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Jim Rogers '64: 'More crises down the road'

U.S. and Europe are headed for years of decline, legendary investor warns

Investment News
December 19, 2010

(more about Rogers, and more, and more, and more, and more, and even more)

No euro, no Fed in Mr. Rogers' neighborhood

Ireland and Greece should have declared bankruptcy. Ben Bernanke is inept. College students should abandon their finance programs and study agriculture or mining.

Jim Rogers has never been a shrinking violet when it comes to investing and Tuesday was no exception. The legendary investor, who co-founded the Quantum Fund with George Soros in 1973, predicted further turmoil and volatility in the financial markets in the coming years — thanks largely to irresponsible governments and money-printing central bankers.
"We're going to have more crises down the road," Mr. Rogers said at a Reuters investment conference in New York on Tuesday. "The politicians keep delaying the problems rather than dealing with them."

Mr. Rogers is a fierce critic of the U.S. government's bailout of the banking sector and the European Union's attempts to stave off sovereign-debt crises in Greece and Ireland. He contends that the U.S. and Europe are headed for years of decline because of their loose monetary policies and rescue tactics.
Despite having positions in both U.S. dollars and the euro because "everyone is so pessimistic," he suggests the euro will not exist in fifteen years and that the U.S. may default on its debt in the next five years. He is currently short U.S. Treasuries.

"Things may look better for a while, but I'm very worried about the longer term," Mr. Rogers said.

Now based in Singapore, Mr. Rogers is more optimistic about Asia's economic outlook. He says China's high rates of savings and investment will fuel an extended period of growth. "People work hard there and they save their money. I buy renminbi whenever I can."

A prominent commodities bull for the last decade, Mr. Rogers also continues to favor real assets over financial ones. Despite signs of economic weakness in the U.S. and Europe, he suggested that commodities in the energy, metals and agricultural sectors offer the best alternative to investors. His rationale? "There are shortages developing in the commodities sector and they'll only get worse. If the world economy improves it will help commodity prices. And if it doesn't, central bankers will print more money, causing inflation," he said.
And what would Mr. Rogers advise President Barack Obama and Fed Chairman Ben Bernanke? "I would tell them to abolish the Federal Reserve Bank and resign their jobs."