I found this video on YouTube from one of my favorite market commentators Peter Schiff who follows Austrian Economics. He is very negative on US economic and central bank behavior and how it is leading to the road of ruin. His analogy filled commentaries are a pleasure to watch even if you don’t agree—although his slander that the Fed and Government are spending money like drunken sailors is highly inaccurate—-drunken sailors spend their own money and not the taxpayers funds!
Also, he suggests that his 6 year old should be put in charge of the economy—at least he will play with his toys and not screw up the economy like the treasury and the Fed!
I like the way he is able to create sound bites in order to simplify complex issues in very short order—Suppose he has lots of practice.
Jim Rogers being interviewed in August in the Bloomberg Singapore office. He looks very tired and is quite cranky particularly at the end where there was some sort of misunderstanding about his predictions about the price of sugar. To be fair he generally doesn’t set specific price targets and it turns out he didn’t with sugar either—apparently there was an incorrect Bloomberg quote attributed to him.
The interviewer is Michael Whitney who is a former commodities trader turned commentator and you can definitely see the “trader aggressiveness” in him during the exchange.
Some Items of Interest:
Michael Whitney tossed out the idea that maybe sugar wouldn’t go as high because there would be a faster supply response compared to the past—due to the globalisation of capital and better communication about crops etc. Jim’s response was interesting as he pointed out that we are now burning the stuff for fuel (for better or worse) and also that there are now 3 billion people in Asia who are striving for a better life. The letter reflects that when people become more affluent they like to buy more sweet things and that raises demand. The last time sugar spiked China and India were not a big factor. China was still run by Mao or his cronies and India was being ruined by their politicians of the era.
In summary Jim gave his normal response that he has no idea how high sugar will go—he just knows that things have a tendency to go much higher than they were before and much higher than anyone thinks that they will go.Currently prices are reaching high’s in London that have not been seen since the 1980’s.
He says a major currency collapse is imminent due to the massive amounts of money printing that is occurring all over the world. Where it is and which currency is difficult to predict but he just had to point out that Iceland and Russia have had recent collapses for the panel to acquiesce to his point.
Other highlights include:
He is wildly bullish on commodities given 2 underlying factors. If the world economy recovers on the back of the massive money printing then demand for commodities will increase and the price will rise. If the world economy does not get better–they are printing so much money that commodities will be the best place to be.
Most industries are getting worse as their fundamentals deteriorate yet for commodities the fundamentals are getting better–the recent price drop has restricted expansion and closed marginal production.
Rogers suspects that someone will start selling US treasuries. The thought process is that they will not want to be the last person standing if the others start to sell their massive holdings. It could be the South Koreans, Russians etc.–who knows? Thereby creating a currency crisis vis a vis the US dollar.
He likes gold but would rather buy silver at these levels–remember he has been long gold for 8 years or so and has no plans to sell his gold or silver holdings. He would rather buy farmland than either gold or silver at this point. He recently started a new fund that is buying farmland in Canada and Brazil. What is interesting about this is that his fellow co-founder of the Quantum fund George Soros, is long Potash assets as he is believes that there will be a shortage of food in the not too distant future.
Jim wishes that he was short of US treasuries given recent price action—but stated that one way he may protect himself is to short bonds as they are starting to adjust their prices to reflect great inflation and rising issuance.
He likes China but is not buying right no given the recent price run up. He was buying in October and November of 2008 and has been buying Chinese shares for 20 years. He has never sold a Chinese share in all that time.
The title speaks for itself.
The man cannot believe that someone who is wrong as often as Bernake is actually listened to by people of some intelligence.
Indirectly though he must think Bernake’s inflation policies are accomplishing asset inflation—he apparently is not short anything at the moment which is one of the few times in his life that this has occurred.