- The world was long overdue for a recession and the bubble has now popped
- Rogers believes governments are making a grave mistake, printing money in an attempt to prop up the economies
- Asked where he feels there are investment opportunities, Rogers confirms aside from precious metals, he is holding US dollars, as well as agriculture
- He reiterated that there’s been a lot of economic damage, and this is far from over “It’s going to get worse”
Jim Rogers presides over Rogers Holdings and is well known for his role in the Quantum Fund which he co-founded with George Soros in 1973.
In an interview with Core Consultants on 8th April 2020, Jim Rogers ditches his legendary bow tie and speaks candidly from the comfort of his home, explains why he believes gold prices will shoot way beyond their all time high and how governments are all thinking short term. The following is a transcript of the video.
Lara Smith: Hello everybody. I’m here from Core Consultants. I’m here with Jim Rogers, who is speaking to us from his home in Singapore. Jim needs no introduction, today is presiding over Rogers interests and is part of the Quantum Fund. Jim, last time we spoke seven years ago, you gave an address called “The world according to Jim Rogers.”
At that time, we’d just come out of the economic recession. Life was good. Things were going up. Now we’re headed into Covid19, what’s your take?
Jim Rogers: Well, the world’s been over 10 years since the U S has had a recession, I’ll use the US as the largest economy it’s the longest in American history. So if nothing else, timewise we’re overdue, doesn’t have to happen, but it always has. And now we’ve had, you know, we’ve had a pin which popped the bubble we’ve had the virus. But something would have popped it anyway. Yeah. The sky rocketed. Stocks got overpriced in America. They went up ten years in a row. No, we were overdue. We found something that popped the bubble, but something else would’ve.
Lara Smith: And gold is hitting over 1667 was the last time I checked. 1669 now.
Jim Rogers: I didn’t buy gold for a long time, but I’ve been buying gold again since last summer and silver as well, I certainly am buying both gold and silver. So I would buy either today I would buy silver because it’s much, much cheaper on a historic basis.
Lara Smith: But speaking about gold being very expensive on a historic basis. So the highest it’s ever been is in 2011 at $1,900 broaching that. Do you think you could break that?
Jim Rogers: I know Lara it was 1,911 US dollars per ounce to be exact; I owned it. so I know, it will certainly break that, it right that it will probably be X times that. You know, throughout history, when people lose confidence in governments or money, they always find gold and silver, whether they should or not is irrelevant.
No. And they will again, and it will certainly make new highs. We have serious problems ahead out.
Lara Smith: So why buy silver? Just because it’s cheaper relative to gold at the moment? Or do you think the prospects for silver are better?
Jim Rogers: I bought both last week, but I’m buying more silver because silver’s cheaper.
Lara Smith: And beyond this, after the virus what happens? Do we see recovery? We’ve seen governments go in…
Jim Rogers: Well, most governments are making a serious mistake, if you ask me, you know, the US doesn’t really care about the long term. There’s an election in November or Trump and Russia out of all want to get elected. US is already the largest debtor nation in the history of the world and it is staggering the amount of money they’re printing and the amount of money they’re borrowing. You know, I feel sorry for young people. I mean, if you, any young person, including you, you know, this is going to be terrible down the road. I’ve got two younger daughters. It’s going to be bad for me, and I’m much older, but what they’re doing, and not just the US, the Japanese, they’re all, they’re all doing horrible, horrible things for the future of their countries.
And the future of the world. But for what it’s worth, China’s doing less horrible things. They still have interest rates in China and the Chinese government spent some money, but nothing, nothing like the Japanese or the Americans or some other people. Oh, it’s just this is going to leave a terrible, terrible problem for the world.
Lara Smith: Well, maybe just on that, what should they have done instead? We saw in the recession that they had quantitative easing Q one Q two in the case of Europe, printing money, for lack of a better word, lowering interest rates, the response has been much the same to this virus from an economic level, lowering interest rates; we will see, I’m sure more quantitative easing. What do you think they could have done differently or should be doing differently?
Jim Rogers: They did the same in 2008 and in 2008 at least there were interest rates, now interest rates are zero all over the world, so monetary authorities don’t have much scope for lowering interest rates, but they do have printing presses and they are running printing presses.
Lara all throughout history we’ve had recessions. Recessions are not fun when you go through them, but they clean out excesses within the economy. They’ve always had them, and they have been good for the economy in the long run, like a forest fire. Forest fires are horrible if you’re in them, but they clean out the underbrush, they clean out the dead wood and the forest can grow better after the forest fire.
I want to repeat. Recessions are not fun to go through, but they’re good for the world. Unfortunately, the past few years, several years, many Western countries have refused to let nature take its course and they have printed and they have propped up failure. The way the system is supposed to work when people get into trouble, competent people come, take over the assets and reorganize and start over. Now, in America and Europe and Japan and other places, the way the system has been working is when the people get in trouble, the government takes the money away from the competent people and gives it to the incompetent people and says to them, okay, now you compete with incompetent people with their money. Propping up failure has not been a good success system ever in the history of the world. But we keep doing it and it’s getting worse and worse and worse. What they should have done is let nature take its course. I don’t like recessions anymore than anybody else, but propping up failure. I can give you an example. You know, the Japanese did it in 1990- it’s 30 years later. There’s still suffering. The Japanese stock market is down 60% six oh, that’s not a typo, it’s down 60% since. Scandinavia at the same time can have a similar problem. They let people go bankrupt. They had a horrible two or three years, but Scandinavia has been great for the past 30 years. In 1920 America had the same problem. You know what they did?They raised interest rates. They balance the budget then had a very, very bad, two or three years, but then they had the best economic decade in the history of America.
I mean, history is pretty clear. Propping up failure does not lead to great futures.
Lara Smith: So where do you see sort of, unsaid pockets of opportunity in these economies. We’ve got huge debts, we’re going through a recession now…
Jim Rogers: Well, I own a lot of U S dollars, mainly, not because the US dollar is sound, but because people look for a safe haven in times of turmoil. And compared to the other, most of the currencies, it’s not, it is less bad or people think it’s less bad. So US dollars, I own China, I own Russia. I own agriculture. I own gold. I own silver. I told you I bought more silver and gold last week.
There’s always some opportunity. I have a few shorts there always a few opportunities, no matter what’s going on in the world.
Lara Smith: It’s been said that after this, we will see the biggest rise in economic history, bigger than what we saw when China urbanized; the start of the Chinese urbanization. This economy should return more millionaires than what we’ve had an opportunity in the past.
That’s what some of the commentators are saying. Do you agree with that sentence?
Jim Rogers: Well, we’re going to have a big rally in the financial markets because first of all, we had extraordinary pessimism. Even worse a few months ago than it was in 2008, 2009. So whenever there’s huge pessimism, when everybody’s on one side of the boat, you should go to the other side of the boat at least for awhile, and that’s what’s happening, it is going to happen, we’re going to have a huge rally, but we’re not finished with this, Lara. You know, there’s a lot of economic damage that has been done. Huge amounts of debt have been and will be built up. No, no, this is not over yet. It’s going to get worse. I mean, everything is going to look great for a while, but no, everything’s going to be bad before this is over. You don’t just clean out something like this in a month or two.
Lara Smith: Do you think it could take years?
Jim Rogers: It’s certainly going to take many months. I think in every recession in America, again, it’s been two years so it will be 15 months or something like that. It’s certainly going to be longer than 15 months before this is over.
Lara Smith: Right?
Jim Rogers: It’s not to say it. And when it is all over, we’re not going to have huge booms and great recoveries, fantastic profits to be made by being long in some places. But this route, and I owned this rally, but this route is not the final say.
Lara Smith: And apart from precious metals, which you’re buying, are there any other commodities which you’re looking at? I mean, oil. Is that at $20 a barrel?
Jim Rogers: I’m not buying any commodities just because I’m lazy right now. Let’s see. I did buy some gold and silver last week. I bought a shipping company, a Russian shipping company. I bought a Chinese wine company. You know, if I find things that are cheap, really cheap, I hope really cheap.
I do step in and buy some things. I’m certainly looking, I mean, sugar’s down. Sugar was down something like 80% over the past many years. Sugar is not expensive. There’s certainly going to be opportunities out there.
Lara Smith: Right. Okay. So we’ll end off there, is there anything else you want to add into what’s happening in the world according to Jim?
Jim Rogers: Well, you should go wash your hands. Okay. And tell everybody you know, to wash their hands and be careful. I’m obviously worried about that the virus, it is killing people and many people are getting very sick. I’m more worried about the consequences, the economic consequences of the virus. As I said before, sometimes the cure can be worse than the disease. So I worry about what I have children. I worry about me, but I certainly worry about my children, because what they’re doing, they’re trying to get reelected. I’m more worried about the future of my children, so everybody should be careful and everybody should be worried. So let’s do it again sometime. Okay?
Lara Smith: Thanks so much Jim, nice seeing you again.
Jim Rogers: Thank you. Bye bye.
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