The fundamentals of the global economy are not sound: central banks worldwide are printing vast amounts of cash, federal governments are accumulating astronomical sums of debt and the stock market is relying on monetary stimulus. Is the global economy on the verge of collapse? One financial guru says yes.
Speaking with the CBC’s Lang & O’Leary Exchange on Monday, Jim Rogers, chairman of Rogers Holdings and author of “Hot Commodities,” warned that the international financial system will crumble and the global economy is set to implode.
“Eventually, the whole world will collapse,” said Rogers. “We in the West have staggering debts. The U.S. is the largest debtor nation in the history of the world.”
Rogers added that the current policies like quantitative easing will not last forever. “This isn’t going to last. When it ends, the bull market in commodities will probably end too, but the bull market in a lot of stuff will end.”
Essentially, the severity of the financial crises will be due to the enormous debt levels the U.S. presently faces. According to Rogers, the economic collapses get worse every half-decade because the national debt continues to grow at a rapid pace. “Wait until 2015 or 2016: debt has gone through the roof. The next one is going to be very bad.”
These remarks come one week after Rogers stated that the U.S. should abolish the Federal Reserve System because its policies are incompetent. Noting that three central banks have been established in the U.S. and two of them have been eradicated, if he were head of the central bank, he would close up shop and submit his resignation.
“This one will too, because they keep leveraging up the balance sheet. They keep making mistake after mistake. They keep printing money,” Rogers told Russia Today in late November. “This is going to self-destruct, unless the politicians say this thing is a mistake, let’s get rid of it. It’s more likely, though, that it will self-destruct.”
When it comes to investing, Rogers remains bullish on commodities, particularly agriculture and natural gas.