Monday, October 31, 2016

Jim Rogers latest view on elections, government policies, US pension funds

Elections in USA
I suspect [the winner] will be Mr Trump but whoever it will be it's not going to be good. I hope you are all prepared because there is going to be some very serious problems in the world. Trade wars always lead to bankruptcies.

I still own a lot of US dollars because there is a lot of turmoil coming, but then I think even the dollar will get overpriced and possibly turn into a bubble.

I wouldn't really own bonds anywhere in the world. If I owned US government bonds I would sell them.

On Australia and government policies
Every time the resources boom stops for a while the Australian politicians think it's going to come back any day and so they borrow huge amounts of money. It's astounding how you guys keep running up debt here. You have to do something about the debt.

Anything that has been in a bear market for 30 years when it turns around it's one of the most exciting places to invest. The single best way is to become a farmer or buy a farm and lease it out to someone else. I see good agricultural returns for the next decade.

US Pension Funds
Nearly every pension plan in America is under water. Some of them seriously under water and this is at the state level.

Investing in Water
I am wildly bullish over water.

Tuesday, October 25, 2016

If you borrow money, use it wisely

There's nothing wrong with borrowing huge amounts of money -- as a country, as a family, as an individual -- as long as you're putting it into productive assets, building for the future. 

In the nineteenth century, the United States borrowed stupendous amounts from all over the world, mainly from Europe. We were a gigantic debtor nation. We put the money into productive infrastructure such as railroads and factories. And by 1914 we got our payoff. We became a creditor nation for the first time in our history. We then became the world's largest creditor nation and the most powerful country in the world. We borrowed all that money, but we invested it wisely. 

But if you borrow a lot of money and buy Rolexes and Porches and big houses... you are not going to thrive long term.

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, 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.