– Jim Rogers Warns US Stock Investors “Be Careful… You’re In A Fool’s Paradise” (ZeroHedge, Oct 3, 2013):
“It is only a matter of time before the US stock market runs into devastating problems due to the Fed QE program”, Jim Rogers warned during an interview on CNBC Singapore, adding that the prevalance of similar stimulative pograms around the world merely exacerbates the probability and size of a fall. His simple message to US investors – “Be Careful.”
On US Equities:
“We may well have had a big, big rally in the U.S. stock market, but it’s not based on reality. I would encourage investors to know you’re in a fool’s paradise, be careful, and when people start singing praises, say, ‘I’ve been to this party before, and I know know it’s time to leave.'”
On A US Recession:
“First of all, throughout American history, we’ve always had slowdowns every four to six years. That means that sometime in the next couple of years – three years, maximum – we are going to have problems again, caused by whatever reason,”
On The Increasing Size Of The Problems:
“For instance, there was 2001 and 2002, and then 2007 and 2009 was much worse.
Well, the next time it’s going to be worse still, because the level of debt is so, so, so much higher. Every country is increasing its debt at the same time.”
On The Limits Of Central Banks:
“This is the first time in recorded history that we have every major central bank in the world printing money, so the world is floating on an artificial sea of liquidity.
Well, the artificial sea is going to disappear someday, and when it does, the catastrophe will be even worse. Yes, it’s coming,”
I cannot believe it has held up this long. The FED is keeping much of it afloat using MFG money that doesn’t exist off a spreadsheet.
At some point, people are going to start asking for their money.
FDR’s FED chairman described the crash of 1929 this way: “As in a poker game, the chips got concentrated into fewer and fewer hands until the other fellows could only stay in the game by borrowing. When their credit ran out, the game stopped.” M. Eckles, 1952.
The crash of 1929 started in Europe, when liquidity problems began to rear their ugly heads. When the market started going south here, many investors got margin calls from their brokers. They ran to the bank to get cash to save their portfolio. That was the cause of the run on the banks……and soon it became apparent the banks didn’t have the cash. Then, the panic started, and the rest is history. Back then, margining was 9:1. Today, it is 1000:1. It will be far worse this time.