Jim Rogers on Price Inflation, Investing in Asia and Why China Will Continue to Boom
By Anthony Wile - November 17, 2013

Introduction: Jim Rogers was a co-founder of the Quantum Fund, and is creator of the Rogers International Commodities Index (RICI). A native of Demopolis, Alabama, Jim Rogers was entrepreneurial from a young age. His first business venture at age five involved selling peanuts. He attended Yale University where he received a degree in history and then Oxford University where he focused on philosophy, politics and economics. In 1970, Jim Rogers co-founded the Quantum Fund, possibly the most famous and successful fund of its type. Despite his success, he still makes media and television appearances, focused on the free-market principles he believes in and investments in all vehicles, long and short worldwide, that he espouses. He has issued many warnings about the West's debt-making profligacy and has concluded that China will likely constitute tomorrow's most powerful nation-state, in large part because of the energy and discipline of its billion-plus citizens. He is author of many well-received books including the best-selling Investment Biker, a free-market oriented meditation on life and investing and Street Smarts: Adventures On the Road and In the Markets. All his books are available at JimRogers.com.

Anthony Wile: Hello, again. It's been a while since we spoke with you. Any big projects in the works?

Jim Rogers: At the moment, my main priority is my little girls. I just came back from speaking in London and I'm leaving again in a couple of days to speak in Nanjing so I still make a lot of speeches but now my girls are the main thing.

Anthony Wile: Were you pleased with the reception of your book, Street Smarts? Are you working on another?

Jim Rogers: I'm not working on another book, no. And as for my existing books, I'm a little superstitious: I never ask my publisher how my books are doing because I don't want to jinx them. So far all my books are still in print so I guess my superstition must work. I've noticed it's been on the best-seller list at Amazon, which, of course, is encouraging but I don't really have any specific numbers.

Anthony Wile: The really big news has to do with precious metals, from our point of view. Was the market really so overbought that gold had to move from US$2000 an ounce to US$1300?

Jim Rogers: It looks as though it's been correcting for some time. It seems to have been making a bottom over the last year. It is making new lows and seems to be making a bottom. All markets do have corrections along their way. The stock market, as you probably remember, had an 18-year bull market from 1982 to 2000, during which there were many corrections: In 1987 the stock market went down 40% to 60%, 80% in some places; in 1989 it corrected, 1990, 1994, 1997, 1998, etc. There were many corrections in that bull market but it was not the end of the bull market. I think that's what's happening with commodities at the moment.

Anthony Wile: A slump of nearly a third indicates to us that the fundamentals must have changed. Or was gold in a "bubble," as some have suggested? We believe gold was merely reflecting the insanity of Western central banking economies and actually should be high still. Your thoughts?

Jim Rogers: The anomaly in gold was that it went up 12 years in a row, which is extremely unusual. I know of no asset in history that's gone up 12 years without a decline. So I suspect the correction in gold would also be an anomaly given that it's had this strange action for 12 years. It's been correcting for a couple of years now. I don't think that correction is over given that there are still many, many people who are convinced that gold can never go down.

India's the largest buyer of gold in the world, or has been, and the Indian government is blaming all of its problems on gold. So they've put taxes and controls on gold, which has dramatically cut the demand in India. India also has staggering amounts of gold in inventory, both in the hands of the public and also in the hands of the temples. The Indian temples own huge amounts of gold and the Indian government is trying to figure out a way to get everybody to sell their gold. If they can somehow force or persuade the Indian temples to sell their gold then who knows how long this correction will last and how long it will go. If gold went down 50% that would be to $950 an ounce – and 50% corrections, as you know, are very common in all markets. So I'm not buying gold yet and I haven't sold any. I think there's going to be another chance to buy gold sometime in the next year or two and I don't want to sell my gold because I am convinced that the price of gold will go much, much higher over the next decade. Periodically I hedge a little bit of my gold but I've never sold any.

Probably there's less speculation now because, as you know, speculators like rising markets; they don't particularly like stagnant or declining markets. I still have the feeling that there are too many people in the market who think gold is holy; they just cannot conceive that gold can go down and stay down. So I have the feeling that there's still speculation in the market. What I would hope would happen is what happens to most markets, eventually. Many people just give up and say, "I never want to own that again as long as I live." I don't have the feeling that's happened in the gold market yet. If and when that happens there will be a very nice bottom and gold will really take off for the rest of its bull market.

Anthony Wile: What about paper gold and silver, ETFs and futures? Did you hold any? Do you now?

Jim Rogers: ETFs and futures are another, convenient way for people to buy gold. I guess those buyers are perhaps a little more speculative than the people who buy gold and put it in their vault. These days there are many ways to buy gold whereas 30 years ago there were only one or two ways. I presume that people who are buying gold and putting it in their vaults are a little stronger hands than people who buy what you refer to as paper gold but both are legitimate ways to invest in and own gold, though paper gold is certainly more convenient than having to buy it and put it in your vault.

Anthony Wile: How about mining stocks? Are they finished as a class, as some have maintained?

Jim Rogers: Not finished as a class, but because of the convenience of buying gold in other ways there's certainly a lot more competition for stocks. If one wants to buy a gold stock one has to know what one's doing. Yes, if you buy the right stock with the right asset and the right management you'll make a lot of money, whether gold goes up or down – more if it goes up, of course – and it's more competitive now that there are other ways to buy gold. The problem with mining stocks is there are many, many of them and you have to get the right one. Mark Twain once said, "The definition of a gold mine is a hole in the ground with a liar standing at the top of the hole." You have to be a good stock picker, which, unfortunately, most people aren't.

Anthony Wile: It's fashionable in some quarters to bash free-market/business cycle economics because the Internet has provided a very high profile for that kind of economics. Has free-market economics proved predictive this time around the business cycle? Does it explain what needs to be explained, or has Keynesian economics provided us with a better perspective?

Jim Rogers: I think Mr. Keynes, if he were alive, would be a little bit astonished at what's going on in his name. Any kind of economics you want to talk about all have problems but free-market economics is certainly the best explanation and the best predictor of what's going on in the world. Actually, I don't think Mr. Keynes would approve of some of the things that have been and are being done in his name. The free market is still the best solution to all of our problems.

Anthony Wile: If Keynesian economics proves over and over to be unpredictive and unworkable as an economic explanation, why does it remain the dominant establishment economics?

Jim Rogers: Because it's what's been taught in the schools a long time and most other "brands" of economics, if I can use that term, have not been taught in the schools. If everybody grows up being told the sky is blue everybody thinks that the sky is blue. They don't even go over to look out the window to see whether the sky is blue. They just accept it because it's in the schools, it's on the television, it's what the government accepts and so they just accept it. Throughout history we have been taught many things that were incorrect and this is another one of those things. It usually takes time but it will eventually be realized that running up staggering debts, whether it's in the name of Keynes or anybody else, is a bad policy and when it all collapses then Keynesian economics will collapse, too.

Anthony Wile: We've mentioned this to you before, but we'd like you to reemphasize your thoughts on the matter. One of the main groups criticizing free-market economics is a group we'll call the neo-Fabians. These people come from the populist movements that began in the late 1800s in the US and are today influenced by C. H. Douglas. Douglas believed in social credit, the idea that you ought to take an annual chunk of the gross national product and redistribute it to workers to make up for a lack of adequate compensation. Now the Swiss are going to be voting shortly on the idea of providing a living wage to every Swiss adult of 2500 euros a month. The idea of a living wage is a Douglas-type gambit. Is it a good idea for the state to provide a living? Is it possible simply by using the printing press? New Zealand has initiatives of the same sort in the works. Wouldn't such gambits end up in massive price inflation?

Jim Rogers: Not necessarily. Massive price inflation does not help an economy. They cannot stay competitive. We've tried many things throughout history to make everybody better off, whether it's religious solutions or economic solutions, all sorts of solutions, and the only one that's ever succeeded in the long term is the free market.

Now, they can hype these initiatives but in Switzerland's case or New Zealand's case they would become less competitive. The money's got to come from somewhere and, unfortunately, it will come from people who are productive, which means that many of those people will go somewhere else to be productive. If you have to take some of your money to support somebody else you cannot compete as well and you're not going to be as productive. So the economy and the society will go into decline. This sort of thing has been tried lots of times – in Russia, for instance – and it never works. It's not going to work this time, either. That doesn't mean the Swiss and New Zealanders won't do it but a few years from now they'll look back and wonder what went wrong. Another example is Burma. In 1962 it was the richest country in Asia and they did a similar sort of thing. They had a military coup and they tried basically socialism and by 50 years later Myanmar was the poorest country in Asia. It didn't work though it took them 50 years to figure it out.

Anthony Wile: It's the same sort of argument to be found in Ellen Brown's Web of Debt. Brown, Bill Still and many others are increasingly high-profile advocates of what might be called "public banking," the idea that so-called private, quasi-monopolist central banks have not done a good job of managing the currency and that if the "people" controlled these banks, they would do a better job. Your thoughts?

Jim Rogers: Central banks are not doing and have not done a good job and I certainly don't think the people would do a better job by any stretch of the imagination. We might be better off without central banks. In America, we've had three central banks in our history. The first two disappeared. In my view, this one's going to disappear, too, mainly because they keep running up huge debts and printing lots of money and making mistakes. The world would be better off with no central bank than the current crowd of central banks around the world so I suspect that we will have no central banks.

However, the solution when problems get really bad might be that the people say, "Let us control the central banks." That's not going to be any better; it will probably be worse but that may very well become the solution because we're going to have real problems in the next few years caused by the major central banks in the world. This is the first time in recorded history that all the major central banks are printing a lot of money to try to debase their currencies. They're floating a huge, artificial ocean of liquidity and that's going to dry up eventually. When it does we're all going to have serious, serious problems. The central banks are going to get the blame and some of them may collapse or fail or disappear or be replaced by the people. I'm certainly not too keen on letting the people do it because I don't think they'll be any better and they'll probably be worse.

Anthony Wile: Why is money populism seeing regrowth, do you think? The idea of people controlling money through the state was popular in the 1800s after silver was demonetized, popular again in the 1930s when Hitler adopted some of the platform for the Reich and now has been lifted back up by a new set of standard bearers. Isn't this in a sense an argument between communism and capitalism? Is the state a sustainable entity?

Jim Rogers: Central banks in the world are called communist but essentially many of their policies are welfare for the rich or socialism for the rich. There's no question that what's been going on is state supported, so to speak. It's certainly statism where the central banks think they can solve all the problems. They cannot. They're making mistakes, as I've said before. It's certainly a struggle between the state and the private sector, between the statists and the free-marketers, if you will. I guess you could generalize it and say it is another struggle between communism and capitalism; I would call it more statism vs. the free market but they're more or less the same thing.

Anthony Wile: This strikes us as a "Chinese model" for society – a deeply authoritarian, almost psychotic approach to social comity. Your thoughts, please, acknowledging you are a fan of modern Chinese progress? Is the state ever an efficient manager of money?

Jim Rogers: We haven't had any examples in history that survived, where the state was an efficient and adequate manager of money. In China they're more capitalist than some of the Western states now because they do let the market kind of have its head more and they're certainly more capitalist. They're not communist, that's for sure, in China, not anymore. They call themselves communist but they're not really communist today. The Chinese are less and less inclined for the state to do things whereas in the West we're more inclined for the state to do things. The West is going towards statism; China's going away from statism. The Chinese in earlier days did a lot of what we're doing in the West now.

Anthony Wile: Speaking of China, what's going on in that massive country? How effectively is the new regime tackling the corruption problem?

Jim Rogers: Well, they're certainly making a big play, a splash about corruption. Many, many individuals within the Chinese government have been put in jail, not just out of this group but the previous group, as well. Look at the United States where nobody – or if anybody, one or two people – has gone to jail in the past decade despite all the major problems whereas in China, thousands of people have gone to jail. So they certainly are doing a better job than we are in the US and perhaps in the West. We'll know a lot more about corruption soon. They're pursuing it and, as I say, many thousands of people have gone to jail.

As we speak, there is a meeting underway in Beijing on what to do about the Chinese economy. It's a plenary council, which only meets periodically. The first meeting was in 1978 where Deng Xiaoping started opening up the Chinese economy, which has certainly been the most important event in the world economy in the past 35 years. In 1993 they had another one, which had dramatic results. The Chinese say that this meeting is going to have equally dramatic and dynamic results and come up with very important changes. We will know a lot more at this time next week about what the Chinese are going to do. It may be as important as 1993 or 1978, and if they do big things, which they say they are, it's going to be perhaps the most important thing affecting the world economy over the next 10 or 20 years.

Anthony Wile: Is it a good time to invest in China? And if so, where?

Jim Rogers: It would be a good thing to invest in whatever they come out with. In this next week they're going to decide which industries or which areas of the Chinese economy to change, and to change dramatically, so there should be investment opportunities. I wish I knew what they are but I don't have any inside information. In the last few days I did buy a few shares of a financial company but do I think they're going to open up the financial market more and more? It's been a very closed market for a long time. If they do it, if they move more towards freeing up the renminbi, then Chinese finance will be a very exciting sector of the world economy and the Chinese economy. I'm bearish on Chinese finance but we'll see if they start opening it up after decades. The rest of it really depends on what they do. I could give you speculation but why? I'll just wait until next week and we'll know what they're going to do and then we'll know which sectors of the Chinese economy will have a big push from the government, and that's where we should invest.

I did also recently buy shares in a Chinese intellectual property company because China's government said in 2012 they want to promote a revival of Chinese culture, which has been in decline a long time, as you well know. You see what's happening in Korea with K-Pop, Psy gangnam style, etc., so China said, "Gosh, we should have a revival of our culture, too." The government is now behind it and they're enforcing trademarks and patents. They say they want Chinese culture to grow at 20 percent a year in the future. So I've become a director of a small Chinese company that's in this business. It's called FAB Universal – trades on the New York Stock Exchange as FU. So I've bought a few shares of a few companies in China but really, let's wait until next week and we'll know.

Anthony Wile: What about Asia generally? What are the stronger countries from a free-market perspective? Is Cambodia an interesting place to search for investments, as we've heard?

Jim Rogers: Cambodia's a small country, only about 14 million people in the whole country. It went through a huge disaster – just a gigantic disaster – in the country and there certainly are going to be more opportunities in Cambodia. Now, Cambodia doesn't really have a stock exchange yet but anybody who can go there to be on the ground or to find things as the stock market opens and evolves should find great opportunities.

Anthony Wile: What's going on in the US? Can the US get its budget under control? Is price inflation the biggest problem for the West in the coming years, or is it the lousy unemployment picture, or both, or something else entirely?

Jim Rogers: The US will not get its budget situation under control. There are too many forces that would just not let it – too many lobbies, too many interest groups that have an effect on Washington, too many people who benefit from the present situation. So no, the US will not get its situation under control until there's a crisis or a semi-crisis, which is when we'll be forced to do something about it. Until then it's not going to change. The problem's not going to be solved; it's just going to get worse.

Anthony Wile: Are we going to see a bounce back of US jobs and industry in the next few years?

Jim Rogers: Anything's possible, especially if we continue to print money and especially if the value of the currency becomes less and less valuable. The market can do anything if they keep printing lots of money and the currency continues to be debased. If they just keep printing money, anything can happen.

Anthony Wile: You made some predictions for 2013. Let's quote what you told us: "In cotton it may be a great year, sugar may be a great year, currency may be a great year, selling stocks short may be a great year. Bonds – I don't think it is going to be good for bonds." Any changes you'd like to make to those predictions as 2013 winds down? Were you accurate, do you think? Were you surprised by the price action in US stocks?

Jim Rogers: Some stocks have done very well this year. The stocks that make up the averages have done well because the Fed's printed more money. It certainly surprised me how much money they've printed; it's pretty staggering. So things have done well. Sugar looks like it's made a bottom and is rising again. Bonds have certainly not done terribly well this year. They haven't collapsed but they haven't done well. I'm not quite sure now but it looks as though as long as though they're going to print lots of money, huge amounts of money, stocks are going to be okay. What I have to figure out is how all the money printing is going to go on. As far as they're concerned, it's not going to stop at all; it looks fine. If that's the case then some stocks are going to continue to do well because the money's got to go somewhere.

But I will point out that the number of stocks that have been doing well is fewer and fewer. If you look at something called the advanced decline line you'll see that fewer and fewer stocks are doing well whereas many stocks have started to suffer, given the state of the world economy. So just to repeat, as long as they're all printing money and they're determined that they're not going to stop printing money, some stocks are going to continue to do well because, as I mentioned earlier, there's this huge ocean of artificial liquidity that is out there. As long as that ocean of liquidity is around the money's got to go somewhere.

Anthony Wile: Give us a look ahead at 2014. Will Europe start to rebound economically, as the Eurocrats are now predicting? You weren't very positive about Europe last time we spoke. What's the future for the EU in the near term? Will Britain end up withdrawing from the EU, as some have suggested? Marine Le Pen, who's been seeing some electoral success, reportedly wants to take France out of the EU. Any possibility there?

Jim Rogers: Britain and France certainly could withdraw from the EU, as there are people in both countries who want to withdraw. As for the euro, I don't think it's going to survive as it is over the next decade or so. Some nations will withdraw; some might enter the euro. But I do expect the EU to survive, certainly for the foreseeable future. I don't think the people in Britain who want out are going to be strong enough in the next year or two to force that. It could happen eventually because Brussels is a mess they keep making one mistake after another and keep interfering in people's lives more and more and more so Britain might withdraw just because Brussels keeps making so many mistakes. I don't see France being one of the first to withdraw. They may have to pull out of the euro but I don't think they'll pull out of the EU anytime soon.

Anthony Wile: You were right about Obama winning the election, but you were not too positive about his policies as being good for citizens in the US. Your thoughts now, as he celebrates a victory in fending off a government shutdown? Is Obamacare a net positive for the US? Or will it simply add to the problems the US already faces? Is it mainly a cynical ploy to move the US to a single payer system or would that be progress, in your view?

Jim Rogers: There's no question it's adding to the problems because like most government programs it's not terribly well thought out, not terribly well conceived. Even when they wrote it they didn't have all the answers and then they put together some bureaucrats and said, "Okay, come up with answers for us." It's going to make things worse, as somebody has to pay for all of this. There's no sense saying it's free medical care. Somebody has to pay for it and that's making the overall situation in the US less competitive and therefore worse.

As for the part of your question about Mr. Obama, if you look back at what he's done since he's been there, as far as I'm concerned he's not been very successful. I thought George Bush would go down in history as the worst president we've ever had; Obama might. He keeps taking away our freedoms. This man ran saying, "Oh, gosh! Our freedoms have been eroded!" yet he's been worse than anybody in history, as far as taking away basic freedoms in America. And, of course, worst of all, he seems to love wars and blowing people up. So I don't think he's going to have a good name in history at all. He may even go down as worse than Bush, which I didn't think would be possible.

Anthony Wile: Where are some monetary safe havens? Last time we spoke you were bullish on agriculture. Any change?

Jim Rogers: I'm still bullish on agriculture; the fundamentals still continue to improve. As far as safe havens, I don't ever use the word safe when I'm talking about the investment world – or any world, in fact. There's no such thing as safe. It's going to continue to get more and more dangerous in the world and less and less safe because all of these countries keep running up the debts and printing money.

We had a problem in the economy in 2001 and 2002 and then it was much worse in 2007, 2008 and 2009 because the debt was so much higher. Now, of course, the debt is even much, much, much higher. So the next time we have problems in the world economy the situation's going to be even worse than in 2008 because the debt is so much higher. The world is getting worse and I don't see any "safe havens." I'd rather be in farming and agriculture than just about anything but no, there's no such thing as a safe place these days.

Anthony Wile: You were also excited about North Korea and Angola, of all places. Any updates? What intrigues you about North Korea?

Jim Rogers: North Korea's making dramatic changes and yes, I'm very optimistic about it. Unfortunately, there's no way for me to invest in it. I'm an American, and so that's a problem. I wish there were. I'm sure some of those Chinese companies that are pouring in there would be good investments; I just don't know who they are and even Chinese companies are not that easy to invest in. So yes, the changes in North Korea continue to be very dramatic; it's becoming more and more open just like China was in 1978. And if you had invested in China in 1978 I guess you know the answer to the question of how well you would have done. That's what's happening in North Korea now.

As far as Angola, yes, it's a great place to be. It's got great prosperity and lots of money's going in there. The problem is there's no stock market so you have to go there. Neither North Korea nor Angola has a stock market but at least it's legal for Americans to invest in Angola. It's not legal for Americans to invest in North Korea.

Anthony Wile: Any other places people should be watching, in your opinion?

Jim Rogers: Those are probably the best as far as countries are concerned. Ethiopia's got good prospects. Tanzania's got good prospects going forward. Zimbabwe, not at the moment but once Mugabe dies or once he's gone then Zimbabwe will be a great place to invest. I don't think we talked about Myanmar last time. Myanmar still has good prospects if you can get the right sector and the right timing. There's no stock market so it's not very simple to invest in Myanmar.

I'm more worried about the overall situation given the state of the gigantic debt, which is building up everywhere. This insanity may go on for a year or two, but as long as they're going to print money, who knows what's going to happen? It's like the end of the '90s. They were printing a lot of money, a bubble developed and that bubble lasted longer than any rational person would have expected. That's what happens with mania and bubbles and it's been well over ten years since we had our last bubble in America and the West so there's nothing to stop it going on more if they're going to keep printing money. If you're good at investing in a time like that you can make a lot of money. I'm not very good at it because I know that it's artificial but people who don't care, or who think that I'm wrong, that it's not artificial, will probably do very well.

Anthony Wile: Thanks for your thoughts and for bringing us up to date. Anything you want to add or draw our readers' attention to? Any other thoughts?

Jim Rogers: I do want to just emphasize, watch what comes out of China in the next week or two because what came out of that same kind of gathering in 1978 changed the world and they say this one's going to be as dramatic. It's certainly going to be as dramatic for some parts of the world economy, at least. Try to pay close attention and decipher where those changes are going to be because China is the second largest economy in the world. If they come up with more dramatic changes, you don't need to worry about Cambodia or any place else; just focus on what's happening in China and you'll make lots and lots of money.

Anthony Wile: Thanks!

Jim Rogers: Thank you.

Editor's note: We spoke with Jim for this interview at the beginning of the week, before the economic meetings in China had concluded. We look forward to speaking with him again soon for his take on the outcome.

After Thoughts

What leaps out at us regarding this interview is how aligned we are with Jim Rogers's way of thinking. We also think the stock market is being manipulated upwards by this flood of easy money and we are also interested in agriculture, as he is.

Toward the end of the interview, he mentions China and "dramatic changes." He's been very positive about China for more than a decade now and certainly China has boomed during that time.

In fact, Chinese officials have just announced some "dramatic changes" that should be encouraging to anyone concerned about civil rights in that vast and populous nation.

Chinese leaders are even promising greater convertibility for the yuan. Additional overseas investment will be welcomed.

China's big problems are surely its continued price inflation and an asset bubble in real estate. These problems are not much different in some ways than those the West is grappling with.

Asset inflation is generally an issue, as central banks are printing aggressively around the world. We believe that all this money printing is going to supercharge a "Wall Street party," but Rogers's insights regarding other markets and China are correct, as well.

Monetary easing is supportive of securities generally. At the same time, one has to be cautious because of increased volatility. As the Chinese would say, we live in "interesting times."

Thanks to Jim Rogers for providing us with another interesting interview.

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Posted in EXCLUSIVE INTERVIEW, Gold & Silver
  • “Growth Rates”. When I left school, my economic growth and growth rate were spectacular for many years. Then I matured – got old – did all o’that. Happens to countries too. China has reached maturity. The adolescent (economic) growth spurt is over, for her too.
    My nightmare is that the failing U.S. faked economy will cause China to give up the “Yankee Addiction”.

    I talk to a lot of the very young ones – they are different. Even the older chinese think their young are aliens…..

    • Tsunami2

      I am not so sure that their growth spurt is over as such but may just take a totally different direction from where we are now.
      I can see several areas of their economy that have not really advanced like they could.

  • “…”public banking,” the idea that so-called private, quasi-monopolist central banks have not done a good job of managing the currency and that if the “people” controlled these banks, they would do a better job.”
    Of course when they say ‘the people’, they mean government. The demonstrated spying, lying, stealing, cheating, murderous thugs certainly can do a better job. At least for themselves.

  • chuck martel

    “Many, many Chinese have been put in jail, not just out of this group but the previous group as well. Look at the United States where nobody – or if anybody, one or two people – have gone to jail in the past decade despite all the major problems whereas in China, thousands of people have gone to jail. So they certainly are doing a better job than we are in the US and perhaps in the West.”

    Sending thousands of people to jail is “doing a better job”? We all know that the nation/state’s procedures for stripping the freedom of its subjects and incarcerating them is true justice and that more of it is needed. All Americans can breathe easier knowing that Martha Stewart has paid a price for her blood thirsty insider trading.

    ” Cambodia’s a small country, only about 14 million people in the whole country.”

    Yeah, 14 million is a pretty insignificant number, especially when it comes to people. The daily defecations of 14 million people wouldn’t amount to a very big pile, would it?

    “As far as Angola, yes. It’s a great place to be. It’s got great prosperity and lots of money’s going in there. The problem is there’s no stock market.”

    Roger’s version of the free market isn’t the freedom to sell better, cheaper toothbrushes to the Angolans, it’s to write a check to a stock broker and then get a bigger check in the mail. If no check arrives some government body is supposed to jail the broker. It’s not really investing, it’s gambling, no different than betting on a horse race or a poker hand. There’s nothing particularly immoral about that kind of thinking but it can’t be universal. Somebody has to dig the ditches and lay the bricks that produce the wealth that he wants. Discovering the best investment plays in gigantic China or mysterious Angola is realistically beyond even his capabilities, unless he somehow acquires exclusive information, which is corruption.

    • Hugo

      Ehm, it seems to me mr Rogers was reffering to people that were put in jail because they ripped off the investing public and that in the West (mostly the USA) puts people in jail for victimless crimes (like the consumption of drugs). The Martha Stewart’s are rare, see mr Corzine.

      I think mr Rogers only expects a pay check when indeed the toothbrushes are delivered lots cheaper. Then he gets paid. To me that seems fair. Way fairer then making bad loans intentionally and then getting a bonus because you made the taxpayer to bail you out.

      just my 2 cents.

      • Hugo

        btw what seems a fair critisism of mr Rogers is his take on (physical) gold. He never, ever states it is a good buy. He always states that he has some and wont sell but as long as I read his work he never advocates buying,

        Another one is his refusal to disclose why he broke with mr Soros and the dynamics behind their teaming up, profits and so on.

        • Interesting they went in entirely different directions, as two sides of a dialectic. With Soros of course we “get it.” The Queen spoke with him privately after he shorted the pound. A few weeks later he became a socialist activist …

          In any event, Mr. Rogers is an esteemed investor and one we admire. Our feelings regarding Mr. Soros are a good deal more mixed. The dialectic is ever with us, but we hope Mr. Rogers contributes to our pages many more times.

          • Hugo

            Agreed DB, from what I take is a grey cardinal this line came ”’George is not a big player. He is being worked over along with a few others.” (line from 1997).

            If I had to guess…. mr Rogers (and some others like mr Gloom doom and boom) also had a meeting (or 2) telling them where not to go in their advises.

          • Bill Ross

            “òr else”

          • Hugo

            btw, good point about being 2 parts of the dialectic DB!

        • OK, but please note Rogers really has nothing to do with Soros anymore as we undertand and won´t even comment on the man. And Rogers has certainly been correct on a number of his calls iin the past decade, especially gold.

      • chuck martel

        In the US, there’s no profit in jailing the CEO of a big financial firm. Rather than engage in a priori bribery schemes, government regulatory agencies investigate these firms and threaten them with prosecution. Settlements are reached that mean billion dollar forfeitures to the bureaucrats that come out of money that rightfully belongs to the stockholders. Life then goes on. There is no “ripping off of the investing public” in communist China, instead there is punishment for excess cronyism and failure to follow the twisting path of post-Maoist doctrine adopted by a new generation of party apparatchiks. In both China and the US, the powerful must demonstrate that the rules are being followed, but the approach isn’t the same.

        • Hugo

          What I get from your reply is that in the USA people get to send to jail for a profit and that in China people get send to jail because they are cronies. Agreed the approaches are not the same, that is a logical conclusion. Ofcourse with at least 50 shades of grey (smile). If I had to choose, China makes more sense to invest in (not that I do in either).

      • Thanks, Hugo. Rogers´ insights are available without charge and he´s been correct a lot in this past decade. Makiing an observation about a potentially profitable region shouldn´t be a moral issue. Morality has to do with action, not observation.

  • Tsunami2

    Jim talks as though most people buy gold as an investment. This may be true but there are a whole bunch who buy gold and silver as insurance for what we feel is coming.
    With all the debt that is being created daily I cannot see anything good happening in the future and therefore many are falling back on the historic insurance against economic disaster, gold and silver.
    Listening to a precious metals dealer on Saturday who tells about the huge amount of sales going on now and many of those as insurance.

    • Hugo

      ”Jim talks as though most people buy gold as an investment.”

      Agreed, why do so many people talk about gold being an ”investment”. To my knowledge most people that buy gold (physical) see it as savings! Fiat is for spending physical gold is for savings. As far as I understand things will be the biggest reform into money business and castrating Wall street, The city and so on! They wont hold that concept back. All that is needed is the break down of paper gold……

  • Bill Ross

    IMHO, JR has far too much faith in the system. The smart money is `going Galt“

    I canna hold it cap`n, shes going down:


    WSJ`s take on this:


    • He doesn´t have that much faith in the system, which is why we invite him back. He believes quite obviously that prudence involves holding commodities that have tangible value.

  • Central planning by the central planners are our problems!

    How The Democrats Caused The Financial Crisis: Starring Bill Clinton’s HUD Secretary Andrew Cuomo And Barack Obama; With Special Guest Appearances By Bill Clinton And Jimmy Carter


    Barney Frank lies about his role in the housing bubble


  • Cui Bono ?

    China is coming along nicely. Lots of investors running there with their money. Soon it will be ready for harvest.
    Meanwhile, Africa is being prepared….

  • $22686450

    Pardon the pun but I don’t buy his explanations and discourse on gold. It did not have the ring of being the whole truth.

    • Hm-mm, truth or not, he’s been pretty accurate for a decade ….

      • $22686450

        Well I’ve read some pretty damning stuff which suggests that gold is being manipulated down by overselling the paper.
        That the wait if you want the yellow stuff is quite long -ridiculously at times.
        That it benefits both China and US [can’t work out where he got India as the biggest buyer of the yellow, I have it as China by a long ways, unless he’s talking paper gold] to have the price down at the moment. The US benefits because it keeps people in the stock market -until they are ready- and China because before long we’ll be back to currency backed by the real thing and don’t forget their alternate to the IMF through the BRICS own investment bank.

        When gold shoots up to 2 and 3 times its current price [I’ve seen suggestions up to 10x], those who’ve been collecting it are suddenly in the money. In America’s case suddenly the debt hill is halved or quartered which plays well on the fiat currency side. For China it’s obvious they take over as a reserve currency which is backed by the real stuff. Just looking at this years price you can see a monthly pattern.

  • Praetor

    Old Money/New Money. Mr.Rogers and Mr.Soros, did they split.Hmm. Mr. Rogers to Asia, Mr. Soros to the west. You could say they are New Money. The Old Money, Rothschild invest a few million in Soros fund. “O MY”. Rothschild Continuation Holdings (RCH) , 2005, 20% of RCH was sold to Jardine Strategic/Jardine,Matheson & Co. of Hong Kong. 2008, RoboBank acquired 7.5% of RCH, RoboBank and Rothschild entered into a Coop. to advise on Equity Capitol Markets in food and agribusiness sectors. This move helped RCH to gain access to East Asian Markets. Think like a Rothschild, treat the stock market like a cold shower, Quick in, Quick out. 10:30am and 3pm at St. Swithin’s Lane the price of Gold be fixed. I guess the old saying is true, the Golden Rule that is.

    The one thing you can say for the Billionaires of our day is, when they run in the circles of the Trillionaires.They always seem to become, Philanthropists, how interesting. Just saying. “O” the web they weave. Follow the spider web.

    • The action as usual seems to involve Mr. Soros. We hope to enjoy Mr. Rogers insights for a good deal of time to come.

      • Praetor

        Yes, but this maybe the reason for the split. The good and evil. Mr. Rogers a Free Market Capitalist, Mr. Soros Liberal Progressive or who knows, the split. One went east and one west. The old becomes the new and the new becomes the old. Mr Soros from Europe and Mr. Rogers from United States. Old/New money. People come to the DB and always seem to fined fault with whomever you Interview, as Capitalist Pigs who wish to profit from the interview. I gave a possible reason for the split, not, ya this is the reason. If I were Mr. Rogers I would do the same thing. But, you have to think Mr. Rogers may have over heard or was privy to some conversation between Soros and his Lord and Masters the Rothschild Clan that China would be the future push of Capital and a place they could vault up their Gold wealth from the evil western gov’s whom they knew would go POP in the future, our time, now, because the Rothschild clan and their kind ( old money ) know the future because they help make the future. Just a thought.

        Whats wrong with people making MONEY anyway,Jeez.It blows my mind.

        When the DB came back online, Moral Investing,Capitalist, Free Markets to make profits, Yes. Mr. Soros command and control collectivist socialized investing for the purpose of subjugation, No.

  • Praetor

    The billion’s of proletariat have to be fed because we don’t need no zombies (cannibals) round here for they may come for you Mr. Rothschild and yours. Just some humor, or maybe not.

  • “And as for my existing books, I’m a little superstitious: I never ask my publisher how my books are doing because I don’t want to jinx them. So far all my books are still in print so I guess my superstition must work.”

    Even if this is intended as humor, the fact that Jim Rogers thinks about totally irrational superstition (and worse, that it may even work!) hardly gives me confidence in his writings about market economics.

    Perhaps Rogers means that he does not look as how his books are doing since that might negatively affect his happiness (which is somewhat rational because few people have full control over external affects on their emotions). But it so then he should state it that way rather than using terms such as “superstition” and “jinx”.

  • “So I have the feeling that there’s still speculation in the market. What I would hope would happen is what happens to most markets, eventually. Many people just give up and say, “I never want to own that again as long as I live.””

    It is this sort of statement that gives investors a bad name!
    First, it would be irrational for anyone to make such a statement (and actually follow it) and second, hoping that people will be irrational so that one may gain is promoting the view of the market as a zero sum game where there must be losers in order for there to be gainers – whereas all rational and long range thinking trade is to mutual advantage.

    • OK, thanks Paul. But let’s try to focus on the substance on Mr. Rogers’ insights please. He doesn’t get paid for any of this and he doesn’t flog his investment book immoderately as so many do.

      • I am sorry if my comments were taken as disparaging to Jim Rogers, since that was not their intention. I highly appreciate his information (which I am still going through and digesting) and his taking time to provide it, but a couple of remarks really stood out to me as negative for the promotion of truly unfettered exchanges, so I thought it important to point them out. As the decades have gone by I have greatly honed my skills to be able to minutely analyze everything that I read, and not merely accept and gloss over, as so many people do. In effect, I have become a critic of everything that I read, particularly with respect to its overarching philosophical impact.

      • I am specifically not commenting on the direct subject matter of many articles being posted at The Daily Bell because I am not an expert in investing or banking and most certainly not the economic history of the US or any other part of the world. However, I have noted from Anthony Wile himself that he is interested not only in making money by investing but particularly doing so in a highly ethical manner with the long range interest of both himself and the larger society in mind – and this is what has attracted me to continue reading DB, something which I currently do for virtually no other publication. Now it is also clear to me that some of those investors, and other market oriented people whom he interviews, do not have this same ethical perspective, but like most lovers of the market believe that any method of gaining money without using coercion is fully ethical (even in a thoroughly coercive society where many such actions are effectively riding on the coat-tails of such coercively based actions). While I understand that DB cannot reasonably criticize the statements of someone they are interviewing as part of that interview (although, in the comments I certainly can and will continue to do so), I expect that DB will at some time in the future scrutinize the investment ideas, suggestions, hopes and actions of those interviewed from an ethical point of view, even if they do not necessarily name names (although that would not be my way, since it would leave such person’s statements unchallenged and thus, potentially still harmful).

    • Don Duncan

      I did not read into this statement what you did. Mr. Rogers is telling you how a sub set of investors think. He is saying that the gold market is better off without wild fluctuations caused by irrational speculators. With those speculators permanently out we will see a more predictable, stable gold price.
      While wealth creation comes ONLY from mutual advantage trading in the long run, short run distortions allow short run profits. This is not endorsing “zero sum” economics, it is recognizing an incorrect world view. We live in an uncivilized political/economic mixed economy. Most of us here at DB (commentators) abhor the violence so worshiped by the masses who support their police, warfare/welfare state. Seeking profit in this mess is survival, not approval.
      I was taken aback by Jim’s allusion to superstition. I find this troubling. I hope it was a joke. His success is not because of his political connections, but by his rational take on economics. Superstition is irrational.

      • “I did not read into this statement what you did. Mr. Rogers is telling you how a sub set of investors think. He is saying that the gold market is better off without wild fluctuations caused by irrational speculators. With those speculators permanently out we will see a more predictable, stable gold price.”

        I completely agree with that interpretation, and I do hope that is all that Jim Rogers meant to be saying. The same is true for any stock for that matter – its price should be more closely indicative of the long range value of the company, rather than fluctuating by several percent every few days.

        “—short run distortions allow short run profits.”

        This is where we part company (even though you later wrote “it is recognizing an incorrect world view”), mainly because I disagree with your use of the term”profits” here. “Gains” would be a better word, but then those are at the expense of the losing stock market players, not any actual profits as part of company earnings.

        “We live in an uncivilized political/economic mixed economy.”

        That is most surely correct and as I have written elsewhere it makes it extremely difficult for a person like me, wishing to be as ethical as possible, to totally act in that manner. What I want to be able to do is to find companies that are developing or making highly valuable (in my estimation) products and services and then to invest directly in these companies in order to promote their products and services. Instead with the stock market all that I can do is play games with many irrational people who are mostly all out to best me in one way or another, mainly because they think that reality is such that my losing is necessary for their gain.

        Don, I fully agree with the rest of your reply and greatly appreciate you making the entire reply. Yes, for most of my life I have totally avoided any stock investments (partly also since my analysis in the 1970s, I have totally disagreed with the entire idea of incorporation) and instead put my earnings into my own projects (most of which were so far out and unappreciated that they failed to get anywhere). Now in my older age I must be more cautious to look out for my direct personal interest. Therefore, yes, I am seeking stock market gains merely to survive, even though I find the mess abhorrent and would rather be seeking and promoting the earnings/profits increase of companies producing valuable (to me) goods and services.

        Thanks again for your reply. It is so very nice to find a new person with whom I can have a rational, substantive discussion.

  • Fred

    I am very enthusiastic about Mr. Rogers and always want to hear what he says. He is so colorful with his stories that he is just fun to listen to, no matter what he is talking about. It seems to me that his reluctance to make public statements about a previous business partner could be attribute to his having a touch of “Class” . Likewise, with other topics he touches upon, he seems to prefer an even handed approach, at least publicly. That said, it puzzles me a little that (my impression) he does not seem to think markets are particularly manipulated (maybe more public neutrality) and regards ETF gold and physical gold as equally good investments. Although, maybe not, as I have heard him say he owns physical goal but don’t recall his ever saying that he owns ETF gold.

  • Umberto Indicci

    The FED centennial anniversary will soon be here, and there may be a helluva party. How long does an infinite line of credit last, anyway?

    P.S. Love that ticker symbol … lol.

  • “We might be better off without central banks. — In my view, this one’s going to disappear, too, mainly because they keep — making mistakes.”

    Jim appears to keep missing the essence of all coercive based institutions, that each and every one of their actions must necessarily be a “mistake” – be harmful to freedom because they distort exchange choices away from what they would be in a society of full uncoerced liberty.

  • Danny B

    Oh Great Bell, I found a couple more interesting links. This page has an excellent graph of the winners and the losers of ZIRP.


    This article about Bitcoin and China is intriguing. China just had a very portentous financial confab. They may have decided to Get behind Bitcoin rather than pushing the Yuan.