Jim Rogers is an American businessman, investor, traveler, financial commentator and author, co-founder of Quantum Fund with fellow investor George Soros, and is currently based in Singapore. He does not consider himself a member of any school of economic thought, but has acknowledged that his views best fit the label of Austrian School of economics.
He is a frequent commentator in news and financial media about investment matters. You probably recognize his face even if you couldn’t put a name to it.
- He is accumulating gold bullion on dips
- He warns that we should “Get prepared” as “we’re going ‘to have the worst economic problems we’ve had in your lifetime or my lifetime’
- He warns that Trump and his team are “very, very keen to have trade wars with China and other people”
- He says that history shows trade wars lead to real wars
- He is bearish on a Cashless Society – Cash-less means Freedom-less
- He warns that cashless societies are about governments “looking out for themselves first”
- He thinks that gold and silver may head lower but advises accumulating bullion on the dip
- And he advocates storing gold in Singapore (i.e. outside of Western nations)
Basing much of his analysis and thoughts on history, Rogers reminds us that it does repeat itself and we should not assume that the ways of modern life mean that things will turn out differently.
While Rogers believes that Trump’s promises to cut taxes, improve infrastructure and bring back $3 trillion worth of US company assets from overseas will be ‘wonderful, wonderful things,’ he seems more concerned about the idea of trade wars that a few in Trump’s ear seemed to have a thing for.
|Mr. Trump has also said he’s going to have trade war with China, Mexico, Japan, Korea and a few other people that he has named. He swore that on his first day in office he would impose 45% tariffs against China. He’s been there three weeks, two or three weeks and he hasn’t done it yet but he still got it in his head I’m sure or maybe he’s just another politician like all the rest of them. He says one thing and he doesn’t mean it at all but he does have at least three people in high levels in his group who are very, very keen to have trade wars with China and other people.|
Rogers says it could be ‘happy days’ for a while if Trump doesn’t follow through on campaign promises to take on trade competitors, but warns that if Trump does pursue these ideas that
|it’s all over. I mean history is very clear that trade wars always lead to problems, often to disaster, sometimes even to real war, a shooting war.|
Are We Heading Towards World War III?
Rogers is convinced that we are heading for war. Thanks to the seeming decline of the US, the rise of populism across the USA and Europe and a push for protectionism. Indeed, he recently went as far as to warn that we are on the verge of a “biblical” collapse.
The decline of the US in the short-term may well be encouraged by President Trump. Should a recession, or worse, kick-in in the short-term then the new administration can blame Obama, and then seemingly swoop in and save the day.
The USA isn’t alone in seeing a rise in populism and nationalism. The United Kingdom leaving the EU is a burgeoning sign of how many in Europe are unhappy with the dictats of an unelected elite in Europe. The migrant crisis has made people in various European countries think about who they are as a people, how they identify themselves culturally and how they don’t want their morals and values altered by migrant cultures that are at odds with those morals and values.
Civil unrest is on the rise. People want politicians who will represent them, not politicians who are only interested in maintaining the status quo.
Much of the rhetoric being used by Trump is also being seen elsewhere in the Western world and Rogers believes this signals war.
|…whenever things are bad and things are going wrong people look for somebody to blame. They always throughout history wherever we are, whichever country we’re discussing the first people blamed are always the foreigners… it’s always happened that way to blame the foreigners for better or for worse it seems it is happening as you point out in the U.S. again but it’s also happening in other places in Germany, France, Italy many places they’re blaming the foreigners already again it’s even happening in Singapore to some extent where I live…
And as you rile up against the foreigners most countries historically have closed off one way or the other they close their borders, they close their economies and when you close the economy it leads to economic problems and sometimes eventually if you get into real serious trade wars it leads to bankruptcy and even worse.
It’s rare and I don’t think ever in history that one country has started a trade war and the other country says, “oh well that’s too bad but we’re not going to do anything we’re just going to sit here and let you hit us again and again and again.” No the other countries retaliate that’s the way human beings are.
So if country X starts a trade war then country Y hits back and then country X hit’s back and country Y hits back and the next thing you know countries C and D and E are involved as well and everybody’s suffering and then as economies get worse more and more things happen more and more discrimination more and more blame and then eventually bullets start flying.
…I don’t like at all what I see happening. There are many analogies to previous periods in history before the First World War and this sort of thing started happening certainly before the Second World War. It’s been common throughout history.
And these wars when they start they usually– in 1914 nobody, nobody could conceive of war and then the next thing you knew, there was war and everybody said don’t worry it’ll be over by Christmas, well six months later everybody was saying, how did we get into this war? How do we get out of this war? It’s absurd. It’s ludicrous…
So where does all this lead to?
Rogers told Barron’s in 2016 that
|… if Trump does what he says he’s going to do such as wage trade wars then it’s going to be bad news for all of us. Trade wars have led to bankruptcy and bankruptcy has often led to war. At that point, you’d better own a lot of gold.|
What About The War on Cash?
Rogers refers to the move by governments to reduce the amount of physical cash in circulation through controls and law enforcement as a way of taking away our personal freedoms. That’s already happened in India. In the EU, the €500 note is due to be taken out of circulation. In the USA, there seems to be some moves afoot to take the $100 bill out of circulation too.
Anyone who engages in a large cash transaction is deemed to be suspect – guilty until proven innocent of being engaged in crime in some way. Tray withdrawing a large sum of cash from your bank (over the counter) and see just how easy it isn’t. It’s your money but how you want to use it comes under intense scrutiny.
Where this war on cash is most prevalent – Europe and India, the excuse for it is always “security”, allegedly protecting the citizenry from criminals and terrorists. It engages the culture of fear.
To this Jim Rogers says that this is just a way to get us to give up our freedoms:
|Well history shows that people always would like a little more safety and are willing to “give up some things for more safety and security.” Benjamin Franklin said well anybody who would give up some freedoms for security is going to wind up with neither security nor freedom and they deserve to lose both and of course that’s the way it is.|
And the war on cash is facilitated by the rise in technology. But a cashless society isn’t the only way technology can be used to usurp freedoms.
|So the Internet and the computers changing everything that we know, money can certainly be easily converted to computers not today because there are still, some people who don’t have computers and the system is not ready it but it can be done and when it’s done the governments are going to be very, very happy they going to say they’re doing it for our own good Eric, this is not them, this is for our good. That they’re doing this, but it’s coming and it’s going to be a whole different world in which we live. Probably we are not going to have as many freedoms as we have now even though we are already losing our freedoms at a significant pace.|
As outlined in this article, the war on cash is not only reducing our personal freedoms but makes us far more vulnerable to bail-ins and negative interest rates. With this in mind, Jim Rogers recommends that investors diversify their portfolios and buy gold, even if you already have some.
Just this month, the European Commission proposed a bill targeting cash payments. The Action Plan had this to say:
|Payments in cash are widely used in the financing of terrorist activities… In this context, the relevance of potential upper limits to cash payments could also be explored. Several Member States have in place prohibitions for cash payments above a specific threshold.|
Rogers also had this to say on the moves to a cashless society:
|Governments are always looking out for themselves first, and it’s the same old thing that has been going on for hundreds of years. The Indians recently did the same thing. They withdrew 86 percent of the currency in circulation, and they have now made it illegal to spend more than, I think it’s about $4,000 in any cash transaction. In France you cannot use more than, I think it’s a €1,000.
Many countries are already doing this. Some states in the US you cannot make cash transactions above a certain amount. Governments love it. Then they can control you. If you want to go and buy a cup of coffee, they know how many you drink, where you buy them, etc., if they can all put it into electronic formats and they will. The world is all going electronic.=
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“”said Rogers in an interview with MacroVoices Podcast.
“,” the investor said.
Rogers plans to buy more gold
As mentioned in the beginning, Rogers is very clear that while he already owns gold and silver, he is looking to buy more. When will he buy? He’s expecting both metals to have another dip.
Readers should not be put off by a seemingly bearish attitude to the gold price. Rogers has previously said that he has never sold any of his gold and has high hopes for the long-term gold price, mainly thanks to his very low expectations of governments and central bankers running the economy.
He told Barron’s last year:
|Before this is over, gold is going to go through the roof and could turn into its own bubble – more and more people will lose confidence in governments and currencies and when that happens, they always turn to gold.|
Timing is tricky though, and Rogers hopes that he’ll realise at the right time if the dip isn’t coming and will be “smart enough to buy more if it doesn’t.”
Rogers has long been on record regarding his expectation of great things for gold, mainly thanks to governments debasing the currency.
|If the U.S. dollar becomes confetti, any number you want to make up. They’re printing U.S. dollars fast enough to turn them into confetti. Who knows how high gold will go …|
To those who are unaware, Rogers lives in Singapore extolling the virtues of the Asian country that acts as the gateway to the gold market between East and West. It will come as no surprise that he also advocates storing gold in Singapore (you can easily do this if you have a GoldMoney account or a BullionVault account). He’s not alone, both Jim Sinclair and Dr Marc Faber are also advocating acting as your own central bank and owning physical gold coins and bars in Singapore.
Here’s the entire MacroVoices interview with Jim Rogers: