Rogers spoke with Business Insider to discuss commodities, the global economy, his legendary career, and his life in Singapore.
What follows is the complete transcript of our interview with Jim Rogers.
Inflation, Commodities and the Consumer
What is feeding into oil prices at the moment?
Iran obviously, is one thing, but another is in the U.S. it’s the infrastructure problem. We have oil but it’s in the wrong places. On the east coast, they use imported oil, and imported oil is higher because of Iran. And it comes from Europe. North Sea production is in decline. There are supply-demand reasons that oil prices are high in many parts of the world. And known reserves of oil are in decline worldwide. And the IEA is going around telling people that known reserves are in a steady decline and we’re going to have a huge problem in a decade or two, a gigantic problem, unless somebody finds a lot of oil very quickly. So underneath the supply-demand, shorter term it’s infrastructure and Iran probably.
At what level do you think oil prices will break the back of the American recovery?
We are going to have a slowdown. Such is the staggering debt that America has, it has caused more and more of a drag on our economy. I would also point out to you that every four to six years we’ve had an economic slowdown in the U.S., since the beginning of time, so by 2012, 2013, 2014, we are well overdue for an economic slowdown for whatever reason. Whether it’s caused by high oil or what, we’re going to have a slowdown in the foreseeable future.
How do you see oil prices impacting consumers in emerging markets, especially in Asia, when many of them are struggling to rein in inflation and drive growth?
Everybody is paying higher prices for oil and that obviously impacts consumption everywhere and its not just oil, its food and everything else that’s going up. There’s inflation everywhere, the U.S. lies about it, I mean the U.S. government lies about inflation but there’s inflation everywhere. I mean I don’t know if you go shopping, but if you do, you know prices are up. The government says they’re not, I don’t know where they shop. Everybody else’s prices are up.
If you could own / invest in just one commodity which would it be?
I guess it would have to be one of the agricultural commodities, it would depend on which is down the most but it would be agriculture I can tell you that.
You said earlier this year that if gold moved towards $1,600 you would be interested in buying more. Are you looking at gold now?
I’m certainly watching, if it goes below $1,600 I’m sure I’ll buy more. If it goes to $1,200 I hope I’m smart enough to buy a lot more. Gold has been up 11 years in a row now, which is extremely unusual for any asset. So it would not surprise me if gold doesn’t … continue to have a nice correction in 2012. If it does, if it does, I hope I’m smart enough to buy a lot more. I’m not selling. I’m not selling. I have not sold and will not sell until the bubble comes. There will be a bubble in gold some day but that’s ten years, I don’t know, several years from now. I hope I’m smart enough to sell when the bubble comes.
China and the emerging markets
You’re a China bull. Could you tell me the one thing that you think China bears have got wrong?
Not quite sure. If you mean the people who say China is going to explode. Those guys have been saying that for three years. I guess someday they’ll be right. So far they’ve been dead wrong, for years. There will be setbacks in China along the way. In America in the19th century we had 15 depressions with a capital “D,” we had no human rights, we had not much rule of law, (and we) had a horrible civil war, yet we became the most successful country in the 20th century.
China is going to have plenty of setbacks but what these guys are mainly missing is China has been in decline for three or four hundred years but started turning it around in 1978. And there’s a long history of entrepreneurship, capitalism, they have the brains, they have the know-how, there are many overseas Chinese who will bring back money and management ability. And the Chinese have a very, very high savings rate. They save over 35 percent of their income and so even if they start going off, they’ve got something to fall back on, as opposed to America and the rest of the world.
There was a housing bubble in urban, coastal real estate, which the government has popped purposely, I mean they knew what they were doing. But as far as, I mean Jim Chanos, says it’s going to be a thousand times worse than Dubai. Well that shows he doesn’t understand Dubai, and he doesn’t understand China. Now I’ve told him this to his face though, so I’m not talking behind his back. China is vastly different from Dubai, vastly.
Could you explain how Dubai and China’s real estate property problems differ?
Dubai was building its plan, its economic plan was to build an economy based on real estate speculation. It didn’t have anything else. It didn’t have oil, natural resources, it had a small population etc. and there was gigantic real estate speculation in construction. China has huge amounts of stuff. It has a growing population. It has vast natural resources, not enough, but it’s got some. And then all those natural resources in Siberia which they can tap and they’ve got huge financial reserves. Dubai does not. Dubai has a rich big brother, but that’s all Dubai has and China has it all – resources, cheap labor, discipline, educated labor and vast markets.
China lowered their growth rate, wage inflation is worrying and it’s the year of leadership change. Do you think China is in control in terms of their property prices and economic growth…
I doubt the government planned to have a bubble. They got a bubble. I mean they’ve been trying to cool it off and they’ve done so. As far as the lower growth rates, I don’t pay attention to government growth figures because they’re all phony. Nobody knows how much China is growing, including China. I don’t pay attention to all of these figures. They’re not important to me. They’re irrelevant. China is certainly doing better than most countries and it will continue to do so. It will have setbacks. There’s nothing that says China should not have a recession. But China has a lot of money saved for a rainy day and when it rains they’re going to spend. America doesn’t have any money saved for a rainy day. And when it rains we’re going to try to borrow it or print it,neither of which is good for America or for the world.
You have said previously that India is a great place to travel but not a great place for investors. What is the one thing that you do think makes a good investment opportunity in India?
Tourism. Tourism in India, partly because the Chinese can now travel and are traveling, and they’re very close and India is cheap. Indian tourism is going to be a wonderful, wonderful growth area in the next decade, or two, or three.
You have previously said those that invest in Myanmar could be rich in the next 20 – 40 years. Myanmar is beginning its process of reforms and is beginning to end its economic isolation form the West – what are your thoughts on Myanmar now?
China made the decision to open up in late ’78 but it took a while to put things in place. Myanmar has made the decision, they don’t even have their currency sorted out yet, so it’s going to take a while, but no ,everyday that goes by, I get more excited. Unfortunately I’m a citizen of the land of the free and we from the land of the free are not allowed to invest in Myanmar, it’s illegal. You could invest there, but I cannot.
Life in Singapore and career advice
What’s the one thing you miss the most about the U.S.? Conversely what’s the one thing Singapore has that the U.S. doesn’t?
Well I don’t really miss… I mean I go to the U.S., I was just there last week. My main complaint about Singapore is not a serious complaint but it’s not very bi-cycle friendly. The U.S. is much more bicycle friendly. I guess I wish Singapore were as bicycle friendly as parts of the U.S.
What’s your typical day like in Singapore?
“I take my daughters to school. We wake up at six because they have to get to school early. I take them on the bicycle, I come back, I exercise I have interviews while I’m exercising. I collect my daughters. I have lunch with them. Then in the afternoons I’ll have meetings, go on the computer or whatever. At night I’ll have dinner with my family unless we’re going out and then my wife and I will go out and do whatever the dinner is. And then I’ll go the disco. That’s a joke.
What’s the best piece of advice you ever got?
“Buy low and sell high. When I went to wall street. Actually all the old guys used to say ‘figure out the money and you’ll figure out what’s going on’. And so I don’t know of any specific individual but that’s advice I got a lot of times.
What’s the worst job you have ever had?
“Worst job? I don’t remember. Maybe the U.S. army, but even that, I don’t ever remember having a bad job. I was a grocery store boy when I was a teenager but even that, I learned, I don’t remember being unhappy in any job I’ve ever had. In the army, I would have liked to have done other things with those two years but even those two years were not totally wasted.”
Read more: BI
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Mike Brownfield January 6, 2012 at 10:40 am
Today’s jobs report from the Department of Labor was encouraging news for the U.S. economy. It shows that 200,000 jobs were created and the unemployment rate ticked down from 8.7 percent to 8.5 percent. Jobs were created in every sector of the economy save one — government! This report is consistent with other economic indicators and shows that the economy is finally coming out of its malaise. But like any reports, they must be put into context. The creation of 200,000 new jobs is solid growth and above the 130,000 to 150,000 new jobs that must be created to keep up with population growth. However, this doesn’t mean happy times are here again.
There are not enough Americans working or looking for work. In fact participation in the labor force is at its lowest point in 30 years as many potential workers are not yet even attempting to find jobs. Moreover, at this stage in a recovery, new jobs should be surging instead of averaging less than 140,000 for the last three months. So all is not well and President Obama should not check the “mission accomplished” box. In fact, Obama’s painful economic policies will only serve to further hamstring America’s economic engine, thereby preventing a truly strong, vibrant economy that the country is capable of having.
The President single-handedly unleashed another poison pill on Wednesday with the White House’s announcement that he will exact another illegal, unconstitutional end-run around Congress with the appointment of three new members to the National Labor Relations Board (NLRB) without Senate approval, all of whom are union officials. Here’s why that matters.
The NLRB is a five-member board that is responsible for investigating unfair labor practices, creating labor-related rules, and conducting elections for labor union representation. Last year the NLRB enacted measures shortening union elections to as little as 14 days, limiting employees’ ability to hear from both sides before they vote, allowing unions to cherry-pick which workers in a company can vote on unionizing, and preventing workers from insisting on a secret ballot in union drives, as Heritage’s James Sherk explains. These measures will make it much easier for unions to organize workers — but at the expense of workers’ rights. If workers want to join a union they have that right — management gets the union it deserves — but the government should not limit their rights in order to press workers into unionizing.
Prior to the President’s appointments, the NLRB had only three sitting members, with the one member’s term ending at the end of 2012. Were the NLRB to go down to two members, it wouldn’t have a quorum to conduct its business, meaning that the President’s Big Labor agenda couldn’t be enacted. Now, though, the President has appointed three new members who will undoubtedly carry out his agenda without any checks or balances.
And that agenda is to bolster America’s unions — a key constituency and political force standing behind the President. Unfortunately, their goal is not primarily to protect workers. The trouble is that the Big Labor agenda is fundamentally at odds with the pro-growth agenda that America is so thirsty for. Sherk explains:
Unions make businesses less competitive and discourage investment. This reduces job growth. Studies show that jobs fall by 5-10 percent at newly organized firms. Going forward, employment grows by three to four percentage points more slowly at unionized businesses than at otherwise identical non-union companies.
In short, America is witnessing President Obama put his Big Labor allies before workers, all in the guise of taking action on behalf of the American people. America’s job creators are sitting on the sidelines, as well, watching as this President takes actions that serve only to inject more poisonous uncertainty into the economy.
Apart from the economic ramifications of the President’s actions, the American people should also remember that his NLRB appointments are a blatantly unconstitutional, tyrannical abuse of power. The U.S. Constitution requires that the President receive the advice and consent of the Senate when making appointments — a requirement that President Obama entirely set aside in order to advance his agenda.
Today, the President may say he is finding success in fighting for the American worker, but in truth he is fighting for his political allies. Beneath the surface of his populist rhetoric, his policies are poisoning strong economic growth. And for the President, the Constitution is collateral damage.
- The Obama Administration is planning on a change to the nation’s immigration rules that would allow undocumented immigrants to remain in the United States while applying for citizenship.
- Was classified information leaked to filmmakers about how Osama bin Laden was killed? Representative Pete King (R-NY) says the Defense Department and the Central Intelligence Agency are investigating, according to The Hill.
- Twenty-five people were killed and dozens were wounded in Damascus, Syria, after a suicide bomber attacked a busy intersection. The explosion is the second attack in the Syrian capital in two weeks, The New York Times reports.
- Ready for a “gas-pocalypse”? The Los Angeles Times reports that record-high gas prices are headed even higher due to expensive oil and changes in refinery operations.
- LUNCHTIME CHAT: Join us today from 12-1 ET as we discuss the Stop Online Piracy Act. Find out how Congress’s actions might affect how you surf the Internet. Click here to join in!
- Obama defies lawmakers with recess appointments to NLRB (thehill.com)
- Obama Uses Recess Appointments to Keep NLRB Alive (crooksandliars.com)
- Union Bosses Applaud Obama’s Unconstitutional Appointments (actualgrit.wordpress.com)
- Obama NLRB Recess Appointments Thrill Labor, Infuriate Business – more signs that Obama has been unleashed? : 0) (jhaines6.wordpress.com)
- Obama Again Bypasses Congress, Appoints 3 To Labor Board (foxnews.com)
- Obama defies lawmakers with recess appointments to NLRB (whoopsies.wordpress.com)
- Romney Ad for S.C. Slams NLRB (blogs.wsj.com)