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The worst crash in our lifetime is coming

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Just read this.. I'm not market guru.

Any one have some input?

http://www.businessinsider.com/jim-rogers-worst-crash-lifetime-coming-2017-6

 

Heres the Transcript.

 

Legendary investor Jim Rogers sat down with Business Insider CEO Henry Blodget on this week's episode of The Bottom Line. Rogers predicts a market crash in the next few years. One that he says will rival anything he has seen in his lifetime. Following is a transcript of the video.

Blodget: One of the things I’ve always admired about you as an investor is that you don’t talk about what should be. You figure out what is going to be and then, you do that. So what is going to be with respect to the stock market? What’s going to happen?

Rogers: I learned very early in my investing careers: I better not invest in what I want. I better invest in what’s happening in the world. Otherwise, I’ll be broke. Dead broke.Well, what’s going to happen is it’s going to continue. Some stocks in America are turning into a bubble. The bubble’s gonna come. Then it’s gonna collapse and you should be very worried. But Henry, this is good for you. Because someone has to report it. So you have job security. You’re a lucky soul.

Blodget: Well, yeah, TV ratings do seem to go up during crashes but then they completely disappear when everyone is obliterated, so no one is hoping for that. So when is this going to happen?

Rogers: Later this year or next.  

Blodget: Later this year or next?

Rogers: Yeah, yeah, yeah. Write it down. 

Blodget: And what will trigger it?

Rogers: Well, it’s interesting because these things always start where we’re not looking. In 2007, Iceland went broke. People said, ‘Iceland? Is that a country? They have a market?’ And then Ireland went broke. And then Bear Stearns went broke. And Lehman Brothers went broke. They spiral like that. Always happens where we’re not looking. I don’t know. It could be an American pension plan that goes broke and many of them are broke, as you know. It could be some country we’re not watching. It could be all sorts of things. It could be war. Unlikely to be war but it’s going to be something. When you’re watching Business Insider and you see, ‘That’s so interesting. I didn’t know that company could go broke.’ It goes broke. Send me an email and then I’ll start watching.

Blodget: And how big a crash could we be looking at? 

Rogers: It’s going to be the worst in your lifetime.

Blodget: I’ve had some pretty big ones in my lifetime.  

Rogers: It’s going to be the biggest in my lifetime and I’m older than you. No, it’s going to be serious stuff. We’ve had financial problems in America -- let’s use America -- every four to seven years, since the beginning of the republic. Well, it’s been over eight since the last one. This is the longest or second longest in recorded history, so it’s coming. And the next time it comes -- you know, in 2008, we had a problem because of debt. Henry, the debt now -- that debt is nothing compared to what’s happening now. In 2008, the Chinese had a lot of money saved for a rainy day. It started raining. They started spending the money. Now, even the Chinese have debt and the debt is much higher. The federal reserves, the central bank in America, the balance sheet is up over five times, since 2008. It’s going to be the worst in your lifetime, my lifetime too. Be worried.

Blodget: I am worried.

Rogers: Good. Good.

Blodget:   Can anybody rescue us?

Rogers: They will try. What’s going to happen is they’re going to raise interest rates some more. Then when things start going really bad, people are going to call and say, ‘You must save me. It’s Western civilization. It’s going to collapse.’ And the Fed, who is made up of bureaucrats and politicians, will say, ‘Well, we better do something.’ And they’ll try but it won’t work. It’ll cause some rallies but it won’t work this time.  

Blodget: And we are in a situation where Western civilization already seems to be possibly collapsing, even with the market going up all the time. Often when you do have a financial calamity, you get huge turmoil in the political system. What happens politically if that happens? 

Rogers: Well, that’s why I moved to Asia. My children speak Mandarin because of what’s coming. You’re going to see governments fail. You’re going to see countries fail, this time around. Iceland failed last time. Other countries fail. You’re going to see more of that. You’re going to see parties disappear. You’re going to see institutions that hav e been around for a long time -- Lehman Brothers had been around over 150 years. Gone. Not even a memory for most people. You’re going to see a lot more of that next around, whether it’s museums or hospitals or universities or financial firms.

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Just a couple of thoughts.

In all of recorded history there isn't a single instance of a fiat currency that didn't eventually fail. The U.S. dollar is fiat currency based on debt. Yes it will eventually fail. (Check with Venezuela.)

In my amateur opinion there is no solid financial reason for the stock market to be this high. With interest rates at 0% it's the only place since 2008 where some money can 'make' more money. If you can and do sell at a price higher than you bought. So it's a financial game of musical chairs. Yes, it will eventually collapse like every other bubble in history.

And our government cannot continue decade after decade to promise more than it can responsibly deliver and cop out paying with more and more public debt. (Not to mention the political ramifications.) Social Security is a simple money transfer machine, not an investment in someone's future. (Do you actually know where the Social Security Trust Fund is, and what it is?) And let's not forget Medicare and Medicaid. So yes, this will all collapse too.

The question is when? And why? No one knows. So the music plays on. Care to grab a chair?

"The trouble with money Bud... it makes you do things you don't want to do."

Lou Mannheim, Wall Street

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He is right. We are screwed right now. All bubbles burst. Tech, Housing, S&L, Oil, etc. What goes up must come down. Now the stock market is a tremendous bubble. The bigger problem is there is a tremendous amount of debt. Federal Debt, Sovereign Debt, State and Municipal Debt, and Personal Debt. The biggest problem is we have no ammunition to fight an economic downturn.

 

Interest rates have stayed at record lows for too long. Inflation is much worse than the official government numbers that strip out food and fuel. Right now the Fed has a point til we are back at zero. More QE will just increase inflation. We need a major market correction. Fed should have raised rates 4 points by now. The problem is Wall Street is running the show. Greenspan would have crashed this market a long time ago by raising rates. We would have been better off for it. Inflation and worse yet Deflation is the coming problem. A market correction is needed but it is too late

 

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"Well, that’s why I moved to Asia. My children speak Mandarin because of what’s coming."

In my uneducated, uninformed opinion, that statement shows ignorance. Chinese are buying US properties, companies and assets like there is no tomorrow. And I bet some "expert" in China is saying, as we speak, "Thats why I am buying assets in US and sent my kids to Harvard". 

If anybody knew whats going to happen, Market will be flat like a dead guys heart beat. And it doesnt take a genius to say "Market will crash", when its going up and say "Market will grow", when shit hits the bottom.  Trillion dollar question is, exactly WHEN. 

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All of these problems talked about can and will be fixed.  It may take states like CT, NJ and IL to go bankrupt; but the insanity will end because it will be proven once again that you do run out of other people's money.

Yes Social Security no longer has a locked box and is a legalized Ponzi Scheme.  But that too can be fixed.  They patched it in 1986 but it needs to really be fixed.  When it was originally started people retired at 65 and died shortly after with something like 12 people contributing for each one collecting.  Now I think that ratio is something like three to one.  The solution is to look at life expectancy and quality of life and probably raise the age to collect to something like 75.

As far as the stock market, well it is one of the best predictors of the future - it is always looking at what might be rather than what was.

 

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Did not read it... BUT.... I do know Jim Rogers fairly well.  (met a number of times), He is an expert in commodities and puts his money where his mouth is, moved his entire family to Singapore and his kids are learning Mandarin (chinese). 

Will read this later and comment. 

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This dude is bullshit, ignore whatever he's shilling for. Not that I don't think a correction is coming, we are due, but there's correction and there's collapse. Is collapse possible? Yes, but his shittastic reasoning is "something is coming" and it will be big. That's like some scam artists doing a cold read of a room. 

Look, if it is BIG big, The vase majority of the "economy" is the ledger economy of banks and investors. 99% plus of that doesn't participate in the actual economy. 2007 resulted in a shit storm because we wanted to patch a ~5% hole in the ledger economy with real economy money. That wasn't possible, but we did patch a chunk of it that way, and printed money for the rest. It filled a hole where real transactions aren't which is why there wasn't a shit ton of inflation. The printed money didn't compete for assets it just essentially replaced shit that caught on fire. In the case of shit getting REALLY bad we just lop that segment off and let it burn. There are options to deal with a failure isolated to the financial sector. 

As for fiat currencies being doomed. The tools in existence now aren't what we had in the past. Most of these tools and strategies were designed to promote a fiat currency. Second I would argue that we don't truly have a fiat currency. What we have is the petro dollar, and it not only involves oil transactions, it is a global reserve currency. 

I do think there are massive risks on the horizon to the economy as we know it and things could get seriously fucked. I'm pretty much at 100% odds that the economy in the next 50 years won't look like something we recognize as normal-ish. 

1) mass automation of jobs. This is super high risk, but not as near term as people think. It could go well or badly, but either way it will affect drastically how money flows and how stable nation states are. Good or bad we aren't ocming out the other end of this looking remotely like how we went in. 

2) Boomers - They are going to fuck us all for a series of reasons, and it won't even be deliberate. 

     a) They are going to put a shit ton of real estate on the market when they head for their death beds. 

     b) We are going to hit the middle of the boomer bubble making claims on pension funds that are FUBAR, and that will officially be put up or shut up time.

     c) They are going to kick the living shit out of federal and state budgets for medicare costs. 

     d) They are going to liquidate a shitload of assets besides real estate, and it isn't like the echo boomers of gen-y/millenials are going to be prepared to buy in in similar quantities. 

3) 1+2 = deflation. Deflation is a bitch to manage. 

4) As demonstrated in the last decade or so, deflation and inflation are simply no longer broad based. We have 7.5 billion people on earth and it is growing. Flat screen TVs will deflate. Food, water, rare minerals with practical uses not so much. On the up side, item 1 has the potential to temper inflationary food prices with decreases in labor costs for food production. 

5) skilled vs. unskilled employment. If1 above doesn't decrease barrier to participating in skilled labor, we have a serious problem. When the productive lifespan of a human is 40-50 years and we have the system set up that becoming skilled requires about 5 years of work and about 20 years of debt, switching skills 3-5 times in a lifespan is just mathematically not possible. Stabilizing emplyment is going to be hard without massive population reduction. 

6) Materials science. Look. efficiency makes things cheap. We will have to learn to live with each other. Because right now advances in materials science has put some seriously destructive forces within reach of a small number of people acting together. The price and number of people needed will shrink, and more and more dangerous stuff will be readily available. 

 

 

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BTW, I spent some time in Singapore. I personally know some people who live there and other parts of Asia.  Anyone who gets rattled by US markets should NEVER even think about Asia. Sure there are some great investment opportunities, but majority make Madoff looks like a rookie.  If you like mob-style money lending with promised returns of 25%+, and dont mind politics, personal connections and will of the Govt dictate the outcome, sure go for it.

98% investments dont pass smell test if US regulations and standards were to apply. 

I also worked for companies (including the present one) who ignored (and continue to do so) profit making US market for a "emerging markets" in Asia that failed to materialize for the last 10 years. 

And dont get me started on cost of living, living style, breathing clean air, hugging ARs before going to bed.  

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10 minutes ago, jackandjill said:

BTW, I spent some time in Singapore. I personally know some people who live there and other parts of Asia.  Anyone who gets rattled by US markets should NEVER even think about Asia. Sure there are some great investment opportunities, but majority make Madoff looks like a rookie.  If you like mob-style money lending with promised returns of 25%+, and dont mind politics, personal connections and will of the Govt dictate the outcome, sure go for it.

98% investments dont pass smell test if US regulations and standards were to apply. 

I also worked for companies (including the present one) who ignored (and continue to do so) profit making US market for a "emerging markets" in Asia that failed to materialize for the last 10 years. 

And dont get me started on cost of living, living style, breathing clean air, hugging ARs before going to bed.  

But the prostitutes are cheap!

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4 hours ago, jackandjill said:

"Well, that’s why I moved to Asia. My children speak Mandarin because of what’s coming."

In my uneducated, uninformed opinion, that statement shows ignorance. Chinese are buying US properties, companies and assets like there is no tomorrow. And I bet some "expert" in China is saying, as we speak, "Thats why I am buying assets in US and sent my kids to Harvard". 

If anybody knew whats going to happen, Market will be flat like a dead guys heart beat. And it doesnt take a genius to say "Market will crash", when its going up and say "Market will grow", when shit hits the bottom.  Trillion dollar question is, exactly WHEN. 

Lets no forget that China is the country that is also buying our debt.

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I know this sounds strange but assets don't have a price that is reasonable. They have a price based upon supply and demand. And nothing ever goes in a straight line. If you invest in anything you should be prepared for the ups and down of that particular market. As others have said timing is everything. But if you invest in the US stock market over the long term it has always gone up (with lots of swings along the way). Stocks represent companies and companies try to make money so stocks go up over the long term. The same cannot be said for other assets like metals, etc.

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Lets no forget that China is the country that is also buying our debt.


That is a fallacy. China has reduced their US debt holdings and are not even the #1 Foreign Nation to own US Debt. That distinction belongs to Japan. China owns $1.12T and Japan owns $1.13T at the end of 2016. China actually reduced US Debt holdings by $41.3B while Japan only reduced by $4.5B. China did so to prop up their own Ponzi Scheme Economy. China is dependent on the U.S. Economy more than most countries. If the U.S. Economy tanks so does China's.

The largest holder of U.S. Debt is the Social Security Trust Fund at $2.8T and second largest is the Federal Reserve at $2.5T. Of the $19T in U.S. DEBT only $6.3T is foreign owned. The rest is at least owned in country.

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That is a fallacy. China has reduced their US debt holdings and are not even the #1 Foreign Nation to own US Debt. That distinction belongs to Japan. China owns $1.12T and Japan owns $1.13T at the end of 2016. China actually reduced US Debt holdings by $41.3B while Japan only reduced by $4.5B. China did so to prop up their own Ponzi Scheme Economy. China is dependent on the U.S. Economy more than most countries. If the U.S. Economy tanks so does China's.

The largest holder of U.S. Debt is the Social Security Trust Fund at $2.8T and second largest is the Federal Reserve at $2.5T. Of the $19T in U.S. DEBT only $6.3T is foreign owned. The rest is at least owned in country.

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While the above might be true it was Just announced the other day that China will be increasing their purchases of US debt.

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While the above might be true it was Just announced the other day that China will be increasing their purchases of US debt.

 

Yes they did. They bought the most in 2 years at $27.9B however their overall holdings are still less than the end of 2016 at $1.09T. Japan is holding steady at $1.13T. Data is current as of 3 weeks ago.

 

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China dumping US Dollars would not be good, but they would hurt themselves more than us. What would crush us is the loss of the Petro dollar.

That's one of the biggest reasons Qadaffi was overthrown and murdered. He was trying to form an African Currency for trading in oil which would have hurt the Petro Dollar. His murder was in violation of the rules of war. He was traveling under white flag. Hillary and Obama should be charged with war crimes.

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I don't think I have ever heard Jim Rogers NOT predict doom and busts. I mean, sure, eventually he will be right, and it may even be this year or the next, but that would be purely coincidence

 

We have big problems coming, revolutionary one, Raz-0's points are the reasons why, and we need to think of how we well deal with 7bil unemployed people on the planet which I think is possible within my life time.

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Wanna have some fun?  

Go to google and enter "market crash 20xx"...where you pick the year.  For any year you pick....2010, 2014, 2015, etc...there will be a pile of pundits that predicted the markets will crash that year.  Most were wrong.

http://www.barrons.com/articles/stop-worrying-about-the-stock-market-crashing-1463743491

 

Chicken Little is alive and well.....

 

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I like Jim Rogers, liked his book Investment Biker.  He has traveled the world and seen a lot and I think he has a good mind for finance and investing.  However, I do not generally give much credence to this kind of prediction.  Everyone is biased and no one, NO ONE, understands the complex and ever changing global financial system.  NO one.

I am actually surprised that we don't see more crashes and domino effect type incidents--where one seemingly minor event causes another minor event, causes something else, and eventually it is a huge problem.  but we don't.  Rogers is predicting something that he is hedged against--the fall of the west and rise of China.  Just like in the 1980s when Japan took over the world economy, except that never happened.  I think that what Rogers says is certainly plausible, sounds reasonable, and could happen.  But a lot of things  could happen--some rogue mathematician could solve P/NP and then it is game over (or not).  If I hedge against everything I think I will end up with nothing.

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If you think the U.S. dollar is backed by oil and therefore reliable as a store of value, explain that to the citizens of Venezuela. They have a giant reserve of oil and their currency is currently next to worthless.

The U.S. dollar is a currency created by the Federal Reserve and not the U.S. government, backed by nothing but debt, not tangible assets. Read exactly what it says on the U.S. currency currently in your wallet and purse. You'll notice you don't have any Silver Certificates in there. They're not hiding anything.

Since Nixon closed the international gold window the value of our U.S. dollar is based on good will. And hope.

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virtually the ONLY thing that makes our money worth anything is that one party is willing to accept it in trade for a product, and anther party is willing to trade a product for it. other than that, it's more worthless than al bundys socks.

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7 hours ago, 1LtCAP said:

virtually the ONLY thing that makes our money worth anything is that one party is willing to accept it in trade for a product, and anther party is willing to trade a product for it. other than that, it's more worthless than al bundys socks.

That however is true of all money every, in every form, material, or source of issue.

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while this is true.....we used to be able to trade our cloth money for gold or silver. not so much now.



You can still refer to vlads post above. Even if it's gold or silver, you can't eat it. So it's value is assigned by what people will trade for it.


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56 minutes ago, mikeyjones said:


You can still refer to vlads post above. Even if it's gold or silver, you can't eat it. So it's value is assigned by what people will trade for it.
 

 

 

Exactly, that was my point. There is no intrinsic value to anything, but the value the we collectively assign to it.  It doesn't matter if it is sea shells, tally sticks, gold coins, paper money, or Farmville sheep.  All those things only have value because two or more people agree they have value.   When we traded across the earth gold and silver made more sense because there we no promises implied by countries around the world, out of reach and possibly constantly falling over and you could always traded it someone else. 

Sure, the Euro or Dollar or whatever could fall over too, and I'm all for diversified portfolios, I'm not saying that owning precious metals is a bad thing. I am however saying that there is no such thing as intrinsic value, it is all comparative and situational. If you are starving and have a loaf of bread, and I offer you gold coins for it .. do they have any value to you, right now?  

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