Dominique de Kevelioc de Bailleul: Commodities investor extraordinaire Jim Rogers of Rogers Holdings strongly suggests battening down the hatches, because the global economy is headed for the rocks, taking stocks with it. To protect wealth from a deepening of the mostly Western side of the global depression, the 69-year-old Rogers is long oil, gold and other tangibles to front-run the predictable response by central banks of further money printing. He is short equities.
“If stocks collapsed around the world I would have to buy a lot more stocks,” he told CNBC, Wednesday. “I would buy stocks again, but I don’t see that happening. I’m telling you, the economy is going to be bad next year. Why buy stocks in the face of something like that?”
Rogers’ gloomy assessment of the future reconciles with the data out of Europe, the U.S. and China—which, taken together, these economies represent approximately 60 percent of global GDP. Get my next ALERT 100% FREE
In Europe, the sovereign debt crisis accelerates, from relatively paltry numbers needed for a Greece bailout, to gargantuan bailout packages recently proposed for Spain—amounts so large that the ECB emergency bailout fund will be wiped out completely in a matter of weeks. Then again, there is Greece; it teeters on leaving the eurozone all together, according to EU member of parliament Nigel Farage.
“There’s an impending looming disaster . . . . 100 billion (euro) is put up for the Spanish banking system, and twenty percent of that money has to come from Italy,” said Farage on the floor of EU parliament this week. “Under the deal, the Italians have to lend to the Spanish banks at three percent. But to get that money, they have to borrow on the market at seven percent. It’s genius, isn’t it?
“Any banking analyst will tell you that 100 billion (euro”) doesn’t solve the problem,” Farage added. “It would be more like 400 billion (euro). The real elephant in the room is, once Greece leaves, the ECB, the European Central Bank, is bust. . . It has 444 billion euros worth of exposure to the bailed out countries.” The Euro Titanic has now hit the iceberg, and sadly there simply is not enough lifeboats.”
Jim Rogers agrees.
“What they’re [European Parliament] doing is they’re making this situation worse,” he said in Wednesday’s CNBC interview. “What I see happening is more and more bailouts . . . the debt is up to the ceiling. The recession is going to be worse. This is not going to be fun.”
Rogers has said in an earlier interview with NewsMax that he knows the economic statistics coming out of Washington are jury-rigged in an effort to bolster the dollar in the wake of the euro woes, and also suggested that after the U.S. elections in November, the EU sovereign debt collapse will move to the U.S.—and that’s the time when the global panic may begin in earnest.
“ . . . this year is going to look good and feel good, because Mr. Obama is going to give out a lot of good information,” Rogers said in a NewsMax interview of nearly two weeks ago (BE article). “It may be manipulated information, but he’s going to put out a lot of good information. He’s going to spend a lot of money; he’s going to print a lot of money to get us through the election . . . So if you are not worried about 2013, please — get worried.”
And the signs of a U.S. economic collapse to pair up with Europe’s breakup riddle throughout the monthly data, according to Charles Biderman, CEO of TrimTabs. Biderman reported as early as March that he saw massive discrepancies in the job data released by the U.S. Department of Labor for the months of January and February, alone. As the Labor Department reported approximately 350,000 jobs added, Biderman calculated approximately 3 million loss for the two combined months.
Biderman, too, believes the day of reckoning is coming for stocks.
“How can stock markets be this high if the real economy is barely growing?” Biderman stated in his latest video, posted on zerohedge.com.
After the election, the truth cannot be withheld from the casual observers of the markets regarding the phantom statistics not jibing with reality. It’s then, Rogers believes, the global sell off in stocks will catch up with investors who are long the U.S. recovery story. In fact, Rogers is so convinced of the bubble in stocks popping in the coming months that he’s short equities.
“I’m not advocating because I’m short, but I’m short because I think there are going to be more problems in the world economy in the next year or two,” he said on Wednesday. “That’s how you protect yourself in times like this.”
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