Class News

Jim Rogers ’64 predicts that China will take Taiwan

March 16, 2022

Jim Rogers ’64 was interviewed by Kitco, a global precious-metals authority and retailer of bullion products, about Ukraine and Taiwan. See the video below.

With China on your mind, remember to register for the next Class Zoom: “China: Collaboration or Confrontation?” See the invitation email here. The event is scheduled for Thursday, April 28 at 3:30pm EDT with Chas Freeman ’64, Mac Deford ’64, and Ward Wickwire ’64.

The following video is 40 minutes long. If you’d rather read about it than watch it, there’s a narrative summary just below it.

Narrative Summary

The markets, in particular equities, are still due for one more push upward before the bull rally ends for good, according to investor and best-selling author Jim Rogers. Rogers told Michelle Makori, Editor-In-Chief of Kitco News, that markets are currently pricing in an eventual de-escalation of the conflict in Ukraine.

"Let's say that it does calm down. I would suspect that markets, stock markets especially, would go through the roof because then people would [breathe] a sigh of relief and central banks are not going to be as aggressive in raising interest rates as they were three months ago, and so, markets will go through the roof. We'll have one huge rally, probably the last rally. This has been going on since 2009, so that would probably be the last rally, it'd be a wonderful rally. And, if it happens, I hope I was smart enough to sell that rally. I have not been selling yet," he said.

Rogers co-founded the Quantum Fund with George Soros in the early 1970s, and throughout the decade into the early 1980s the fund returned 4,200%. During that decade, U.S. inflation was in the double digits, and the world witnessed similar geopolitical turmoil with the Vietnam War and then the OPEC Oil Crisis.

"There were many opportunities that we took advantage of all over the world, and we use a lot of leverage. I don't use as much leverage now, and I hope I don't need to. Those were some of the reasons that we had success, but we also saw inflation. Inflation was very clear to me then, and it is to me now with all the money printing. So, if you can find assets that are going to go up in price during inflation, you will be successful," he said.

Rogers has previously stated that Russian and Chinese stocks were one such example of a "hated asset."

"Usually, if you buy hated assets, you will be successful over time," he said. "I went to Venezuela last year. … It was a disaster. America put sanctions on so I cannot invest in Venezuela, but that's the kind of place. And, if you get it right, when there's a disaster on, you'll probably be successful in a few years."

On Russian stocks, moral objections aside, Rogers would still buy into that market now, if that market were available to foreign investors at this time.

On China, Rogers said that reunification with Taiwan is only a matter of time.

"If I were China, I'd just wait. China's been around for thousands of years. They know patience better than many people. So, if I were China, I'd just say, I'll wait, don't worry. Looking at a map, [Taiwan's] going to be part of China again someday," he said.

The meddling of foreign affairs by the U.S. has compelled Russia and China to form stronger ties, Rogers noted.

"Russia and China are getting closer and closer together, but we're forcing them to do that. Whether this leads to war in Asia soon, I don't know, I hope not, but if I were China and I ever wanted to have war over Taiwan, this would be more or less the best time to do it because the rest of the world is distracted by other things. I'm not suggesting they will, I'm just saying if I was thinking about war with Taiwan," he said. "Washington is pushing [China and Russia] closer and closer together, and we're fighting with both of them."

Additionally, it's likely that China is arming Russian for the war in Ukraine, he said.

"I am sure that somewhere, somebody in Russia is getting weapons from China, just like Ukraine is getting weapons from the U.S. and Europe, whether it's above board or below board, it's happening and it will happen more and more with our friends," he said.

However, given that U.S. equities haven't yet crashed, investors have not priced in the possibility of a major war in the Asia-Pacific region, Rogers said.

During times of war, commodities perform well, Rogers said.

"Commodities, throughout history, commodities go through the roof where there was a war," he said.

Specifically, Rogers recommends the agriculture sector as an investment play right now.