Tuesday, January 14, 2020

Market Mania: Enjoy It While It Lasts

It’s always good to have the Jim Rogers take on financial markets. Rogers is a legendary investor, so we respect his views. We find his outlook sobering, to say the least. In brief, he told RT that we should enjoy it while it lasts, because when it stops, when the markets come to their senses, there is going to be a very serious reckoning.

The current economic boom, Rogers suggests, is being fueled by central banks printing money. He considers it a species of madness. The reason is, by printing money the central bankers are not allowing the free market to determine interest rates.

So, here is the story:

Central banks around the world will continue printing money as long as it’s necessary, says legendary investor Jim Rogers, calling it “madness.”

He talks to RT’s Boom Bust about the state of the global economy and what could be over the horizon. Never before in world history have interest rates been so low, Rogers says. The US’ central bank, the Fed, increased its balance sheet by over 500 percent in less than a decade. Japan’s central bank prints money and buys ETFs and bonds.

“These are astonishing statements and facts… this is insanity, that’s not how sound economic systems are supposed to work.” According to the trader, in 2008 we had problems because of too much debt.

However, “since then the debt has skyrocketed everywhere and it’s going higher and higher. We are going to have a horrible time when this all comes to an end.”

“Eventually, the market is going to say: ‘We don’t want this, we don’t want to play this game anymore, and we don’t want your garbage paper anymore’,” Rogers explained.

When that happens then central banks will print even more and buy even more assets.“And that’s when we will have very serious problems… We all are going to pay a horrible price someday but in the meantime it’s a lot of fun for a lot of people.”

Considering how little I know about these machinations, I will not offer my own commentary. Except to say that we should pay serious attention to the thoughts of someone like Rogers.


Dan Patterson said...

When have fiat currencies held value over time?
Value subjectivity depends upon the buyer believing the seller's bs. Like the AmWay people making you believe their fanciful tale of riches from soap. Ok, whatever.
When the mood changes all will be lost, that's why many people are prepping for that time.
Best to us all.

UbuMaccabee said...

I agree with Rogers entirely. Buy ammo.

Webutante said...

I like Jim Roger's and think he is ultimately right. However, Jim has been saying this for years (again which does not mean he's wrong) and even moved to Singapore a long time ago to avoid the deluge. He's a perma-bear and still ahead of his time.

Sam L. said...

"In brief, he told RT that we should enjoy it while it lasts, because when it stops, when the markets come to their senses, there is going to be a very serious reckoning."

What is "RT"? What does that designate? What does it mean? Who are they? "Inquiring minds want to know." (I looked at the link. Didn't help me any.)

jay said...

Whatever you do, Sam L., do not ever go there again. Even a lengthy glance may turn you to a pillar of salt. LOL

(Russia Today. In the main = one of the more honest and open news sources out there. No I am not kidding. Of course there are a few topics they cover I would be very skeptical of...but a reasonably savvy viewer can pretty much figure out which ones those might be.)