Legendary
global investor and chairman of Singapore-based Rogers Holdings,
Jim Rogers has been talking about his 2012 predictions.

In a nutshell,
he is neither too optimistic about the stock market for 2012 nor
about whatÂ’s going to happen in the world in the next two or
three years.

Speaking to
Australia
Financial News Network (AFNN) December 23, Rogers said: “The
problems are going to continue to get worse until someone solves
the basic underlying problem of too much spending and too much debt.”

He sees the
biggest risk to global growth in 2012 as “too much debt…too
much consumption…and the central bank in the US which keeps printing
money.”

Rogers, seen
as one of the world’s most successful investors, highlighted the
scale of the problem to his host: The problem is that the measures
America needs [to solve the crisis] would cause huge pain for a
while, but, if we donÂ’t take our pain now, and we wait until
the market forces the pain on us, then itÂ’s going to be systemic
collapse.”

Refusing to
get drawn into US politics, Rogers nevertheless provided a tacit
endorsement: “Gary Johnson and Ron Paul seem to understand
the problems that are facing America,” he said.

So what
is his prediction for stock markets in 2012?

“I am
short stocks around the world. IÂ’m short American technology
stocks, IÂ’m short emerging market stocks, and IÂ’m short
European stocks,” Rogers told AFNN.

“IÂ’m
not optimistic for the most part about stock markets. I donÂ’t
own many stocks anywhere in the world. The only offset for the caveat
for me is that there is an election in the US, and in France, so
wherever there are elections coming, and governments spend spend
spend, and throw money out the window to buy votes, so some people
are going to be much better off in 2012,” he added.

Speaking to
the BBC’s
Martin Webber December 26, Rogers reiterated his opposition
to printing money as a solution to too much spending and too much
debt: ” You can debase currency, and history is replete with
governments that have debased their own currency and ruined their
own currency for hundreds of – well for thousands of years.”

“You can
do that and everything is okay for a while, but eventually you have
inflation, you have high interest rates, you have currency turmoil,
you have people no longer trusting each other to invest with each
other, and then you have the end of the system, and we have chaos,
and it starts over again,” he added.

Social unrest,
civil war and…a huge mess

Asked if it
was right that government owned institutions [nationalized banks]
were effectively buying government bonds, the investment guru said:
“It is a recipe for disaster… It’s a Ponzi scheme, it’s a
fraud, it’s a sham and we are all going to have to – we are already
starting to pay for it.”

“Eventually
one of two things has to happen. We have to get together now and
ring-fence the problem and figure out how we are going to survive
and start over. Or, in a year or two or three, the market is going
to say, no more money, we won’t put up any more money. And then
the whole system collapses, then you have gigantic chaos, social
unrest, governments failing, civil war – huge mess,” Rogers
predicted.

It’s not
the euro

Going against
mainstream investment thinking, Rogers denied this was a ‘euro crisis.’

“It’s
not the euro. The world needs the euro or something like it to compete
with the US dollar. We need another sound currency. The eurozone
as a whole is not a big debtor nation. The eurozone has some debtor
problems, some debtor nations, debtor states, but it’s not a big,
big problem. The euro is good for the world. It needs to work,”
he told the BBC.

But is it
a euro crisis?

Rogers, nonetheless
is having “serious questions” on what to do about the
Euro. “It certainly wonÂ’t continue in its current form
in 10 years,” he told AFNN.

Monetary unions
work by automatic transfers from productive regions to less productive
ones. This is true in the US as it is true in every single nation
with regional variations. No single currency has ever survived without
some form of debt ‘mutualization’.

Only Germany can reverse the dynamic of a European decay,”
billionaire investor George Soros wrote in August in Handelsblatt,
the Dusseldorf-based newspaper. “Germany and other countries
with an AAA rating have to approve some sort of Eurobond regime.
Otherwise, the euro will implode.”

The eurozone,
in its current form, is
beyond repair. The euro was an idealistic idea dreamed up by
politicians. The idea was flawed and could not have worked without
swift fiscal and political union. Even Jacques Delors, the architect
of the euro, accepted this fact in a recent interview with the Telegraph.

Bankers
keep their Lamborghinis

Rogers also
expressed limited sympathy for the Occupy Wall Street movement.

“I do
have sympathy with the fact that they are saying, we shouldn’t have
bailed out the banks. I would have let all those banks go bankrupt,
as you’ve heard me say before, but beyond that, I don’t have too
much sympathy with them” he told the BBC’s Webber.

Read
the rest of the article

December
31, 2011

Jim
Rogers has taught finance at Columbia University’s business school
and is a media commentator worldwide. He is the author of Adventure
Capitalist, Investment
Biker, Hot
Commodities, A
Gift to My Children, and A
Bull in China. See his
website.

Copyright
© 2011 Business
Intelligence Middle East

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