Oh Nurse....time for my meds!
On Jan 15 06:24 PM Sentinel wrote:
> Thank you Roger for the correction. Of course you are right. I just
> remember him traveling all over China and then heard the news that
> he had pulled up stakes and moved to Asia. Just assumed it was China.
>
>
> Thanks again.
concisetrading.blogspo.../
Ryan
conditions like - We China don't mind Iran to have a atomic weapon, so US stop interfering - condition met? We china will buy in the next year 300 billion of treasuries.
Why would China do this - because in the international tick for tack they will get compensate.
I disagree somewhat on the inflation issue... I firmly believe that our banking system is insolvent and that the hundreds of billions of $$$$ in play at the end of each quarter are shoring-up bad debt. This, believe it or not, could continue on for 10-15-20 years depending on the terms of the loans and when they come due. It's an awful thought... Anyhow, my theory on the lack of lending and no inflation...
He really is on the mark with China -- It will be a lot easier for a producer nation with a surplus to develop a consumer sector, than a debtor nation to redevelop a manufacturing sector. There will be some pain over there too, but nothing like we're going to see in the United States.
I think China will see the writing on the wall and cut the U.S. off, they'll use their reserves to act as a buffer while they realign their economy -- to continue to wean this country would insane.
I value his opinion more than any of the others I see in the media. In a year or so I'm sure Jim will say that the U.S. has a zombie economy -- sad, but true.
NOTE: He has a great book out on his travels by motorcycle that is a great read!
we are in a 15-20 year depression cycle based on credit bubbles and baby boomer demographics...
India may be the other star over the next 50 years...
don't see inflation other than a 6-9 month pop from the stimulus packages..
food and water will always have inflation...oil depends on war and terrorism..
usage of oil is heading way down worldwide...retail, travel, consumption,
dining, construction.....dead in the water and bad for oil...
I saw a projection that oil could come it at $20-25/bbl. That seems to be pricing-in the end of the world as we knew it.
On Jan 15 09:24 PM scotty1560 wrote:
> Curbs-in I agree with your thoughts....
>
> we are in a 15-20 year depression cycle based on credit bubbles and
> baby boomer demographics...
>
> India may be the other star over the next 50 years...
>
> don't see inflation other than a 6-9 month pop from the stimulus
> packages..
> food and water will always have inflation...oil depends on war and
> terrorism..
> usage of oil is heading way down worldwide...retail, travel, consumption,
>
> dining, construction.....dead in the water and bad for oil...
On Jan 15 04:55 PM Sentinel wrote:
> Roger is the only one I know who had the balls to sell everything
> he had in America and move to China.
>
> Now when a man with that kind of track record (4200% gain over 10
> years) gained from being able to look ahead and read the tea leaves
> ups and sells all his property and all his dollar holdings and moves
> to China....well....that should tell you something about the state
> of America now and in the not too distant future.
>
> Heavy will the crown of Messiahhood lay on Obama's head. The 2012
> elections are going to be a site to behold. And the safest place
> to watch just may be in Jim's living room in China.
One small issue is that you will be watching, and undoubtedly hoping for a Republican rebirth, in China alone. Jim lives in Singapore but why permit facts from distorting your reality!!!!
Correction: He was the junior partner in the Quantum fund which returned 4200% in the 1970s. Soros has stated explicitly that Rogers was someone who "did the work of 5 analysts" but in the end ALL decisions were taken by him. The work was clearly split up so that Rogers was the analyst (with a knack for seeing the big picture), and Soros the decision maker. Just go google it. Soros went on to build the bulk of his fortune after Rogers left. This is not to take anything away from Rogers' achievements, but the fact is that there's no easily verifiable track record for him, just a lot of predictions over the years, among which many prescient ones. I recently re-read the 1989 Market Wizards and a lot of his predictions there did materialize, but others didn't. Notably, he was already extremely bearish on the dollar then. As another poster wrote, the problem with this big-picture stuff is in the timing, and you can get your shirt ripped off your back in the mean time. For instance, if a new panic breaks out that we're entering a long-term slump (Japan-style, but world-wide this time), commodity prices could drop a lot further from where they're now (as of now, they're still well above the levels before the whole commodity boom started). For what it's worth, that's how I'm playing it: I expect most commodities to sink further in the short run.
As for China, in the very long term I believe he's right, but given that only 30% of GDP there is domestic consumption (40% exports and the rest capital investment, a lot of it in turn export oriented), that there's a middle class of barely 150 million people there, and that the Chinese are tightening their belts even more now their explosive growth has come to a halt, in the short run things could get very ugly very easily there. I don't think the market has fully factored in what's coming in China yet. Now there's this sense that China is in a much better position, but frankly, I'm convinced recent economic statistics there are hogwash (exports barely dipped where those in Taiwan, Vietnam, Japan fell off a cliff... How?!?) and that in a few months the true extent of the decline will become apparent. China needs to overhaul its entire economy, and this will be the work of at least a generation. Chinese stocks are cheap now, but they could get A LOT cheaper in the future.
lol, what a joke
author of the book 'hot commodities'
really hot, aren't they?
"His uncanny accuracy in predicting the recent commodity bull run.."
lol, then why didn't he predict the crash? how un- uncanny is that?
less drama queen writing please.
These are rare qualities in today's world.
However, he's been negative on US stocks for years, and he was in commodities years before they moved.
Nevertheless, he's seasoned, reasoned, and his opinions are definitely worth taking seriously.
Moreover, I think he's dead right on China, and I'm not exactly happy to say that either, because it does not bode well for the USA.
The asset liquidation process is not over by any means.
He is buying now but not because anything will occur immediately. He is buying based on what will occur in the future with his young children in mind.
You can go along with him or go off on your own.
When he is quoted on the liquidation of assets " I am sure it has not ended. I am sure it has not ended for many asset classes and it has not ended for most. It may be over for a few things but it still has a long way to go."
I am not about to second guess his intelligence.
Unfortunately, precious few of our political and Wall Street elites are aware of this principle (and other fundamentals). In the name of a "glorious free market", they've turned ethics on its head and created more damage to our country and economy than Osama bin Laden could have ever dreamed of accomplishing.
Jim Rogers seems to intuitively get what's going on while so many decisions makers are still in denial.
Ryan what does your comment mean? That gold will go lower in near term? It is not right time to buy gold? 200 sma> simple moving average? so we should look for what in sma? for average to move upwards?
On Jan 15 07:18 PM nayr wrote:
> yeah, timing the inflation play is going to be tuff work. Personally
> I wouldn't be buying the inflation trade while GLD is trading below
> a declining 200 SMA.
> concisetrading.blogspo.../
> Ryan
I feel a little sad for Obama. A man of color finally rises to the pinnacle of American politics, but very probably only to preside over the breakup of the empire and possibly the demise of the dollar. Unfortunately, he like virtually all his predecessors has no clue when it comes to economics, and has nominated almost exclusively Keynesian advisors, the same ones who led us down the long winding path to ruin under Bush, Clinton, and all the rest. The Friedmanites are in disgrace right now, which they too deserve, but I hasten to add it was hardly all their fault.
Inflation is when the government prints money. So it has already happened. Rising prices is the effect. Rising prices is not inflation. Rising prices is the effect of inflation.
So the proper statement of the question is "when do you think rising prices will come around and bite us?"
You provide the bailouts, Ill provide the economic crisis...
Gets em every time.
On Jan 15 06:24 PM Sentinel wrote:
> Thank you Roger for the correction. Of course you are right. I
> just remember him traveling all over China and then heard the news
> that he had pulled up stakes and moved to Asia. Just assumed it
> was China.
>
> Thanks again.
On Jan 16 04:52 PM morph366 wrote:
> Being bullish on commodities and China has not been a good trade
> recently. Being outspoken, wearing a bow tie and being permanently
> bearish on the US dollar is one way of ensuring that the TV channels
> will keep calling for interviews.
Look forward to any well thought out comments from anyone who has a grip on the money flow (printing press madness vs. deleveraging psychosis).
The Derivative powder keg mustn’t be ignored in any analysis as this is the biggest monster out there, and no one seems to want to fully confront the beast.
Regarding inflation, it is very simple indeed - the rising economy inflation rising, declining economy inflation declining.
It is not a secret what economy is now, I don't need a GOD or Jimmy with Soros to teach me that.
Mark Medayski
On Jan 15 02:31 PM Larry House wrote:
> I hold Jim Rogers' opinions in high regard. He is quite blunt and
> cock sure, which bothers some, but I think he is usually right on
> has a good handle on the "big picture." I agree with the outlook
> for inflation, but it is impossible to say when. Even Rogers said
> that. Going into commodities now could beat a person to death waiting
> for the inflationary pressures to set in. I think investing to capture
> the rise of inflation will be THE major play at some point in the
> future; there is just no telling if it will come late '09, '10, '11
> or later.
On Jan 16 09:59 PM nport wrote:
> I guess the two investors I admire most are Rogers and Buffett.
> So I'm torn between their public statements on the future. Buffett
> says he is out of bonds in his personal account and getting long
> domestic stocks. Rogers says get out of the dollar. It's finished
> as the world's reserve currency. Inflation is coming big time.
> I can't argue with his reasoning. The US owes 13 Trillion and will
> continue to print money until all the trees are gone. We have promised
> 50 T to the baby boomers for medicare and of course social security
> adds to the looming deficits. And I haven't totaled the stimulus
> coming, nor the tarp, etc. That means, higher interest rates and
> that can't be good for stocks. A weak dollar can't be good for any
> nation long term. So who is right about the long term viability
> of our economy? Buffett or Rogers? Or are they not mutually exclusive?
> Can they both be right? I'll take your answers off the air.
On Jan 17 05:47 AM mbr wrote:
> Faced with the state of the US of North America what would you do
> if you had to decide about using your USD reserves? Keep buying US
> treasuries to preserve exports to the US? But US demand is going
> down and the fed prints whatever money is needed, so what is the
> point? Instead it would be wiser to spend the reserves buying hard
> assets, patents and products that can be used to develop china's
> internal economy. Guess who the beneficiaries might be...
No doubt China will take its place, it already has, in the leading nations of the world but you rarely see any negative press on China either. Russia, Japan and China in that order have the world's largest demographic problems to deal with in the next 50 years that will have huge negative systemic consequences for all three countries. Ours pale by comparison. We've got some serious budget problems to deal with in the next 10 years or so, but at least we are dealing with what should be the bed rock fundamentals for growth (i.e. population). Not so these other three...of note, this is one reason why comparing the US with Japan is a limited analogy at best.
On Jan 17 04:17 AM Robin Hood wrote:
> Gentleman - many of us here share certain qualifications / degrees
> etc from ivy leagues etc. However, in this tumultuous environment,
> it is very easy to start intellectually vomiting out any and all
> thoughts. Instead if we are to beat this thing lets start streamlining
> our thought process, cutting away the self-reassuring theories, and
> start focusing on what is going to happen objectively and in all
> probability. Yes, the powers that be have skillfully confused everyone
> (deflation vs. Inflation etc). A better way of cracking this might
> be by simply running down the numbers - If there is to be a large
> quantum of money printing, how many dollars are going to enter the
> system as compared to what is going to get sucked out by deleveraging?
> The answer to this question (which I have no clue about as the figures
> out there vary) will provide a lot more clarity than economic theory
> at this point. I agree with Buffett - you don’t need to apply
> a 150 IQ here, but rather a 100 (thinking simple and clear) could
> turn out to be far more effective.
>
> Look forward to any well thought out comments from anyone who has
> a grip on the money flow (printing press madness vs. deleveraging
> psychosis).
>
> The Derivative powder keg mustn’t be ignored in any analysis as this
> is the biggest monster out there, and no one seems to want to fully
> confront the beast.
Jim is lauded to live and work in Singapore to gain first hand knowledge and contact with the Asian culture --- a prudent choice as Singapore is a city state that epitomizes the best of Asian culture -- hard work, discipline, and conscientiousness.
The Grand Old Party (GOP) now faces the specter of some sixteen (16) years in the political wilderness (assuming that Secretary Clinton would be the heir apparent and nominee-in-waiting). Young-Republicans-now-... might have to wait until they become grandparents to once again see the GOP back in power.
Some say that this Century (2000-2100) could belong to the Asians. We need a guy like Jim to lead the GOP's comeback, vice someone like that VP-nominate from a small town where the only exposure to Asian culture is perhaps dining in a dingy Chinese restaurant.
The timing for restructuring and reviving the GOP is ripe, and the opportunity for Jim to return to America to serve is apt.
The simple fact is any large corporation trying to pull out of China can't do it. The government will block the funds going out of the country. That means their theoretical investments and paper gains are just that. Theoretical. The only hope they have is that their factories can make enough products to pay for their outlays before something drastically goes wrong. If you invested in real estate, good luck to ya. Hopefully you did it though a Hong Kong intermediary who can pay you out at the first whiff of trouble.
If you think Satyam is bad, don't even think about looking under the hood of China's numbers. By and large every analyst will tell you their economic data is falsified from the regional governments all the way up to the top. And corporate governance and regulations are zilch. Why do you think all the illegal stuff origionates there. No transparency, no accountability, and corruption.
Hate to keep saying it over and over, but look to Nassim Taleb, not Rogers, Schiff or your local frustrated peak oil short-crude goldbug fiat hater.
On Jan 15 04:02 PM Stephen Webb wrote:
> I would be (and am) very concerned of what consequences will result
> if China quits buying US Bonds.
Thanks!
On Jan 16 03:25 PM R JENSEN wrote:
> "As you’ve said many times, the US government is printing a lot of
> money right now, when do you think inflation will come around and
> bite us?"
>
> Inflation is when the government prints money. So it has already
> happened. Rising prices is the effect. Rising prices is not inflation.
> Rising prices is the effect of inflation.
>
> So the proper statement of the question is "when do you think rising
> prices will come around and bite us?"
On Jan 17 01:10 PM kg wrote:
> Inflation = M*V, while M is growing V is cratering. M is easy enough
> to track and manipulate; however, no one but no one knows what is
> going to happen with V nor how long V will stay crushed and contracting.
>
>
> No doubt China will take its place, it already has, in the leading
> nations of the world but you rarely see any negative press on China
> either. Russia, Japan and China in that order have the world's largest
> demographic problems to deal with in the next 50 years that will
> have huge negative systemic consequences for all three countries.
> Ours pale by comparison. We've got some serious budget problems to
> deal with in the next 10 years or so, but at least we are dealing
> with what should be the bed rock fundamentals for growth (i.e. population).
> Not so these other three...of note, this is one reason why comparing
> the US with Japan is a limited analogy at best.
But he shouldn't be telling other nations to sell our Bonds.
We are in a precarious position now and need time to
work and save our way out of this financial crisis.
Jim Rodgers loves his money more than his country!
Rogers is a smart and entertaining guy, the dollar is indeed in a long term downtrend, and Rogers may still eventually be right about exchange controls, but if you had followed him blindly in 1989 you might still be waiting for the "Godot" of a total dollar collapse. Be cautious.
Not to take anything away from Jim Rogers, but the touting of his record is completely subjective and without merit. Where is the data to support the praise that gets heaped on him? Where are his buy and sell calls? Instead, we get generalities. He has been right about some things, and wrong about others. The media (and many investors) are in awe of him because of his wealth.
For example, he has been dead wrong about commodities since the bubble burst. Did he advise anyone to sell? No. He has said that is holding and buying more - the whole way down. This might work for a billionaire - but it spells disaster for the average investor/trader. Can't have it both ways! If he gets lauded for speaking about commodities before the bull run, then he deserves criticism for not giving the sell signal on the way down. Also, he has been dead wrong about the US dollar, but has a ready-made excuse to explain away that one (shorts covering, etc). And he was wrong on treasuries - shorting them too soon. I don't mind that he's been wrong (everyone makes bad calls) but it bothers me that the media never mention those things in their hysterical adulation of the guy.
Another criticism I have is of these so-called interviews (media appearances). They are so superficial that they are nearly worthless. He never gets asked DETAILED questions. Never gives specifics in his answers - so he can't be nailed down. But not only are the details lacking in his predictions (which is somewhat understandable), but more importantly, in his REASONS as to why he thinks what he does about various investment opportunties. He offers a few VERY broad and general statements with that "I'm right - you don't know anything" tone and attitude and then it's onto the next subject or question.
I like Mr. Rogers, and respect him, but his alleged "record" doesn't stand up to scrutiny andt the media fawning over him is no replacement for serious, hardnosed financial journalism.
On Jan 16 03:18 AM sundrenched wrote:
> "Now when a man with that kind of track record (4200% gain over 10
> years) gained from being able to look ahead and read the tea leaves
> "
>
> Correction: He was the junior partner in the Quantum fund which returned
> 4200% in the 1970s. Soros has stated explicitly that Rogers was someone
> who "did the work of 5 analysts" but in the end ALL decisions were
> taken by him. The work was clearly split up so that Rogers was the
> analyst (with a knack for seeing the big picture), and Soros the
> decision maker. Just go google it. Soros went on to build the bulk
> of his fortune after Rogers left. This is not to take anything away
> from Rogers' achievements, but the fact is that there's no easily
> verifiable track record for him, just a lot of predictions over the
> years, among which many prescient ones. I recently re-read the 1989
> Market Wizards and a lot of his predictions there did materialize,
> but others didn't. Notably, he was already extremely bearish on the
> dollar then. As another poster wrote, the problem with this big-picture
> stuff is in the timing, and you can get your shirt ripped off your
> back in the mean time. For instance, if a new panic breaks out that
> we're entering a long-term slump (Japan-style, but world-wide this
> time), commodity prices could drop a lot further from where they're
> now (as of now, they're still well above the levels before the whole
> commodity boom started). For what it's worth, that's how I'm playing
> it: I expect most commodities to sink further in the short run.<br/>
>
> As for China, in the very long term I believe he's right, but given
> that only 30% of GDP there is domestic consumption (40% exports and
> the rest capital investment, a lot of it in turn export oriented),
> that there's a middle class of barely 150 million people there, and
> that the Chinese are tightening their belts even more now their explosive
> growth has come to a halt, in the short run things could get very
> ugly very easily there. I don't think the market has fully factored
> in what's coming in China yet. Now there's this sense that China
> is in a much better position, but frankly, I'm convinced recent economic
> statistics there are hogwash (exports barely dipped where those in
> Taiwan, Vietnam, Japan fell off a cliff... How?!?) and that in a
> few months the true extent of the decline will become apparent. China
> needs to overhaul its entire economy, and this will be the work of
> at least a generation. Chinese stocks are cheap now, but they could
> get A LOT cheaper in the future.
I have no doubt that China is improving their productivity, as each passing generation is improving their education level compared to the last and it is easy to improve when your starting point is so low. One could make the same bullish case for such basket cases as Bangladesh, Nigeria, and even Zimbabwe. If you buy real assets in those countries today....eventually you will come out ahead. I will feel more bullish on commodities when inventory levels start to decline again instead of build. I would feel more comfortable with the RMB if their excessive printing of currency was not significantly higher than the USA. One could easily make an argument that the general ideas Rogers hands out are dangerous for investors to follow. Then again, everyone must find their own investment ideas and Rogers taps into a large crowd of investors who favor hard assets over intellectual property rights.
--- Does he ever talk about his investing mistakes?
--- How much is he worth?
--- I think that his ex-partner (George Soros) once said
"Jim knows when to buy but doesn't know when to pull
the trigger" (i. e. sell).
--- Many people hyped Japan in the '70's and '80's.
I think China will have the same fate.
I think Jim Rogers is full of baloney
On Jan 18 06:40 AM Puddle Jumping wrote:
> Wow, everyone is so bullish on China. It must have the greatest technology
> out there. Hmm, can anyone name 2 patents that have came out of China
> that has revolutionized the world in the past ...uhm....50 years?
> Anyone?
> I have no doubt that China is improving their productivity, as each
> passing generation is improving their education level compared to
> the last and it is easy to improve when your starting point is so
> low. One could make the same bullish case for such basket cases as
> Bangladesh, Nigeria, and even Zimbabwe. If you buy real assets in
> those countries today....eventually you will come out ahead. I will
> feel more bullish on commodities when inventory levels start to decline
> again instead of build. I would feel more comfortable with the RMB
> if their excessive printing of currency was not significantly higher
> than the USA. One could easily make an argument that the general
> ideas Rogers hands out are dangerous for investors to follow. Then
> again, everyone must find their own investment ideas and Rogers taps
> into a large crowd of investors who favor hard assets over intellectual
> property rights.
The USA still has few industries left capable of successfully competing on world markets: defense, airspace, pharmaceutical, oil-exploration and agricultural.
Up to recently, the world (particular Japan and China) needed US industrial know-how in most critical high-tech development and manufacturing areas. Unfortunately, the western world has lost/wasted the last 10-12 years thanks to the Wall-Street financial markets corruption and manipulations. At the same time, the US political leadership was totally asleep at the "steering wheel." It started to believe in its own BS propaganda.
Now, China and Japan are capable of producing a majority of high-technology products without US or EU developed technologies. This strongly devaluates the value of US currency US$.
Somehow, the US political elite does not understands this fundamental change in the world balance of power.
PS
This is the price we about to pay for electing corrupt and incompetent imbeciles as our leaders.
Our political and economic elite is trying to rejuvenate financially broken American consumers buying appetite. Their actions are pathetic. It is a matter of time when Chinese, Japanese, etc., will stop lending money to the USA and drastically curtail exchanging of their products for highly devalued US$.
I agree with you, JoeRyan, but I think it'll take a little longer than 2010. The masses may be mesmerized, but their stupor will be a little more longlasting than just 1-1.5 years. When NObama starts campaigning for 2012, he'll have to prove that he has done anything at all and that's when people will say, "Wha--?!"
'V' is the ultimate variable today. As long as there is fear (between banks, consumers, govts etc), V will be frozen. The Tank is full but nothing's going through the fuel line. This may be why they're now trying to lend (bailout) industry directly - auto etc. The banks are hoarding to cover the next round of toxic assets that will soon be uncovered- so may be best to get V moving by creating liquidity industry wise.
The issue then is - which industries do you focus on. 'First come first serve' as in the case for auto or by employment metric. Also, you may just end up with a nationalized system - no different to pre 1990 eastern europe.
The incoming Treasury Secretary is going to age about 20 years in the next 4.
On Jan 17 01:10 PM kg wrote:
> Inflation = M*V, while M is growing V is cratering. M is easy enough
> to track and manipulate; however, no one but no one knows what is
> going to happen with V nor how long V will stay crushed and contracting.
>
>
> No doubt China will take its place, it already has, in the leading
> nations of the world but you rarely see any negative press on China
> either. Russia, Japan and China in that order have the world's largest
> demographic problems to deal with in the next 50 years that will
> have huge negative systemic consequences for all three countries.
> Ours pale by comparison. We've got some serious budget problems
> to deal with in the next 10 years or so, but at least we are dealing
> with what should be the bed rock fundamentals for growth (i.e. population).
> Not so these other three...of note, this is one reason why comparing
> the US with Japan is a limited analogy at best.
Given that perspective, there are a lot of great companies for sale at 50% off or better, so it's no surprise that Buffet is buying like crazy.
On Jan 16 09:59 PM nport wrote:
> I guess the two investors I admire most are Rogers and Buffett.
> So I'm torn between their public statements on the future. Buffett
> says he is out of bonds in his personal account and getting long
> domestic stocks. Rogers says get out of the dollar. It's finished
> as the world's reserve currency. Inflation is coming big time.
> I can't argue with his reasoning. The US owes 13 Trillion and will
> continue to print money until all the trees are gone. We have promised
> 50 T to the baby boomers for medicare and of course social security
> adds to the looming deficits. And I haven't totaled the stimulus
> coming, nor the tarp, etc. That means, higher interest rates and
> that can't be good for stocks. A weak dollar can't be good for any
> nation long term. So who is right about the long term viability
> of our economy? Buffett or Rogers? Or are they not mutually exclusive?
> Can they both be right? I'll take your answers off the air.
However, Mr. Rogers is being honest and truthful with what he believes. In the end it is always a lack of honesty and integrity that is at the core of a major disaster. The focus should be on the truth, the core of problem and the proper dealing with those responsible, and that is not happening. There are many insiders responsible that are still walking on this and gaining even more (power and $$$).
Telling someone to withhold the truth will not bring us closer to a solution.
On Jan 17 10:51 PM concerned3 wrote:
> I respect Mr Rodger's investment expertise,
> But he shouldn't be telling other nations to sell our Bonds.
> We are in a precarious position now and need time to
> work and save our way out of this financial crisis.
>
> Jim Rodgers loves his money more than his country!
"As for China...there is domestic consumption (40% exports and the rest capital investment, a lot of it in turn export oriented...that there's a middle class of barely 150 million people there, and...exports barely dipped where those in Taiwan, Vietnam, Japan fell off a cliff... How?!?)
You are saying that China has more middle-class citizens than the USA, and is growing. They have an export-based economy that is protected by low wages, subsidies, lack of regulation, isolated/fixed currency and long term contracts that protect them from their neighbors' economic problems. They have pre-built 20 empty cities that can house 100k+ people and are building the infrastructure and power plants to turn them on.
You are very correct in the short term, and I hold FXP to short China.
But long-term commodity demand, as middle-class Chinese grow to a greater population than that of the entire continent of North America, cannot be denied.