Wednesday, October 19, 2016

History shows that a Deutsche Bank failure could have dire implications for the world

RT News: Firstly just to make it clear why has the US imposed such an enormous penalty?

Jim Rogers: The main reason is that the US government is deep in debt. They’ve got a gigantic deficit – they are desperate for money. They’ll try to get it anywhere they can. I can’t imagine that Deutsche Bank should be liable for $14 billion, but I’m not involved.

RT: The bank said it won't pay anything near to what the US has asked for - how will this be settled?

JR: Either Deutsche Bank goes bankrupt, which is going bring down the entire world financial system, or they are going to come up to some kind of compromise at a lower number. If Deutsche Bank does have to pay $14 billion – you should be very worried anyway, but especially if they have to pay $14 billion.

RT: How desperate is Germany's main bank at this point? Will it survive without a bailout?

JR: If you look at its balance sheet you will see it has huge, staggering debts both on balance sheet and off balance sheet, which means their debts that they don’t reveal directly. It probably will survive if it has support, but otherwise we all are going to have huge problem in the next couple of years. I’ve told you before: you should be very worried. The western world, the world is going to have a lot of problems the next couple of years. Be worried!

RT:Just back in August the US was furious over the EU's decision to demand billions of euro from Apple in back taxes. Many see the recent scandal around Deutsche as revenge from Washington. What's your take on that?

JR: These governments do play tic-tac-toe and tic for tac over and over again, which is not good for any of us. But that is what they do. You give these bureaucrats power – they take it and they run with it. Power corrupts, it has been happening for hundreds of years.

RT: In the event Deutsche Bank fails what would that mean for the EU and the financial world in general?

JR: Then the EU would disintegrate, because Germany would no longer be able to support it, would not want to support it. A lot of other people would start bailing out; many banks in Europe have problems. And if Deutsche Bank has to fail – that is the end of it. In 1931, when one of the largest banks in Europe failed, it led to the Great Depression and eventually the WWII. Be worried!

Germany has been rightly telling everybody not to bail out their banks, but if they have to suddenly bail out their banks, then other countries will be furious and the politicians will have a field day.

Monday, October 17, 2016

Markets don't care about emotions, market care about facts

The UK pound can go down a great deal. If Scotland leaves it will certainly go under US$1. Sterling is in a serious bear market, serious period of decline. You got a lot of debt. I don't see anything to make the Sterling go up. $1 will certainly be the new normal. But that's not going to happen this year, that's three or four years down the road.................. 

Jim Rogers is a smart investor who co-founded the Quantum Fund with George Soros in 1973. By 1983 the fund gained more than 4000 percent.

Monday, October 3, 2016

Chinese Yuan joins IMF reserve currency basket | Jim Rogers reaction

RT: Why do you think the Yuan is joining the reserve currency basket and what does it mean for the global economy?

Jim Rogers: It is joining because the Renminbi is now one of the most important currencies in the world. It is the fifth most commonly used. Remember, 15 years ago nobody knew there was a Chinese currency. It has skyrocketed and it is going to be even more important in the future.

RT: How will this affect the four major world currencies already in the IMF's reserve basket: dollars, euros, sterling and yen? Might this pose a challenge to the dollar’s international dominance?

J Rogers: The fact that it is in the IMF basket now is really just a publicity thing, it is not very important. It is significant that it is there. But that’s about all. Trade flows are what will change that. The fact that the British pound is there doesn’t help it, or the Swiss franc or anything else. Just because you are in the IMF basket means very little. What does mean something is trade flows, and as I’ve said, the renminbi 15 years ago was nothing. Now it’s already one of the most dominant currencies in the world.

RT: China has been the world's largest exporter since 2009, overtaking the US. What does the yuan having reserve currency status mean to traders?

Rogers: Eventually, we will all be using the renminbi. The renminbi is the only thing I see on the horizon which can challenge the US dollar to become the world’s reserve currency. It is not there yet, but it is moving and moving fast. The US dollar is a very flawed currency; the renminbi has its problems, the main one right now is you cannot buy and sell it. It is a blocked currency. But eventually that will change and it will probably challenge the US dollar…. In Hong Kong, you can use the renminbi in any shop you want. It is happening in Macau, and in Singapore there are people who will take the currency. It’s not big yet but it is on the way.

Monday, September 26, 2016

We can get rid of central banks.. it has happened in the world many times

Jim Rogers is a smart investor who co-founded the Quantum Fund with George Soros in 1973. By 1983 the fund gained more than 4000 percent.

Wednesday, September 21, 2016

History shows the most unlikely time to invest was actually the best time to buy

The lessons of history are very, very, very clear. Pick any year in history, whatever we think is true, that year, 1900, 15 years later, it's a whole entirely different world. And we all know in 1900 how the world is, and we should be saying to ourselves, find me a weird guy. Find me a strange guy to tell me how this is going to change. 1950, 15 years later, everything we knew, everything we knew was totally wrong.

So I, at least, have learned that, that lesson of history. And perhaps that's why I'm more-- not interested, more I'm excited when I start looking at the way the world is today and what we all know. Because I know what we all know is not going to be true in 15 years, no matter what it is. And my problem is how do I figure it out. How do I figure it out? Whatever we know today, no matter what it is is not going to be true in 15 years.

I've learned over my career, not just my career, but reading about the world, the stranger it sounds, the more you should say, wait a minute. That sounds really strange. Let me look at it. Let me hear what's going on. Because I have certainly learned that over my life, not just my life. You read history. You read anything. As I said before, the lesson of history is that most people don't learn the lesson of history. They ignore the lesson of history. Now, we all know that if we'd invested in China 1981, we'd be the richest people in the room right now. And yet, in 1981, including me, we would have said what's wrong with you? Don't you know about Mao Zedong? Doesn't he know about the Great Leap Forward? Doesn't he know about all this stuff, what "Chinese" is?

Or Japan: Don't you know about the disaster of what this country was? If you'd said Japan, don't you know about Hiroshima? The atomic bomb? You don't know about the dictator, the emperor? How could you  invest there? They're little, bitty yellow people who must be dishonest and cruel. But those are the lessons of history. 

Tuesday, September 20, 2016

Why you might want to short the US

You have to be short and most markets are already down. There are very few markets that aren't down already in the world, except the averages in New York. Now, you can certainly short Europe, because it's going to get worse. You can certainly short the UK, because it's going to get worse. 

But the things that are still high, I'm sure your parents taught you to buy low and sell high. Well, the things that are high still happen to be the US, more than anything else....  You should be short the US. That's the market that's still the highest. It hasn't gone down yet. One can have shorts in any place you want, but the Japanese market is down 70%, 75% from its all-time. The Russian market -  who wants to short Russia? I'm long Russia. I mean, where are you going to short? Everything's collapsed. I'm not buying India. There was a recent remarkable development in India, but it's not enough to make me buy India. 

Jim Rogers is a smart investor who co-founded the Quantum Fund with George Soros in 1973. By 1983 the fund gained more than 4000 percent.