Jim Rogers:Social unrest, civil war and…a huge mess

Saturday, December 31, 2011
By Paul Martin

Jim Rogers isn’t too optimistic about stock markets in 2012, sees longer term systemic collapse

December 30, 2011

INTERNATIONAL. Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers has been talking about his 2012 predictions.

In a nutshell, he is neither too optimistic about the stock market for 2012 nor about what’s going to happen in the world in the next two or three years.

Speaking to Australia Financial News Network (AFNN) December 23, Rogers said: “The problems are going to continue to get worse until someone solves the basic underlying problem of too much spending and too much debt.”

He sees the biggest risk to global growth in 2012 as “too much debt…too much consumption…and the central bank in the US which keeps printing money.”

Rogers, seen as one of the world’s most successful investors, highlighted the scale of the problem to his host: The problem is that the measures America needs [to solve the crisis] would cause huge pain for a while, but, if we don’t take our pain now, and we wait until the market forces the pain on us, then it’s going to be systemic collapse.”

Refusing to get drawn into US politics, Rogers nevertheless provided a tacit endorsement: “Gary Johnson and Ron Paul seem to understand the problems that are facing America,” he said.

So what is his prediction for stock markets in 2012?

“I am short stocks around the world. I’m short American technology stocks, I’m short emerging market stocks, and I’m short European stocks,” Rogers told AFNN.

“I’m not optimistic for the most part about stock markets. I don’t own many stocks anywhere in the world. The only offset for the caveat for me is that there is an election in the US, and in France, so wherever there are elections coming, and governments spend spend spend, and throw money out the window to buy votes, so some people are going to be much better off in 2012,” he added.

Speaking to the BBC’s Martin Webber December 26, Rogers reiterated his opposition to printing money as a solution to too much spending and too much debt: ” You can debase currency, and history is replete with governments that have debased their own currency and ruined their own currency for hundreds of – well for thousands of years.”

“You can do that and everything is okay for a while, but eventually you have inflation, you have high interest rates, you have currency turmoil, you have people no longer trusting each other to invest with each other, and then you have the end of the system, and we have chaos, and it starts over again,” he added.

Social unrest, civil war and…a huge mess

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