"Go to the ant, O sluggard; consider her ways, and be wise. Without having any chief, officer, or ruler, she prepares her bread in summer and gathers her food in harvest."-- Proverbs 6:6-8
Legendary investor Jim Rogers sat down with Business Insider CEO Henry Blodget on this week's episode of "The Bottom Line." Rogers predicts a market crash in the next few years, one that he says will rival anything he has seen in his lifetime. Following is a transcript of the video.Blodget: One of the things I’ve always admired about you as an investor is that you don’t talk about what should be. You figure out what is going to be and then you do that. So what is going to be with respect to the stock market? What’s going to happen?Rogers: I learned very early in my investing careers: I better not invest in what I want. I better invest in what’s happening in the world. Otherwise I’ll be broke — dead broke. Well, what’s going to happen is it’s going to continue. Some stocks in America are turning into a bubble. The bubble’s gonna come. Then it’s going to collapse, and you should be very worried. But, Henry, this is good for you. Because someone has to report it. So you have job security. You’re a lucky soul.Blodget: Well, yeah, TV ratings do seem to go up during crashes, but then they completely disappear when everyone is obliterated, so no one is hoping for that. So when is this going to happen?Rogers: Later this year or next.Blodget: Later this year or next?Rogers: Yeah, yeah, yeah. Write it down.Blodget: And what will trigger it?Rogers: Well, it’s interesting because these things always start where we’re not looking. In 2007, Iceland went broke. People said, ‘Iceland? Is that a country? They have a market?’ And then Ireland went broke. And then Bear Stearns went broke. And Lehman Brothers went broke. They spiral like that. Always happens where we’re not looking.I don’t know. It could be an American pension plan that goes broke, and many of them are broke, as you know. It could be some country we’re not watching. It could be all sorts of things. It could be war — unlikely to be war, but it’s going to be something. When you’re watching Business Insider and you see, "That’s so interesting. I didn’t know that company could go broke." It goes broke. Send me an email, and then I’ll start watching.Blodget: And how big a crash could we be looking at?Rogers: It’s going to be the worst in your lifetime.Blodget: I’ve had some pretty big ones in my lifetime.Rogers: It’s going to be the biggest in my lifetime, and I’m older than you. No, it’s going to be serious stuff.We’ve had financial problems in America — let’s use America — every four to seven years, since the beginning of the republic. Well, it’s been over eight since the last one.This is the longest or second-longest in recorded history, so it’s coming. And the next time it comes — you know, in 2008, we had a problem because of debt. Henry, the debt now — that debt is nothing compared to what’s happening now.In 2008, the Chinese had a lot of money saved for a rainy day. It started raining. They started spending the money. Now even the Chinese have debt, and the debt is much higher. The federal reserves, the central bank in America, the balance sheet is up over five times since 2008.It’s going to be the worst in your lifetime — my lifetime too. Be worried.Blodget: I am worried.Rogers: Good. Good.Blodget: Can anybody rescue us?Rogers: They will try. What’s going to happen is they’re going to raise interest rates some more. Then when things start going really bad, people are going to call and say, "You must save me. It’s Western civilization. It’s going to collapse." And the Fed, who is made up of bureaucrats and politicians, will say, "Well, we better do something." And they’ll try, but it won’t work. It’ll cause some rallies, but it won’t work this time.Blodget: And we are in a situation where Western civilization already seems to be possibly collapsing, even with the market going up all the time. Often when you do have a financial calamity, you get huge turmoil in the political system. What happens politically if that happens?Rogers: Well, that’s why I moved to Asia. My children speak Mandarin because of what’s coming.You’re going to see governments fail. You’re going to see countries fail, this time around. Iceland failed last time. Other countries fail. You’re going to see more of that.You’re going to see parties disappear. You’re going to see institutions that have been around for a long time -- Lehman Brothers had been around over 150 years. Gone. Not even a memory for most people. You’re going to see a lot more of that next around, whether it’s museums or hospitals or universities or financial firms.
I have been told this tale before, however there are some differences this year as opposed to the 2015, 2016 doomsday predictions. The housing market had rolled over, it started in Canada and many high end US cities. The auto industry's is finally getting what it deserves. And income is stagnant, people are being taxed to death. I feel it is farther away the this summer, the fed still has cards up its sleeve's like negative intrest rates and more QE not that it ever stopped since there buying the crap out of securities. Im hedging with my money (literally) that i have 2 more yrs to get things in order and paid off. If it happens next week then ill make the best of it.Illinois going bankrupt is a big issue. Just like the teamsters union and the Texas police union that cut pensions. It shines a light on an ugly scene that goes back to social security an unfunded liabilities. I allready pulled my retirment, why make 1% and pay someone 4%.Anywho Happy early Fathers day to the Dads out there an God Bless.
Illinois going bankrupt is a big issue.
I believe Starlady has got it right. "It'will happen when.....and when the Good Lord allows it." I have read the end of the book.The first thing you have to understand is Babylon is the US, specifically NY. Please read the King James version Revelation chapter 17 and 18. The bible says it will happen and I believe it will happen just like the book says.SoWhat to do about it ? All my prep planning are for this happening just like it says. There will be a remnant. What will you WHEN ? What will you leave for a remnant ?
ChristianJ, I wish you success with your group. The land looks good and mostly level. I'm not a fan of communal property. Working on something you have no actual ownership tends of grate on people. I guess it's because I worked so hard for my stuff and I'm kind of attached to it. Maybe that's not a good thing. Also, I'm old and I can't work like a young man. I guess if I was younger and had very little, the opportunity would be more attractive. That hardest challenge you will face will be managing the group and keeping them focused. Outside forces will always be trying to pull them away.
