Singapore-based American investor and financial commentator Jim Rogers shares his views on the current market volatility, inflation, threats of a looming recession, and the emerging markets, as well as value commodities and other asset classes. Edited excerpts from an interview:
After a strong rebound in the markets, a fresh spell of volatility is visible again. What are your views?
We have had a lot of pessimism in the recent past and, whenever you have extreme pessimism, you often have something which comes to break it. People started worrying less about inflation. However, the world is not okay now and it’s going to get worse, as the war gets worse. In my view, this is a bear market rally. Inflation is calming down because nothing goes straight up. In any kind of market things go up, they correct and they go up again. Inflation is not going away because governments have printed so much money, more than ever in the history. Inflation is not finished yet.
Do you expect interest rates to go up further?
When central banks realise that inflation is here still and is getting worse again, then they will start raising interest rates again. They are not very smart people. They are bureaucrats and academics. We have not had very good central bank heads in several decades.
Are we staring at a recession?
We will have a recessionary environment soon because there has been so much inflation. It has been the longest time in the history of the US to have serious problems. We are coming closer to the end and when the end comes it is going to be very bad because there is so much debt. Maybe recession has started, but it is not serious yet because there have been some good things along the way, and governments printed and spent a lot of money. But this recession is going to be very bad as debt has gone up so much in the last 15 years.
How are the emerging markets placed? Do you find value in any emerging market?
If the US has a problem everybody has a problem. Some may have more than others depending on the debt they have. Value is harder to find, but I have made some investments in Uzbekistan and in Cambodia. But these are very small markets. Being small, they will not be affected, have not been overpriced and are cheap. I am not investing in India because I am looking for markets which have not been explored in the past few years. India has had some very good years in the stock markets so I am not investing now. I am not investing in the US, too. I am looking for things that are depressed and unknown
Do commodities or other asset classes offer value?
If you look at asset classes, bonds are certainly a problem, Bonds have not been so expensive ever. Property has been forming a bubble in many countries. Many technology stocks are also forming a bubble. The only asset class I know that is cheap are commodities, which are real assets. If we have inflation, you should own things that will go up in price. Real assets always go up in inflation and that is the way I am looking to protect myself.
Should precious metals be considered as well?
I own gold, I own silver. If I was buying today, I would buy silver which is much more down from all-time highs over gold. Besides, copper is interesting as electric vehicles use much more copper than petrol vehicles, and so will be lithium, lead, etc. Opening lead mines takes a long time. Hence, there are opportunities in other metals, too.
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