In an interview in May, and another this month (linked below), Jim Rogers predicts that the next bear market in stocks will be greatly magnified by out-of-control debt and President Trump’s trade wars.
He doesn’t elaborate on the debt issue, but he has a lot to say about trade wars.
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Thank you @Clint Jim Rodgers is / was an old style value investor if memory serves. Nothing wrong with that at all.
However in “his day” we had a thing called “The Business Cycle” and every 4 or 5 years we had a recession. Banks either ran on the “Gold Standard” or “Fractional Reserve Ratio” None of that is now true - We have the phantom PPT keeping Indices moving positive by and large, and Banks issuing fictional “Derivatives” (which caused the last “crunch”).
We have “Interest Rates” at or near zero, which even to me seems untenable. We have zero interest on savings, but huge interest rates on “Personal Borrowings” - so no point in anything other than consumption. Inflation at or near zero.
I think simply from a “Time perspective” his analysis that there will be a global recession shortly is correct.
Your recent posts re:Deutchebank seems to hold water but his wish to adhere to a very critical line with regard to “Quantitive Easing” and “debt” do not neccessarily hold much water under “Modern Monetary Theory” - which goes along a “Keynsian” type argument but without the need to eventually “balance the books” and does seem to have some merit, but it has not as yet been tested under crisis - so we shall see.!
I personally fear a return to “normal” for interest rates as more devastating and so it would appear they will have to stay low - possibly forever !
Whether we regulate the banks properly - I doubt but the natural problem is that if we had anyone capable of doing that properly is at best dubious.
And of course IF it is true that the Euro could eventually turn to “Rodent Chit” again we shall see - but I think we could All well be in deep Doo Doo if it does ! (Yanis Varoufakis’ study on that scenario is worthy of more consideration )
Again - even “said Bank” releasing a lot of equities onto the market at a very high peak, might just in itself trigger a “Panic”.
Yeh. I remember watching good 'ol Jim Rogers back in the day. And when I first say this thread pop up the first thing that popped into my head was “I cannot for the life of me remember if he ever got it right”. I remember his doom and gloom reports and interviews on Bloomberg. All about the USA that was going to all but disappear from the face of the planet and that China was the place to be and that the Euro was going to replace the Dollar as the World’s reserve currency and that Gold was the next best thing and would be better than sliced bread at some stage. Now admittedly I gave up on listening to this stuff eons ago so I’m not quite sure just how on the mark he was if ever.
I do believe in market cycles though. I also agree that this one has gone on far longer than the norm. And I also believe that Alan Greenspan was right when he said that it’s not a question of IF we land up here again but rather WHEN (with reference to the Financial Crisis). I see it again i.e. low interest rates, easier credit, the same old same old. Matter of fact just the other day it was noted that there is a big surge in people that are refinancing their homes at LOWER interest rates. You think they’re going to continue paying the higher installments to knock a few years off or save the difference??? Not gonna happen. And so on and so forth. But whatever the case and if there is one thing you can be sure of: I’ll not be long the markets THIS time around when they tank. Gotten a little bit cleverer and wiser since then!!! LOL!!!
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Long term predictions are like predicting the weather - the longer down the road the more it is hit and miss.
Jim Rogers has been pro Chinese a long time - maybe that is colouring his judgement.
Commodities took a shake out after 2008 - the CRB fell from c. 480 to 200 as the credit bubble bust (not a price bubble)
Jim made a prediction in May 2011 with CNBC
He believes the current correction in commodities is a short-term blip in their upward run. That may have years to continue, just as the 1987 crash was a brief respite in a decade-long bull run for stocks.
Like i say, predicting can be hit and miss on the long term - the CRB 10 yrs later:
Edit: the highlighted date on the chart is around the time of the interview.
All this crash ahead forecasting stuff is just for media attention and page-filling. Or clicks I suppose it would be called now.
It reminds me of Schrodinger’s cat (another pointless exercise in avoiding the issue designed for over-educated wasters). Jim Rogers will definitely be right one day but every day until then he’s wrong because there wasn’t a crash: except that if there isn’t a crash tomorrow, that doesn’t prove he’s wrong: so he’s right tomorrow.
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It just occurred to me in the wee hours that I had some of my facts mixed up in my earlier post. Mark Faber is the one famous for the ACTUAL Doom and Gloom Report. Frighteningly I seem to remember him saying pretty much the same things at least when it came to China. Who knows. Maybe their time horizons are WAY further into the future than us mere mortals. Maybe they have the money to hold out when they’re wrong.
One or two have got it RIGHT though but based on research and actual information as opposed to opinion rooted in fundamentals and maybe therein lies a lesson. George Soros (as we all know) although his story in my opinion was more one of being in the right place at the right time. The other largely forgotten or at least not as well known but who has my vote was John Paulson.
the business cycles exist today as they existed in the past
banks still run on fractional reserve ratios
the term PPT doesnt exit (could you please explain what you meant with PPT, or was it a spelling mistake?)
we have almost no interest on personal borrowings
todays money theories do no longer have much in common with keynesian theories, in fact it goes strictly against keynesian tactis. keynesian money theories have been abandondened in the 1970ies with the gold standard
it has been tested under several crysises, the last in japan
no need to even talk about the euro here but hey, i have spare time. the eurozone is by far (4 times more than USA and 12 times more than china) the entity with the biggest FDI in the world. this goes for outflawing FDI not inflowing. the two countries with the biggest inflow of FDI are china and USA. now to explain you the differenciation of in and outflow FDI, if FDI is outflowing it means that companies, land, buildings are being purchased, if its inflowing it means companies, land buildings are being sold. to make the storry short, the eurozone countries and companies are the biggest asset holders in the world, owning 2 times more companies outside of the eu than in the EU, which makes the eurozone companies the biggest (as i already mention by far) owners of other companies, real estate and buildings in the world which basicly means, if the euro is fucked- then everyone is fucked. which is probably also the reason why the European Union, even in the biggest crises since 2008 has always been rated AAA by all rating agencies, while USA lost its tripple A rating for quite some time from 2011 till 2013, and the UK has an AA rating (2 stages down the latter of EU and USA).
“said bank” released all the equities it was holding for almost 100 years in the 1990ies after germany issued a law which made it possible for deutsche bank (and other german banks) to sell equities it held of other companies tax free. deutsche hods no equities today. before that law german banks were owning almost 60% of the enite german economy by themselves alone
yes, usually it is.
but i have strong indications, based on data of the st. louis federal reserve, which clearly predicts crashes very periodically (the data, not the St.L federal reserve), as it is in confirmation with the business cycle theories- that indicate a crash this or early next year.
here it is, ill share.
this is the all commercial banks of america, all loans given out to any company and consumer - in america (USA)
if you notice the increase of loans since january of 2018 DID NOT create a significant increase in asset valuations in the same period. (talking stocks, bonds and housing market here).
this was exactly the same case in
2008
2001
1997
1994
etc.
once loans do not stimuly economic growth, we are at the very end of the business cycle.
this cycle has ended. it only takes a few more months for people to realize it. once they do, they will scream crash. After a significant trigger of course.
it has nothing to do with trump or trade wars. those are just the easily visible “reasons”. the reason is simply, the never ending up and down of mankind.
we are up now, its natural we go down sooner or later, before we go up again.
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This is on a much much closer and more immediate time horizon and I don’t know if anybody else has noticed but the DAX and Euro Stocks 50 have both been drifting lower in a straight line for the last seven trading days. As somebody who usually trades the whole lot of them it’s not a divergence I’ve seen very often. Not like this anyway i.e. the US has been on a straight up tear while this has been going on. Dunno if it’s significant.
This is good stuff, many thanks for the post. I can well accept we may crash later this year. But that’s been my position every year since I bought my first shares.
None of these guys predicting crashes ever offer constructive and urgent action by the private retail investor/trader. All they seem to say is there could be a crash soon, so keep an eye on your investments. To my mind, anyone who isn’t doing this already is a fool with more money than he should be entrusted with. So what they’re really saying to their audience is I’m smart, you’re all chumps. I don’t care for that.
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Unfortunately it is significant.
The dax is made up of mostly institutional investors while american indices have much more private and retail investors in comparison.
You can argue there is more smart money in the dax than in the dow. Dow noting new highs while the dax hasnt climbed its previous year high - has quite some meaning.
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Well I’m usually and normally either long 'em all or short 'em all but that’s because always my core trading system is firing off the same signals for them. As of right now though: if I wasn’t the pro. that I am (LOL!!!) I’d be long the DAX but am already short the S&P and the DOW and that doesn’t fit with my brain.
So at a guess I’d say this is going to happen:
Will start getting signals to short the DAX at some point and will already be short the US. And, well, watch out below maybe??? Either that or the US is going to shoot to the moon and the DAX will make an all time high. Suits me. Just as long as the latter is not in a straight line!!! LOL!!!
Mind you. I see the DAX is getting a bit of a halfhearted bid today. And it doesn’t really have THAT far to go to a double top and all time high.
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By the way: you watching Corn??? That double top seems to be in the coming.
(By the way: apologies for the last two posts on mine on this thread i.e. off topic but only realized afterward as I thought I was posting on @MrDE’s thread).
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Si senior im long on corn since 430 on my main account. Planing to hold till end of august if it doesnt turn around and gives me reasons to close the deal. But so far it looks very good, 5% (unleveraged in the asset) in +/-a week isnt bad at all.
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yes it is hard to offer anything to retailers.
but i must say i respect those “star investors” who have the balls to say when they think theres a crash comming. simply because they act against the odds. the odds for predicting a crash are way lower than the odds for just contiung going up, in the stock markets. a star investor giving in his reputation to warn of a crash is risking quite some of his customers and goes against his own nature in this way.
you also must differenciate between the nature of stars, some will talk the indices up, some will talk them down, all in accordance to on which side they are.
nobody wants to see his assets lose value when he is net long, so in any event they will talk the market psychology up, on the other hand, any investor with cash at hand an no significant positions will talk the market down, in order to find cheap opportunities to go long.
so its quite impossible to trust them even a slightest bit without knowing at which side of the market they stand, net short, net long or cash at hand.
then there are guys like warren buffet, who will warn for a crah or major disruptions and give out ideas/tips to governments and central banks what should be done. he in fact is only doing this to push one of his own assets he has interest in, to change laws or conditions for his own benefit. those tips are never some sort of “here i am helping the poor investors to save their money, look how nice i am” those tips suite only for them to put water on their own mill in first place.
you can see this “rigged” talks very easily in the ratings of banks.
if banks say “thiss asset is overweight” it means it will outperform
“positive” means it will go nowhere at all
“neutral” means it will lose in value rather quickly
and
“sell” means the company is about to collapse.
a neutral rating is the same meaning as “this company sux donkey balls”, but nobody will say it that directly.
here is an example of what i mean (and now you can read for yourself since you know what “sell” means):
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What are sorry sap retail investors to do to prepare for said crash?
Have cash at hand
Forgive my friend @MrDE for his crass attempt at humor.
Well it’s pretty simple actually:
Any half decent trading system or methodology will for sure inform you when to be short the market. And crashes are not the worst thing that can happen to a TRADER (INVESTOR is another story all together of course). Markets fall much faster and harder than they go up (albeit that they usually fall for far shorter periods of time).
Oh but wait: of course I talk about Equities. FOREX??? Who the hell knows. I SUPPOSE one could assume that in the event of a STOCK market crash that pairs like the JPY pairs will tank as well. But I doubt that’s a hard and fast rule. I actually don’t know. And honestly couldn’t care either.
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I was serious 
In a crash the weak hands lose out first and most.
Weak hands? Those are people holding assets on margin. Loan. Credit. People who have no cash at hand.
Once the crisus settles the banks are not quick enough to give out easily loans for people to buy stocks. When a crash is at its peak, the people with cash at hand are the kings.
Buy whats good and hold to it. Within 2 years you can make up to 400% gain. Once that gain is there you can, with the stocks you hold, run to a bank get a loan and buy more stocks. Within 5 yeears you can make easily 1000-2000% if you know how to. And that without any leverage in first 2 years and on a leverage of 1:5 from year 2 to 5
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