Jim Rogers: Serious Economic Crisis Coming; Here's What I'm Doing

November 08, 2016

When Jim Rogers talks, investors listen. One of the world's most famous investors, Rogers is known for his no-nonsense style and investment wisdom. He is the author of several best-selling books, including his latest, "Street Smarts: Adventures on the Road and in the Markets." ETF.com recently spoke with Rogers for his take on the latest financial market developments.

ETF.com: Though there’ve been some ups and downs recently, it's been a great year for gold overall, with prices up 20%. Are you a buyer of gold right now near $1,300/oz?

Jim Rogers: No, I’m not a buyer of gold at all. I expect another opportunity to buy gold. If it doesn't happen, that's fine, I already own plenty of gold. If and when it does go down, I hope to buy a lot more.

ETF.com: Oil doubled off its lows from earlier this year, but it seems to be having trouble breaking above $50 on a sustained basis. What's your outlook for oil, and should we be paying attention to OPEC's attempts to cut production?

Rogers: I don't pay too much attention to OPEC. They talk a lot, but even when they agree on something, somebody is always doing something else under the table. So I don't pay attention to OPEC.

As far as oil, it's is in the process of making a bottom. In two or three years, we're going to look back and say, "Oh, that's what it was doing: It was basing; it was making a bottom."

Whether that base is between $25 and $60 or between $30 and $50, who knows? But it’s in the process of making a bottom.

ETF.com: Two or three years from now, will oil prices be much higher?

Rogers: Perhaps, yes. Since the world will be in chaos with a lot of civil unrest and maybe even military unrest, I suspect that's probably a safe bet. But I'm terrible at market timing and short-term trading, so don't listen to me on something like that.

ETF.com: Where do you see the most risk of unrest in the world right now?

Rogers: Clearly, the Middle East is a powder keg; it can erupt at any time. There are all kinds of people making mistakes there. It's not as though it's just the Arabs and Israelis. A dozen different groups are making mistakes in the Middle East.

History also shows these things usually start where we're not looking, where we don't expect something. Who would’ve thought Sarajevo in 1914 [would lead to World War I]? Nobody knew what Sarajevo was, and the next thing you knew, the world was in chaos.

It's probably going to start in the Middle East, but it could be Asia. It could be anywhere.

ETF.com: After being in the financial news a lot last year and early this year, China hasn't made any waves recently. Do you foresee another shoe dropping in China, or are you comfortable buying Chinese stocks here?

Rogers: I'm not buying shares anywhere at the moment, including in China. I own Chinese shares; I haven't sold any. The world's going to have serious problems in the next couple years, and it's going to affect everybody. The Chinese are a large trading country, and anybody who trades with the outside world is going to suffer. Many Chinese companies now have debt, which was not usual 10 years ago.

Some Chinese companies are going to go bankrupt. Other parts of the Chinese economy are going to boom no matter what. Pollution cleanup in China, for instance; those guys don't care if America falls into the sea; they're too busy making money.

 

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