3 Minute Gold News
A Quick Read for Busy People
A 3 minute synopsis of the interview with Jim Rogers, chairman of Rogers Holdings and author of Street Smarts: Adventures on the Road and in the Markets, by Chris Waltzek from GoldSeek Radio.
Topics:
European QE
Oil
Gold
New Interests
Jim Rogers
Interview link
January 27, 2015
EUROPEAN QE
Two years ago Jim saw that the euro peg to the Swiss franc was illogical and could not work, and foresaw the recent depegging.
Central banks don’t know what they’re doing.
Ben Bernanke and Janet Yellen are academics and bureaucrats. They get a job as head of the central bank so people think they know what they’re doing, but they have no clue, as we’re finding out monthly.
Just because the ECB prints money does not mean it will fix the fundamental problems.
A major problem is that there is staggering debt that’s going higher. Printing money and incurring more debt is not going to solve it.
One reason the world economy can’t grow is because of the huge debt overhang. Anyone who has debt, no matter how hard they work, will have a lot of their work going to pay off the debt.
Every country in the world, especially the ones talking about austerity, aren’t cutting their debt — they’re increasing it.
All the central bank solution of more debt does is bail out the banks. It just gives the banks more liquidity. They’re not bailing you out.
Jim’s solution is to let the banks fail.
In the 1920s the U.S. had a huge problem like this, and they raised interest rates and balanced the budget. It was terrible pain for a year or two and then there was the greatest economic decade in American history.
QE has never worked anywhere. The thing that has worked is to clean out the system and start over.
QE just takes money from competent people and gives it to incompetent people, and lets the incompetent compete with the competent, using their money.
Japan is the third largest economy in the world. The Japanese who had real assets like gold and silver survived during a difficult time, and even thrived and made a lot of money during all of it.
In Europe their currency has gone down dramatically in the last few years, but those who owned gold have done okay.
GOLD
Jim owns gold and silver. He says everyone should own some as an insurance policy if nothing else.
You can own it to make money, but even if you’re not interested in making money with it, because you believe you can make more somewhere else, everyone should own some gold and silver as an insurance policy.
Jim bought shares in gold miners in the last few weeks, because they are so unbelievably depressed. They might become even more depressed.
There might be another opportunity to buy gold or gold miners this year, or the next year, or sometime — it might not have reached a bottom.
Jim owns plenty of gold and silver, but he expects another opportunity to buy, which he says may or may not come.
OIL
Jim didn’t see it coming when oil lost 50% of its value.
It’s one of the most dramatic collapses Jim has ever seen of any asset.
One of the reasons he didn’t foresee it is that the drop is engineered by the state department — it’s political.
America was negotiating with Iran. The deadline came last summer and negotiations broke off, so they extended the deadline.
Shortly thereafter Saudi Arabia started dumping oil.
The state department put pressure on Saudi Arabia to dump oil because of Iran and Russia, who America has dealings with. Arabia is happy to do it because they needed to do something to slow down fracking, if nothing else.
So it was mostly a political decision.
Since it’s political and the next deadline with Iran is July 2015, maybe something will happen before then.
Usually when an asset collapses this dramatically it hits a bottom. If we haven’t hit it then we’re at least close, given how dramatic the drop was.
The world has been consuming oil more than it has been producing, apart from fracking with new wells.
Now there will be bankruptcies in the fracking business. They produce all their oil in two years, so you don’t have long lives with those wells.
As far as “punishing Russia”, that was all engineered by America. Jim states that he believes the state department set about to have a coup in Ukraine to overthrow the government and bring in a new government.
This brings good PR for the U.S. government from the U.S. people, but it has backfired for them. Now the U.S. is suffering and trying to blame it on the Russians.
NEW INTERESTS
Jim is still buying China, Japan and more agriculture, and will buy Russia in the future but not yet.
His philosophy is to find something that is depressed due to a change, and then to own it for years. He doesn’t change his opinions very often.
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Gold spot price today is $1,286.30 US via Kitco
The price is dipping a bit because investors are waiting for the results of a Fed meeting where people think there will be a delay in raising interest rates — which Jim Rickards predicted.
Singapore Dollar Is Weakest Since 2010 via Bloomberg
Singapore unexpectedly weakened their currency and joined the currency wars.
China’s Yuan Joins Top 5 Most Used Global Currencies via Kitco News
The yuan is no longer sitting at the kids’ table.
Russia to Respond to Possible Disconnection from SWIFT via TASS Russian News Agency
Russia says their economic reaction and “generally any other reaction” to being restricted from the international monetary transaction system will be without limit and will sever U.S Russian ties.
Kazakhstan’s Central Bank Buys All Gold Produced in the Country via Tengri News
Kazakhstan builds their gold reserves with a law saying they buy all the gold their country produces — 22 tons per year.
Gold Manipulation? ‘No Sign, Case Closed,’ Says German’s BaFa via Bullion Vault
There are replacements coming for the London Fixes, and benchmark “forwards” are ending this Friday.
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© 2014 Intelligentsia Media Inc. All rights reserved.
SOCAN/ASCAP
from the album Preparing for the Fall available on iTunes
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© 2013 Intelligentsia Media Inc. All rights reserved.
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