I won’t say that I hang on his every word but I always pay very close attention to what Jim Rogers has to say.
One of the world’s greatest investors, Rogers is prone to opine about matters political and financial. He does not represent an institution or a party, and he always takes the long view on the world economy.
Recently, he was interviewed in Abu Dhabi. He began by diagnosing the world’s problems in ethical terms. More specifically, he contrasted a culture based on the work ethic with a culture based on entitlements.
On the work ethic, he said:
A lot of the problems we're facing today is that people have forgotten how to work hard. It's a generational thing. If you go to a fast food restaurant or a department store in the United States, you'll see senior citizens working behind the counter or greeting customers," he says. "They're doing it because they have a work ethic. They want to work, and they're doing jobs that young people don't want to do. Young people don't want to work because they will get benefits, can have a baby and not bother to work and that's going to affect the productivity and profitability of businesses. We live in a culture where people are used to support and handouts. And we can't afford to sustain them."
On the entitlement culture:
The problem is that everyone is entitled to a house and a pickup truck but no one wants to pay for it in real money. It's borrowed money. And Greenspan and Bernanke weren't watching the bankers and lenders because they were too busy printing more money.
For the past several years Rogers has been saying that the future lies in agriculture. At times he adds mining to the mix. In either case, in the future as he sees it, people are going to get rich in farming. Amazingly, it suffers from a shortage of human capital.
In his words:
Nobody wants to farm any more. Yet there are more people than even now. Seven billion of us. What are we going to eat? Every year, the US has something like 225,000 graduates in public relations. I think there's 20,000 agriculture graduates in the US now. Have you ever tried to eat a press release?
My advice to young people would be to get into agriculture. If you want to make money over the next 20 years, agriculture is the way to go. If you don't want to be a farmer, buy the Lamborghini dealership or a restaurant in Iowa. Why? Because the farmers in Iowa are going to be very wealthy. And they will be able to afford Lamborghinis. Fewer and fewer people are producing more and more food for more and more of us. That's only going to get worse over the next 20 or 30 years. So if you're smart, put your money into anything related to agriculture.
Politically, Rogers seems to align himself with libertarians. For years he has opposed government bailouts as well as government subsidies and regulation.
"Governments should not be in the business of giving out bailouts, whether it is to banks or car companies. Business entities need to survive on their own two feet. That's half of the reason why the world is in the mess it's in. Take Europe, for example. Its farmers are subsidised. Greece's farmers are under-productive because they don't need to be efficient."
Placing a goodly part of the responsibility on former Fed Chairman Alan Greenspan and on his successor Ben Bernanke, Rogers says that our problems were caused by cheap money.
[Greenspan] caused the stock market bubble and that led to the real estate bubble and the consumer debt bubble. Now those bubbles have burst and what is Ben Bernanke — the current Fed chairman — doing? He's printing more money. Bernanke couldn't get a job as a banker. He's just a printer. That's all he knows how to do. Print money. There isn't enough trees to print all of the money Bernanke wants….
How long will it be before the next crisis hits the world financial system? Rogers replies that we do not have very long to wait.
… when the next blow comes, and it will over the next 18 months, we have nothing left.
Have a nice day!