Sunday, October 10, 2010

Jim Rogers: Federal Reserve Will Implode

Last night at the Mises Institute in Auburn, Alabama, author, investor and global traveller, Jim Rogers, was awarded the prestigious Schlarbaum Prize for the lifetime defense of liberty.

Rogers told attendees to the event that the United States has had two central banks prior to the Federal Reserve and that they both disappeared. He said he fully expected the same thing to happen to the Federal Reserve. He charged that Ben Bernanke as Fed chairman only knows how to print money, and that this money printing policy of the Fed will cause it to collapse from within.

Rogers also called for an audit of Fort Knox and raised questions as to the quantity and quality of the gold there.

He said that the Great Britain was the world power of the 19th century, the United States the power of the 20th century and that China will be the world power of  21st century.

Rogers, who now lives in Singapore, said that he is making sure that both his daughters learn Mandarin.

He said that he remains bullish on gold and silver (although he warned of short-term pullbacks from time to time) and was generally bullish on commodities, specifically mentioning rice and sugar. He also was bullish on farm land and said the new millionaires will be those who own farm land.

After the event, I caught up with Rogers and asked him about a new report by Roubini Global Economics that states the demographics in China were changing, that the country was getting older and that this will result in a slowing of the growth in China. He agreed China's population was getting older, but disputed that this would slow China down.

"Roubini has only been right once in his life," Rogers told me, "and that time he was right for the wrong reasons, so its probably a very bullish sign for China that he is bearish."

26 comments:

  1. so his answer to Roubini's claim is that Roubini's is usually wrong ? Thats one of the most idiotic answer i ever heard.

    just like krugman, he thinks he doesn't need to think/critic about the other-side arguments.

    what about hugh hendry's claims about china ? Is rogers going to come up with similar stupid answer here too ?

    arrogance is particularly dangerous in financial world.

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  2. One should go to china and then make comments. As one who travels there frequently, I can't see it imploding in my lifetime. I can however see the US collapse before china imploded

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  3. I like how Rogers is so pro-China. Yet, he lives in Singapore and not Beijing...

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  4. Roubini has been wrong more than right. Rogers has been right more than wrong. I'll invest with Rogers!

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  5. In the face of the pending Food Safety Act, I cannot see how investing in farmland makes sense, since food production will come under control of the FDA in any contrived emergency at all, with enforcement powers granted to the jack-booted DHS. Given the collapse of the dollar and ensuing economic chaos, confiscation of farm production at every level of production would seem inevitable on the present course.

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  6. Anonymous:
    Can you read? He answered the point in the second to last paragraph.

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  7. To anonymous @ 10:34AM

    Rogers said Roubini was right for the wrong reasons... not just that he was right or wrong. Rogers investing strategies and thinking concerns itself more with those reasons than he does with Roubini's track record.

    I agree that basing a response upon a knee-jerk reaction to one's track record is "idiotic". However for some reason you have chosen to ignore the "wrong reasons" Rogers alludes to in his comment about Roubini.

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  8. Don,
    Rogers didn't say he was investing in US farmland.

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  9. For any of you who think that Rogers position on China is due to Roubini being bearish on China, it is obvious that you have never seen Rogers speak. If you had, you would realize that he was likely chuckling at this statement and making a point about Roubini's track record, not actually giving his reason for being bullish on China. Amateurs...

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  10. I will put my money on Rogers! That is where the smart money is headed without fanfare...Enough said...

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  11. Roubini only been right once huh? Bit like you then Rogers!

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  12. Buying farmland in New Zealand and parts of Australia and China and parts of Africa and even in parts of Russia is what Rogers in on about.

    Sione

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  13. Rogers is a billionaire trader. Roubini is an economist. I'll put my money with Rogers anytime.

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  14. I agree with anonymous.

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  15. I'm confused about Jim Rogers! HERE IS AN AMERICAN WHO HAS BENEFITTED FROM OUR CULTURE AND EDUCATION. HE SHOULD BE HELPING OUT AND SHOWING LEADERSHIP TO HIS FELLOW AMERICANS.
    EASY TO ABANDON AMERICA DOESN'T HAVE THE BALLS TO DO WHAT IS RIGHT.

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  16. ROGERS WAS WRONG ON GBP PREDICTING PRE ELECTION MAY 2010 THAT IT WOULD FALL TO PARITY WITH THE USD $ - IT IS NOW OCTOBER 11 2010 AT USD 1-60 = GBP £1

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  17. I like how Rogers is so pro-China. Yet, he lives in Singapore and not Beijing...


    Rogers would love to live in China. But, he has been quoted as saying the water and air quality are horrific at this moment in time. He has two little girls and is being a responsible parent.

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  18. Who's this Jim Rogers Guy and what's all this fuss about China!

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  19. Well, one can own farmland and be a billionare. But one must understand also that it most likely will not be as profitable for a farmer. Rogers like many sound economists that I trust. Believe that things of credit will hold steady to down. Things of non-credit will soar from inflation. That will push land prices and commodities sky high. But operational costs will hit the limit up too. That will make us farmers rich but hard to sell your land and operational cost/profit a struggle still with more money to account for. Regulations as always will play a big part as it drives most big farmers to indenture servants of their operation. So farms get bigger and fewer. Government is about consolidating wealth to a few on top. Mainly the Federal Reserve bankers.

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  20. Anonymous:
    Rogers never said that about the GB Pound. It was a fabrication by someone which was withdrawn, corrected, and an apology issued.

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  21. I agree with Rogers on the Federal Reserve and its pending doom. Rogers however is apparently not a man of convictions and it appears he believes the pursuit of wealth at any cost is still noble. He is wrong. The money will follow free enterprise born of individual liberty. Anything else is just another kind of bubble.

    The Chinese economy is largely built upon the largess of an enormously cheap labor pool, relatively non existent environmental laws, unsustainable demand from western populations, and the cheap replication of innovations created outside of the Chinese culture. It is challenged with a suprisingly fragile political system whose foundation is predicated on a subjugation of the weak. Within her boundaries resides a culture in the habit of stealing intellectual property. She harbors a nationalist arrogance that makes equitable foreign policy a distant dream. The dragon's breath fuels the machinery of the state as it engages in the ruthless exploitation of third world resources and grows deeper roots for its' deplorable human rights record. Genocide is an acceptable side effect of her predatory appetite for rare earth minerals.

    A Chinese 21st century is an open door to the dark ages 2.0. Liberty needs to be reborn. While the U.S. (and the western world) may have lost the heart of the lady with the torch, China has never had it. The loosely regulated freedom of the individual human being is the only solution for governance and the only sustainable economic model.

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  22. If Rogers was playing heads up poker with Roubini, I think Roubini would be showing his tatoes on his back when he left( no shirt)

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  23. Roubini is just an academic, he argued that jim is an insane because 'gold is a bubble' and said it will not go to 1500/ounce and now u know whos right. Roubini's only way to get in touch with money is his salary, while rogers has a 20-30 years track record of outperform the market.

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  24. i rather follow the man that put his money where his mouth is.

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  25. The point about the Federal Reserve is well taken, but the standard regurgitation about the 21st century belonging to China is shallow and myopic. The comment a couple above this about China's economic and political dynamic is much more insightful, addressing the fundamental point that growth in personal wealth presupposes a society not run by thieves and thugs.

    But the real hidden dynamic is embedded at the end of the article. China's savage one-child policy, now entering its third generation, has produced a population inversion that even the Chinese now identify as a social time bomb. They call it the "4-2-1" problem: one productive worker supporting two parents and four grandparents. This demographic inversion, initially brought about by political force but now self-sustaining, will cause an irreversible collapse of population which demographers call a death spiral. The economic drag caused by the high ratio of non-productive (i.e. elderly) to productive citizens will be a built-in disincentive to add more non-productive citizens (i.e. babies). This is already visible in Japan, which has entered its own demographic death spiral, and will soon start hitting Japan.

    Add to this the fact that increasing wealth and a growing middle class naturally militate against tyranny, and you have a recipe for social unrest of the sort the world has ever seen. I can easily believe that America will collapse economically, but I have a hard time believing that China will be able to step in as the next superpower.

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