In an exclusive interview with Birch Gold Group,
Jim Rogers warns of serious market collapse -- Other
topics discussed include Quantitative Easing, Janet Yellen, the effect
of ongoing currency wars on the U.S. economy, and why it's so important
for any person to protect their savings with physical gold and silver.Well, the first thing you need to know is that nobody ever wins a trade
war, a currency war, which is just another kind of trade war. Everybody
loses in the end, some may temporarily come out ahead but it’s temporary
if nothing else. As you have pointed out, the cost of living of many
people is going up, and it certainly is, my gosh, in Japan you have a
currency that’s down 25% in a year. Well I assure you the Japanese are
feeling that because everything that Japan imports has gone up fairly
substantially AND even the things that they don’t import are up because
the Japanese manufacturers and the Japanese producers can raise prices
because they don’t have to worry about competing with the foreigners any
more.
So we’re all losing in currency wars. How long can it go on? Well, it
can go on as long as politicians can continue to print money. The
problem is, of course, eventually the markets will just say, “We’re not
going to play this game anymore” and we’ll have a serious collapse. You
and I can print money all day long, but at some point, you, I and
everybody else is going to say, “Wait a minute, guys, this money is
getting worse and worse and more and more worthless, so why don’t we
stop playing this game?” I wish the politicians were smart enough at
some point to say, “We’ve got to stop this, this is going to be bad.”
But unfortunately they never have, and probably never will. Mr.
Bernanke is certainly not going to stop it, because he doesn’t want to
go down in history as causing the collapse.
Mrs. Yellen, when
she comes in, she’s not going to stop it, first of all she doesn’t
believe in stopping it, she thinks printing money is good. And she knows
– I hope she’s smart enough to know – that if she stops, oh my gosh,
it’s going to collapse. So she’s not going to stop. Nobody
wants to go down as causing the collapse of the world. So I’m afraid
this is going to go on until the market eventually says to them, “Okay,
enough is enough,” we have a big collapse and then they’re all thrown
out and we can start over.
Jim Rogers about whether Larry Summers could have stopped Quantitative Easing:
Well, first of all it’s irrelevant because he’s not going
to be Federal Reserve Chairman. Second, even if he started, you know,
if somebody came in and said, “Okay, we’ve got a terrible problem, we’ve
made horrible mistakes, now let’s change things.” And even if everybody
in the world said, “You know, he’s right, we’ve got to do something”
and they started, well, within a few months or a year or two, the pain
would be pretty horrible and then everybody’s going to say, “Well we
didn’t know the pain was going to be this bad, this is not what we
signed up for.” And then the guy would either be thrown out or
assassinated or who knows what!
At first they say “It’s fine, we want to do it”, but once the pain
comes, the pain is going to get pretty serious. We had Mr. Volcker who
came in, was told “stop the madness” back in the 1970s and he did. Well,
Jimmy Carter got thrown out, because he was who had told him to do
that, because the pain was so bad. Reagan of course thought it was
wonderful, that pain was taking place because that got him elected. And
it was help to clean up the problems. That’s what happens, you cause the
pain and they throw you out.
Which signs would reveal a collapse would be approaching:
Well, I wish I was that smart or it was that easy. Back
in the late 1970s, Mr. Volcker was told and he came in and said: “I am
going to kill inflation because Mr. Carter has told me to.” And Mr.
Carter was very clear that he had to stop inflation. I doubt if we’ll
have that kind of scenario again but we would think, we would hope, that
the Federal Reserve will announce, you know, that they publish their
numbers so we can all see what’s happening. At the moment they are
buying a trillion dollars a year – that’s a trillion with a “T” – of
assets. Eventually we will see that they stop that if they do or slow it
down.
What will probably happen is that they will slow it down at first to
see what happens, and if things aren’t too bad at first – and they
probably won’t be too bad at first – well what is likely to happen is
they will slow it down, things will drop, and then they will rally and
the Federal Reserve will say “Hey, this is not so bad, we can do it.”
And they’ll cut some more. Things will drop again and then rally,
because it will take a while for people to really believe how bad it can
get, or will get. And so eventually they will try to cut [QE], it will
finally cause the collapse, at that point we will have a big change,
because they will throw them out, whether it’s the politicians or the
central bankers or whoever … will continue because they like it, they
got the job because of the collapse and then we’ll finally start over.
But it may be really painful in the meantime.
Jim Rogers said in an interview in Barrons that he is holding gold
right now and expects maybe a buying opportunity to come up. Is that
still the case?
Yes, I’ve owned gold for many years, I’ve never
sold any gold and I can’t imagine I ever will sell gold in my life
because it is somewhat of an insurance policy. I hope that my
daughters own my gold someday, I mean I owned gold, I’ve never sold any
gold and if gold comes down and I expect it to go down, doesn’t mean it
will, I’ll buy more. I’m certainly not going to sell.
Everybody should own some precious metals as an insurance policy.
So if they don’t have any right now, I would urge them to go buy
something, buy themselves a gold coin if nothing else, and see that it’s
not going to hurt. It won’t hurt you to
buy the first gold coin, the first silver coin, and from that you start accumulating as your own situation dictates.
First, do your homework, don’t buy gold because you heard me say it
or even because you hear you say it. But if people don’t own they should
start after they have done their homework. And then they will probably,
if they do their homework, most people will then realize, “Oh my gosh, I
better have insurance, and gold and silver may get me through serious problems ahead.”
Jim Rogers about silver’s prospects:
Well, silver is historically down 60% from its all-time
highs, so yes, I would prefer silver at the moment because gold is down
only what, 30 or 40% from its all-time highs.
Jim Rogers started trading the stock market with $600 in 1968.In 1973 he formed the Quantum Fund with the legendary investor George Soros before retiring, a multi millionaire at the age of 37. Rogers and Soros helped steer the fund to a miraculous 4,200% return over the 10 year span of the fund while the S&P 500 returned just 47%.
