INTERNATIONAL. Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers expects a rough ride ahead for the economy and sees the US as a bigger problem than Europe right now. "You have to own real things if you're going to survive," he says.
Rogers has been doing his pre-Christmas rounds this week talking to various business media in the US about his investment strategy, commodities, precious metals, the state of the economy, Europe, QE and his distrust of the Fed among other topics.
Speaking to Maria Bartiromo on CNBC's Mapping the Market on Wednesday, Rogers reiterated his view on the state of the economy: In 2002 we had a problem, 2008 was worst - debt was higher - in 2013, or whenever the next one is, it will be worse because the debt is going through the roof, he said.
"It's going to get worse and worse...we're shooting our bullets, we're wasting money," Rogers added.
The legendary investor argued that while Europe was facing problems with individual countries, "they are solvent." The EU as a whole is not a big debtor nation unlike the US which is the largest debtor nation, he said.
In his usual 'straight to the point' style, Rogers told CNBC: "Eventually people will say, wait a minute, we're back where we were, things are worse than they were before.
"The problem of too much debt is not solved by more debt. This is ludicrous."
So what is his investment strategy in such an environment?
"I'm not doing anything at the moment, I'm sitting and watching," Rogers told Bartiromo. I'm short technology stocks in the US, emerging markets and European stocks and long commodities, Rogers said,
He also owns currencies including the Japanese Yen, the Swiss Franc, the Dollar and some Euros. Rogers, who often called the US dollar a "total disaster in the long term", explained that the US currency was now "beaten down a lot and, as turmoil occurs around the world, some people will flee to the dollar," before stressing that he doesn't really think the dollar is a safe haven.
As far as the euro is concerned, " They're [the Europeans] going to make us feel better for a while [reference to the December 9 EU summit], so the euro will rally, but be very careful," he warns.
"It's not solving the problem, no country has announced we're going to have less debt in a year or two or three." All are going to have higher debt, the problem is getting worse, he stressed.
"And when things don't get better, they're going to print a lot more money. When they print money, you have to own silver, you have to own rice, you have to own real things if you're going to survive," Rogers argued.
Asked if Gold would break US$2,000 in 2011, he said it might, but he doubted it. "Gold has been up 11 years in a row and that's very unusual for any asset class," he explained, before adding that it would not surprise him if gold didn't continue to consolidate for a while.
I hope it continues to consolidate and I hope it goes down so I can buy more, he said. "I want to buy more," Rogers noted.
Gold prices fell back today to this week's low of US$1,705 per ounce today lunchtime in London. US investors saw the gold price open New York trade 2.1% lower from last Friday's finish of US$1,745 per ounce.
"Gold prices are still holding fairly well supported," reckons VTB Capital's Andrey Kryuchenkov in a note, "and any negative reaction to the [European] summit today would only see limited losses in gold as opposed to other...more volatile precious metals, also suffering from growth concerns.
"On the downside [however] a break below US$1,700 would see losses to our key support at US$1,680 and the longer term January uptrend," according to Krychenkov.
QE3 in drag
In an interview with Yahoo Finance’s “Breakout” Tuesday, Rogers argued that the Fed was not telling the truth about quantitative easing.
”The Fed is “lying to us,” he stated, “One reason the markets are holding up so well is that they are printing money as fast as they can.”
Although not officially recognized, "there is QE3, the Fed is pumping money into the system," says Rogers, disputing most Fed statements over the last six months.
He argued that the Fed’s artificially low interest rates are really “something akin to QE3 in drag."
"What the Federal Reserve is doing now is ruining an entire class of investors," Rogers argued.
Prepare yourself for much higher inflation
In an interview with Newsmax.TV Tuesday, Rogers continued with the distrust theme, this time disputing the US government's unemployment and inflation rates.
"The government lies about the numbers that they put out. Don't take your advice from any government, or you are going to go bankrupt," Rogers told Newsmax.TV.
US unemployment sank to a 32-month low of 8.6% in November, it was announced last Friday. Official figures showed the jobless rate fell sharply from 9.0% in the previous month, as the economy created 120,000 new jobs.
But while the Labor Department's report was one of the strongest since the global economic crisis began in 2008, it was not uniformly positive.
Economists pointed to a worryingly sharp drop in the number of people looking for work -- which helped push down the unemployment rate. That could mean more jobseekers are being defeated by the relentless slog of finding a new position since the Great Recession and dropping out of the hunt all together. And the net creation of 120,000 jobs was not as strong as expected, as government job cuts continued to eat into private sector gains. The net gain was below the average 131,000 of the past 12 months.
Inflation rates are also misleading, Rogers said. "The government lies about that also," he added.
"Anybody who buys, who goes shopping knows that prices are going up. Buy food, education, insurance, just about everything that we buy, prices are going higher and the government tells us there's no inflation," Rogers says.
"Some independent measures say it's over 6% already ... it's going to go much higher because they keep printing money, and as long as they keep printing money, it's going to get worse. So prepare yourself for much higher inflation," Rogers said.
Can politicians save the day? Don't bet on it!
"As far as I am concerned, a pox on both of their houses. Mr. Bush did the same thing. The debt skyrocketed under Clinton. The debt skyrocketed even more under Bush. Debts under Mr. Obama, they've gotten worse and worse and worse. The Republicans talk a very good game right now and I hope that they are right when they say we are not going to let spending go higher. I hope that they are right about it," Rogers told newsMax.
Speaking in an interview with TheStreet Wednesday, Rogers reiterated his distrust of the Federal Reserve, saying that it is already printing more money. "They have already started printing money again. And they are printing a lot and they don't seem to understand economics or finance or currencies or much of anything else except printing money."
"I would say the single biggest risk to the US economy in 2012 is the US central bank," he told TheStreet.
Rogers, who predicted the start of the global commodities rally in 1999, said he was bullish on commodities and precious metals.
Innocent until proven guilty
Asked by CNBC to comment on the collapse of MF Global Holding, Rogers said: "The first thing you learn in commodities is segregated accounts are sacrosanct, no matter what. That's the last thing you're supposed to touch.
Jon Corzine told US lawmakers Tuesday he "never intended" to break rules and had no clue what happened to hundreds of millions of dollars in missing customer money.
"I don't see how [Corzine] can avoid jail, although you are innocent until proven guilty in America, but that's very bad for all of us," Rogers told Bartiromo.
About Jim Rogers
Jim Rogers has spent a career being one step ahead of mainstream investment thinking. Amongst his many accomplishments, Rogers was co-founder with George Soros of Quantum Fund. During his ten years with the fund, the portfolio gained more than 4,000%, while the S&P rose less than 50%.
Rogers retired from Quantum in 1980 and became a guest professor of finance at Columbia University Graduate School of Business and in 1989 and 1990, the moderator of The Dreyfus Roundtable, The Profit Motive with Jim Rogers, and a media commentator worldwide.
But ask Jim Rogers about his most important venture and he will answer without hesitation: fatherhood.
A Gift to My Children: A Father's Lessons for Life and Investing (RandomHouse, 85 pages, US$16) is Jim Rogers' love letter to his daughters, Happy and Baby Bee. Reminiscent of The Autobiography of Benjamin Franklin, which was also written by a father to his child, Rogers' book is full of no-nonsense, unsentimental fatherly advice.
Among Jim Rogers' best advice:
-- Conduct your own research and trust your own judgment.
-- Focus on what you yourself love.
-- Be persistent.
-- Broaden your horizons and see as much of the world as you can.
-- The most important thing you can learn is how to think and question
everything you hear.
-- Study and learn from history.
-- Master more than one language - and make sure one of them is Mandarin.
-- Don't panic.
-- Take care of yourself and don't neglect the sunscreen.
-- Remember that boys need girls more than girls need boys.
Underscoring his convictions that future prosperity will come from China, Rogers' two young children speak Mandarin.