Many bulls will argue that the United States is not headed towards a recession anytime soon. Just as many bears will say that the U.S. is already on the cusp of entering a recession. One contrarian investor is in the latter category.
Speaking in an interview with Bloomberg News, Jim Rogers, Chairman of Rogers Holding, said that he is certain the U.S. will be in a recession within the next 12 months. In fact, according to Rogers, he thinks there is a 100 percent probability of an economic downturn within that time frame.
With the U.S. economic recovery entering its eighth year, the U.S. is due for a recession – on average, the U.S. embarks upon a recession every six to eight years.
“It’s been seven years, eight years since we had the last recession in the U.S. and normally, historically we have them every four to seven years for whatever reason—at least we always have,” he said. “It doesn’t have to happen in four to seven years but look at the debt, the debt is staggering.”
What should be noted is that Wall Street financial experts peg that number at between 33 and 65 percent (SEE: Citi outlook says 65% chance of U.S. recession in 2016).
So, what exactly will put the U.S. into a recession? He didn’t specify a certain thing, but referred to a possible domino effect from slowing economics in China, Japan and the eurozone. He added that there are already signs of the U.S. economy stuttering, all you have to do, he says, is look for the right data.
“If you look at the payroll tax figures [in the U.S.], you see they’re already flat,” Rogers averred. “Don’t pay attention to the government numbers, pay attention to the real numbers.”
Despite a potential financial crisis, Rogers is long the U.S. dollar because it could turn into a bubble when a recession hits. “I mean, if markets around the world are crashing, let’s just say that scenario happens, everybody’s going to put their money in the U.S. dollar—it could turn into a bubble.”
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