Friday, October 19, 2012

Jim Rogers: America will have a few lost decades

legendary investor Jim Rogers used another opportunity to attack the U.S. economy, after some remarks he made earlier about that 2013 and 2014 will see markets slip into a deep recession. Now, Mr Rogers, reffering to the period between 2000 and 2009 who is often referred to as the "Lost Decade" for U.S. investing, said that there will be more lost decades for the States. During that time markets were barely able to scrape up any gains over the ten year period

Jim Rogers drew the comparison between United States of America's economy and that of Japan. The Asian one that has been well documented for years and years of poor market performance and a sputtering economy. "The idea that you prop up people who are bankrupt is what Japan did. Japan had two lost decades, America will have a few lost decades" said Rogers.

He suggests to invest in agriculture and farmland in order to protect yourself from these "Lost Years". Rogers has also stated that he likes both gold and silver, but for the time being he favors silver over its precious metal counterpart.

Saturday, October 13, 2012

Jim Rogers doubts US government jobs data

Top investor Jim Rogers has some doubts about the data that the US government is feeding to the public about the US unemployment. According to the authorities in the United States of America there is decline in the unemployment in the States, but Rogers thinks that the administration is misleading the public. The US jobless rate dropped to 7.8 percent last month, the lowest since US President Barack Obama took office in January 2009, according to a report released on Friday by the US Department of Labor. The labor agency also revised previous numbers to show the US economy created 86,000 more jobs in July and August than first estimated.

Jim Rogers, co-founder of the Quantum hedge fund, Expressed his skepticism about the reported improvement in the US job market. According to the investor, the latest round of quantitative easing will not fix the US economy. "I have learned not to take advice from the government, especially the US government, which frequently misleads its citizens," Rogers said in a media briefing in Taipei.

"There is an election coming in the US and the administration wants to win", he also said. Rogers added that most other institutes believe US unemployment remains worse than the official statistics suggest. "Even if the reported drop in the US’ unemployment rate is true, it has nothing to do with the US Federal Reserve’s third round of quantitative easing that was initiated last month", believes Rogers.

"Printing money has never worked throughout history," he said. "Sometimes it worked in the short term, but it’s never worked in the medium or long term." He gave as an example Zimbabwe, saying that if printing money could ameliorate debt, the cash-strapped African country would be a wild economic success. By early 2009, the Zimbabwean dollar was rendered effectively worthless as the government issued bills in denominations of up to 100 trillion dollars in a bid to rein in debt problems, which instead heightened inflation and poverty.

According to Rogers, it is better to admit one’s mistakes and accept the reality of the situation so things could be improved once the worst part is over. Rogers, who is currently based in Shanghai, also said China is right in trying to slow its economy down for the past three years because of its inflation and property problems. "It is the right thing to do for China as economic conditions in Japan and the West slow down," he said.

Monday, October 8, 2012

Jim Rogers debates with Marc Faber over the merits of investing in Chinese equities

Eastern markets are in the center of the investment community's attention after some poor results that Chinese economy have shown recently. Investments gurus Jim Rogers and Marc Faber engaged themselves in a heated debate over the long term value case of the Chinese equity market in a CNBC interview.

Jim Rogers explained his position that he is using share price falls as a value opportunity and has recently upped his stake in the region for the third time in his career. "China is going to be the next great country in the world," he told CNBC.

"I was violently and vehemently telling people not to buy China when it was going up in 2007. I only buy China when it collapses."

Faber on the other hand argued it is difficult to be bullish on Chinese equities given their poor share price performance over the past couple of years. Since 2007 the Shanghai stock exchange has fallen from 6,100 to 2,074 today, a fall Faber cited as the main reason for his continued bearishness.

Faber is refraining from adding exposure to equities across the board, believing markets are overdue a sharp correction.

"I just want to have a lot of cash, because I think that within the next six to nine months we can buy just about anything 20% lower than it is now," he said.