Sunday, December 13, 2009

Jim Rogger Interview.

Q: Why do you think that we are going to have a short-term rally in the dollar? What’s behind this thinking?
A: Everybody is pessimistic, I am pessimistic too and that’s why there might be a rally.
Q: Long-term you used to worry about deficit, you are still worried about the debt that this country has?
A: Gigantic spending in Washington, incompetence in Washington where they don’t know what’s going on, they are making our situation worse. I see nothing to turn the dollar around.
Q: What you mean incompetence in Washington? Where is the most incompetence? What would you like to see done differently?
A: The Federal Reserve has tripled its balance sheet full of garbage, which you and I are going to have to pay for. They have gone out and printed gigantic amounts of money, why do we want the Fed they are making the situation disastrous for all of us.
Q: I guess you don't think that Bernanke should be reconfirmed?
A: Hopefully. Of course not.

Q: What about Tim Geithner? Treasury as well has been putting out this entire stimulus and now the troubled asset relief program (TARP) programme?
A: Mr Geithner is a smart person from what I understand but he has been wrong about everything for the last 15 years. Why are we listening to him? Why are we listening to any of those guys? They are making our situation worse. They said in writing yesterday that the solution is to spend more money, that’s what got us into the problem, too much debt too much consumption and now we are going to solve it with more debt and more consumption? That’s like telling
Tiger Woods, you got another girlfriend then you solve your problem.
Q: The one way we got into this— all this debt and leverage– the President Obama said the other day – we have to spend our way out of a recession. He said it?
A: It’s making the situation worse for us. We are all going to pay the price for this in one-two or three years. The next time we have problems in the economy, which will not be too long, we don’t have any bullets left, we have shot everything we have. What are they going to do? Quadruple the debt, print more money. We don’t have any trees left.

Q: What are the major implications? I want to ask you about Dubai, I want to as you about Greece as well as Spain. Are you worried? Tell me how this manifest itself that we are going to see?
A: We are going to have more currency turmoil and crises. You already see Vietnam devalued last week, Brazil put on special taxes for currencies, you are seeing what is happening in Dubai, Greece is in trouble, Ukraine, Argentina, Spain, there are plenty of people we can put to the list. We are going to have currency turmoil, we are going to have more debt problems. In the meantime, everybody has printed money and then what are they going to do when the problem start giving us great turmoil.
Q: The sovereign debt fears are growing; the S&P put Spain on debt negative watch, Fitch cut trading on Greek sovereign debt. Yesterday David Paterson in New York – just a press conference called – saving New York from insolvency?
A: They put the US, UK on debt watch; we are all in serious trouble. I mean in Asia there are still creditors, in the West unfortunately debtors.
Q: So do you invest in an environment where all of this gloom and doom and these headlines keep coming out?
A: I own gold as you know. But I am not buying gold. Gold shot up and whenever something shoots up it probably would go down for a while. So if gold goes down I hope I am smart enough to buy some more, other commodities are probably better like silver, agriculture. So I urge you to learn about foreign currencies as well, because there are going to be great opportunities.
Q: I am going to go through some of these investment ideas with you one by one. So let me first focus on gold. You are saying you own gold, you are not going to buy more gold right now because of the level that it is but you are not going to sell it is basically the point?
A: If gold goes to USD 1000 per ounce, I am smart enough to buy more.
Q: So do you think the fact that the Indian central bank, Mauritius — we are seeing different buyers recently. Does that change the gold story? What is behind this move or is it just the dollar hedge?

A: Until last year central banks around the world were selling gold. New you have the opposite; they stopped selling and they are starting to buy as well. That’s a huge shift in the gold market and many other people are worried about paper money as well. So I think gold will certainly go to couple of thousand dollars an ounce over the next decade. That’s not a very radical assumption only 4-5-6% a year, it would have to go up. So I am sure gold will be a great investment over the next decade.
Q: Do you own any stocks?
A: The US markets are up 70% in the last 8-10 months and I don’t like to buy anything like that. I am skeptical of the economy going forward. If the world economy gets better commodities are going to be a great place because there are shortages developing. If the world economy doesn’t get better they’re going to be printing a lot more money, so commodities and real assets are the place to be.

Q: Do you see a bubble in some emerging markets, you are living in Singapore, you are travelling all around, you have seen the Asia growth story on the ground and it is really alive. But people say much money has moved in to these emerging markets and it’s a bubble what do you think?
A: I sold all of my emerging markets two years ago except China. They went down, they’ve come back up, its not a bubble yet. The Chinese economy is one tenth the size of Europe and Asia. There will be bubbles in China and Brazil but now at the moment.
Q: Where do you think is the most important place to avoid right now, is it the stock market?
A: I would say it’s the bond market, the long term government bond market. Would you lend money to the US government for 30 years at 4-5% in US dollars? Who would?
Q: So you think the US bond market is a bubble?
A: Not yet. But its going to be and that is the next bubble that I see forming in the world because they are down and driving up as fast as they can and they are buying on themselves and that is not good for anyone.
Q: Are you more worried about inflation or deflation?
A: Inflation. Throughout history when people have printed huge amounts of money its led to rising prices. Also, in the commodities market we have shortages developed. Food is the lowest inventory in decades. You cannot get loans to open mines, we are having great shortages developing in commodities. Shortages combined with printing money will lead to more inflation.
Q: A lot of people feel that the biggest risk for the stock market in the US is the Fed coming in? When would expect Bernanke and company to raise rates?
A: The markets would raise rate before Mr Bernanke, he is not smart enough, he will follow the market. Just watch the currency markets you will see the rates start to go higher. We will start seeing turmoil in the currency markets and then rate would go higher on their own.
Q: You think that is a 2010 affair?
A: I know we are going to have the currency problems in 2010, we are certainly going to have atleast the semi-crisis. But its already starting as we said with Vietnam and all other countries. We are going to have serious problems in many countries and in currencies.
Q: What are the implications that our viewers will feel or will see of some of these debt worries?
A: If I am right you are going to see the dollar rally, which will be a good chance for some to buy some of the currency ETF or buy some commodities, they maybe better opportunities. If we start having turmoil, which I expect the dollar is going to rally for a while because everyone will have to cover their shorts and the dollar will go up and you can put your money into other foreign currencies.
Q: One thing we didn’t mention was Europe, the US and Britain untouched, Britain is trying to keep their AAA Credit rating what you think about Europe?
A: The UK is not going to keep its AAA rating. They are already worried about the US and certainly should be worried about the UK, the Prime Minister there has been rolling things. Its going to be a very bad situation, I use to own sterling for about 30-40 years but I own no sterling now, it grieves me to see what is happening in the UK.


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