Jim Rogers on China and Global Investment

Video Transcription:

  Jim Rogers on China and Global Investment

MATT MILSOM: My name is Matt Milsom. I'm here on behalf of Real Vision to interview Mr. Jim Rogers. Welcome, Jim. Thanks for having us. JIM ROGERS: I am delighted to be here. MATT MILSOM: We're hoping to hear your views today on the economic situation in Asia, and the situation between China and the States in the trade war, what's going on in Hong Kon and maybe in a few thoughts on the macro world in general at the end, if it's possible. JIM ROGERS: Well, my advice is why don't you watch Real Vision? You can get the answers to all those questions, and you and I can go drink beer. Why are you asking about all of that? MATT MILSOM: That Hong Kong situation in Hong Kong, how you see it developing from here? JIM ROGERS: Well, I don't pay that much attention because I think it's all going to blow over eventually. China seems to be handling it very well. It's already smarter than most people, most governments, handle things like that. The best result is probably going to be that people should buy Shenzhen or Singapore, because money, some money will certainly leave Hong Kong. Shenzhen has a huge industry of its own. They're a gigantic technology city, as you know and it's very easy to get out of Hong Kong and go to Shenzhen. Secondly, people are going to be worried about the future of Hong Kong, rightly or wrongly, and Singapore is a logical destination, the logical alternative. Even if it doesn't leave, in the future, people, when they think about Asia, they're not going to think about Hong Kong, most of them, so they're going to come to Singapore, Shenzhen or just buying some other place. I think the future of Hong Kong is continued decline. The only reason Hong Kong became Hong Kong was because of 1949, in Mao Zi time. Now, you don't need Hong Kong anymore. Shanghai was the largest financial center between New York and London before the before the war, Second World War and China's opening up so we don't need Hong Kong anymore. It's going to continue to decline. MATT MILSOM: You would expect the peg to go at some point, therefore, in that-- JIM ROGERS: I certainly would. When the renminbi, the Chinese currency, is convertible, yes, I would expect the Hong Kong dollar to disappear. Who needs it at that point? It's an extra expense. It's an extra problem. It's an extra everything. Right now, the renminbi is not convertible, not fully convertible so they're going to keep the Hong Kong dollar. No, I would expect it to disappear, not just to drop the peg to the US dollar, it's going to disappear. MATT MILSOM: Completely? JIM ROGERS: Yeah. Why? Who needs some extra expense and extra hassle. MATT MILSOM: In terms of the size of the actual country borders, it wouldn't be that much of it, it wouldn't be a big ticket relative to the actual currency of the Mainland? JIM ROGERS: I don't know, it would not be. They would barely notice it. That's it. Shanghai used to be the financial center and it will be again. Certainly, will not be Hong Kong. MATT MILSOM: You think the currency is now being weaponized in terms of renminbi and how it's been moved above 7. Over time, it got a bit of a rally at the moment of pre-October 1 st -- JIM ROGERS: Any country, which has hundreds of billions of dollars of sanctions or tariffs imposed on it, the currency is going to go down, period, full stop. It's not just the Chinese, the Chinese are apparently letting it go down and not trying to control it. Anybody who has that x chopped on it is going to be affected, because it theoretically is going to hurt your trade balance of trade very seriously when you have those tariffs imposed. Maybe China's saying, "Okay, we'll let it go, we're not going to stop it." To try to stop a currency declining when you've had hundreds of billions of dollars of tariffs hitting you, you have to be affected. To try to stop that decline would cost gigantic amounts of money. I'm talking basic economics, I'm not talking about China, US, anything, I'm talking about basic economics. MATT MILSOM: You think that weakens over time, without a doubt? JIM ROGERS: Weakens over time. As long as those tariffs are imposed, certainly, it's going to weaken the currency or any currency over time. MATT MILSOM: I guess the 25-year plan being to take away the dominance of the dollar. JIM ROGERS: There are already lots of people trying to do something about the dominance of the dollar. As you know, if the US gets upset with you, they slap you. They just stop you using the US dollar, or they stop you trading the US dollar, which many people say, "Wait a minute, this is supposed to be the international currency. That's not an international currency if it can be stopped by one nation." The US is now the largest debtor nation in the history of the world. No country in history has ever been this highly and debt. The US dollar has got very serious fundamental problems, and emotional and psychological problems, political problems, I guess we should call them. People are already-- the Chinese, the Russians, and the Brazilians and other people are coming up with an alternative currency and an alternative banking system to the IMF and up to the World Bank, and to the clearing system. There's already a movement afoot to eliminate the dominance of the US dollar. The fundamentals are certainly against it, just as they were against the Pound Sterling, once upon a time and other currencies. Now, you have political and psychological forces trying to do change that. It was going to happen. I own a lot of US dollars, but my expectation, my plan is, it's going to get overpriced in the next term or might even turn into a bubble. At which point, I'm going to sell my US dollars, because that's going to be the end of the real dominance of the US dollar. MATT MILSOM: That could be a 10-year. JIM ROGERS: No, I don't think it'll be 10 years. It could be 10 years, it could be 30 years, who knows? I'm not very good at market timing but I would expect it to be in the next period of turmoil, which will be coming in the next two or three years. MATT MILSOM: Recently, China struck the oil deal with Iran, doesn't seem to be making a lot of headlines but it strikes me as a big story given they're able to pay in their currency at a massive discount as possible. JIM ROGERS: It's part of what I just told you about, that people are already trying to do something about the previous serious dominance of the US dollar. You already have two big countries, Iran's got 80 million people or something and China's got 1,000,000,003. They are already eliminating the US dollar, which would have been unheard of 20 years ago. Even with those two countries, it would have been unheard off 20 years ago, but now it's happening. Russia and China are starting doing the same sorts of things, which would have been impossible. It wouldn't have even known how 20 years ago, but now they're figuring it out and they're doing it. MATT MILSOM: I guess one belt, one road is all a part of that plan. JIM ROGERS: Yes. I'm not sure that they-- my view, they're probably independent. The elimination of the dominance of the US dollar is Path A, one belt, one road is Path B, but they happen to work together. Yes. MATT MILSOM: $17 trillion now of negative yielding debt. JIM ROGERS: Never happened in world history, Matt. It's absurd. It's a bunch of misguided bureaucrats and academics who don't know what they're doing. They're hoping this has never happened in world history. Never in world history has this happened and it's going to be a gigantic disaster for all of us. MATT MILSOM: How does it end? JIM ROGERS: Badly. No, bankruptcies. There are many states and cities, not just in America. Germany, Germany's got cities that are in trouble. Forget, we haven't even talked about Spain yet or Italy or some of the other places. No, many places are going to have serious problems. Once interest rates go back to normal, it's going to cause a lot of, lot of bankruptcies and problems around the world. MATT MILSOM: I just don't see how they can. JIM ROGERS: They cannot, no, they cannot. It is physically, economically, any word you want to use, impossible. MATT MILSOM: For rates normalize? JIM ROGERS: Yes. Well, they can normalize but somebody's got to pay a serious price. We're not going to sit around here with negative interest rates over the next 30 years. It never happened. The reason it cannot happen, anything can happen, but it's not going to happen. MATT MILSOM: All of those numbers, that's all outside the States, pretty much? JIM ROGERS: Well, you say outside the States, it's hard for everything to be outside the States with $17 trillion US. The States is involved, whether we like it or not, because everybody's involved-- Germany, Japan, these are big, big economies we're talking about. America cannot escape the effects. MATT MILSOM: Let's say we've got a quiet period ahead of us. I would have thought given the 75th anniversary of the PRC. JIM ROGERS: We do have a quiet period ahead of us? MATT MILSOM: In the next three weeks. JIM ROGERS: Three weeks, oh, maybe three days. Okay. Maybe three weeks. MATT MILSOM: Up to October, the Golden Week, let's say, first of October. I think beyond that, the potential for the proper weaponization of the currency and the actual renminbi to properly move starts to rear its ugly head. JIM ROGERS: Well, you're exactly right, but that's probably-- that's more Washington, DC. Washington is the one who keeps banging away at this. MATT MILSOM: You think they're right to? JIM ROGERS: I think they're right to? MATT MILSOM: Yeah. JIM ROGERS: Well, first of all, I've never known a trade war to be right. I've never known anybody who wants a trade war, I've never known a trade war to be good for anybody, anytime in history. Now, Mr. Trump knows he's smarter than history. He doesn't have to worry about that, because he's smarter than history but history would indicate that he's not right. It is going to be a problem one way or the other. We've always found ways to sort out problems like this. I cannot find it. I'm sure there must be. Anybody complaining that the Chinese have stolen their intellectual property, Congress had a hearing recently, they couldn't find anybody, couldn't find it to verify. MATT MILSOM: Who was willing to say it? JIM ROGERS: Or who was willing to say it. Yeah, maybe that's it. Maybe they're saying they've been stolen but they didn't want to tell Mr. Trump, they didn't want to help him. Be that as it may, yes, Chinese companies come to America, American companies go to China, they start doing business in those countries. They have to take their production methods. If you're General Motors and you start producing somewhere else, you're not going to leave your production methods back in America, you have to take them with you. Is that stealing or is that just a normal course of business? There are people who are in favor of trade war who's saying that the Chinese are thieves for intellectual property, and I'm sure they are. I'm sure there are some, but not worth this. When America took over from the UK, the Americas destroyed the UK shoe industry, the UK tailoring apparel industry, totally destroyed it. You think we weren't taking their knowledge, or in today's services, that we were stealing their intellectual property? We were, but that's the way the world works. MATT MILSOM: That's competition. JIM ROGERS: That's competition. Yes, that's movement of capital. That's movement of people. That's the way the world has always worked, and always will. MATT MILSOM: Let's say we're in a world of eight or nine to the dollar in terms of renminbi. I'm assuming we're thinking massive deflation, bankruptcies galore in north Asia, competitive admonitions-- JIM ROGERS: Bankruptcies galore in the world if that happens. China has said, Beijing has said, they're going to let people go bankrupt. It's not like America. Well, we never let anybody go bankrupt. London, we prop up everybody. Tokyo, oh my God, we prop up everybody but China, communist, that they are, so we're going to let people go bankrupt. If they fail, too bad. That's how capitalism works. I don't know if they mean it. I don't know if when it happens, if they'll really let people go bankrupt. They've started, some are going bankrupt. You're going to see it. When it happens in China, it's going to shock a lot of people, including me, I just told you it's coming. It's a lot of other countries and companies are also going to have serious, serious problems with that thing. It's going to make China much more competitive to the rest of the world. That's going to have big effects on a lot of places, including the debt markets, where a lot of debts are written in US dollars. MATT MILSOM: Given the amount of indebtedness in China, per se, as a multiple GDP, you'd think that they'd have to create massive inflationary wave post that deflation in order to float away the debt, eventually. JIM ROGERS: It's not just China, the US is the largest debtor nation in the history of the world, the UK is mindboggling how deep in debt as a percentage of GDP the UK is or many countries. You get out the statistics and you cannot conceive that anybody could get that deep in debt. Japan, Japan's got staggering internal debts. We all do. It's not just China. Sure, you're going to have bankruptcies in China. I'll remind you that America became the most successful country in the 20th century, but along the way, we had 15 depressions, massacres in the streets, very long rule of law, this horrible civil war. Yet, we still became the most successful country in the 20th century. China's going to have a lot of problems, but I'm teaching my children Chinese. I'm not teaching them in Danish. MATT MILSOM: Where do you see the Sing dollar going through all this? JIM ROGERS: Well, the Sing dollar, like all currencies, is going to go down against the US dollar, because the US dollar is going to go much higher. Singapore doesn't like to talk about its debt but Singapore has debt, too. The IMF says that the Singapore debt is over 100% of GDP. There is serious debt here. Now Singapore would say yeah, but we got a lot of asset, too. They do. There's no question about that. Once interest rates start going higher, normally, your debts get worse and your assets don't get better so the Sing dollar is going to suffer too, but it's mainly because the US dollar is going to be so strong in the term that people look for a safe haven. People would think the US dollar is a safe haven, it's not. The fundamentals are horrible. Nobody in his right mind would buy the US dollar, but I own a lot out. I'm not in my right mind. I'm assuming that the rest of the world is not in its mind either, and they're all going to buy it for [indiscernible] reasons. MATT MILSOM: Where do you go when that dollar blowoff happens? JIM ROGERS: You want to know how to get rich in 30 seconds? My plan, probably, the renminbi may be convertible by the end, the Chinese say it will, who knows? If it is, it will be down a lot because people would be dumping it. We presume to get out. My dollars will be high, the renminbi will be low and I will go from US dollars to renminbi and/or gold also often goes down when the US dollar gets very, very strong and financial markets are in turmoil. I'll sell some of my dollars and buy renminbi, sell my dollars and buy gold. It's very easy to get rich. We just did it in a few words. MATT MILSOM: 40 seconds. It's a good plan. Gold is still-- you were not a gold bug, but you've always been there. JIM ROGERS: No, I own gold, I've own gold for a long time. I first bought my gold in 1971. It was illegal for Americans to buy gold in 1971, but I did. I went up to Canada, I went to Switzerland, to Canada and bought a little bit of gold. Listen, it's tiny. I didn't have any money at those days, but even the tiniest little money I had, I bought a little gold. I've never sold any gold since 1971. I've continued to buy it over the years. Not a lot in recent years, I started buying more this summer, because I could see what was happening, but no, I still own plenty of gold and silver. MATT MILSOM: I guess the fact that it doesn't yield much or anything doesn't bother anyone now. JIM ROGERS: Bonds don't yield anything either. Most things don't yield anything these days. MATT MILSOM: The yen, it's still seen as a safe haven? JIM ROGERS: It is seen as the safe haven. Not by me, but it is. It's like the US dollar. The US dollar is not a safe haven but people think it is and that's the status of the yen as well. To my shock, I have had two number one best sellers in Japan this year. It's a mistake, but I have and both of them talk about-- the second one is called, "A Warning to Japan," and I talked about this place is going to be a disaster. If I were 10 years old, I would emigrate or I'd get a AK47 and start learning how to defend myself. Death is going up every day, staggering death every day, the population have been declining since 2010. This is not a good scene, not a good scene for the future but many people think just like they think about US dollar, they want to be there. I don't, but I am in the US dollar. MATT MILSOM: In terms of equity markets, per se, in particular--? JIM ROGERS: It's hard for me to find places to buy now. I don't own any US stocks. It's near an all-time high. If I buy anything, it's Russia. Buying a Russian stock as we speak. Nothing in China but I always looking in China. These markets are down. I prefer to buy low and sell high or trying to buy low and sell high. It's difficult for me to find anything. Venezuela is illegal for me. I'm an American citizen. I'd like to buy in Venezuela, but I don't want to go to jail. I'd rather be poor out of jail, than rich in jail so I'm not buying that. I cannot buy a North Korea, I would love to buy a North Korea but I'm a citizen of the land of the free. We're not very free in the land of the free so it's hard to find things for me these days. I've bought a few shares of Zimbabwe recently. That's another disaster, but it's still legal. I think it's still illegal for me to buy shares in Zimbabwe, but it's hard to find a place. MATT MILSOM: I just wonder whether this argument of there being no alternative with that amount of debt that's yielding negative, does it drive an equity market into an insane blowoff top? JIM ROGERS: That's why I don't have big shorts at the moment because that may very well happen, especially if the US dollar becomes more and more attractive to people psychologically? Yes, it could very well happen. MATT MILSOM: You see negative rates in the States, perhaps? JIM ROGERS: I see perhaps, yes, I certainly perhaps see them. Those guys don't know what they were doing. When Bernanke was there, he said the US Central Bank, Federal Reserve, can buy anything it wants. We can buy gold mines, we can buy businesses, we can buy shares, we can buy bonds, so they haven't even started doing it with shares yet. Japanese Central Bank everyday prints money and buys ETFs. US hasn't gotten there yet but Bernanke said there's no reason we cannot. MATT MILSOM: I just think they shouldn't be ultra vires, they shouldn't be allowed to trade equities. JIM ROGERS: You've got a sound sense of history and a sound sense of economics. That's a problem in 2019-2020, people like you and me. Nobody wants to listen to people who are sound. MATT MILSOM: Well, I guess the States is not doing it yet, but Switzerland, as you say, Bank of Japan. JIM ROGERS: Switzerland, when I was a kid-- MATT MILSOM: They weren't even buying Swiss equities, they're just buying Apple. JIM ROGERS: No. The Swiss National bank, which when I was a kid, owning Swiss Francs made me feel so safe and secure. Now, the Swiss currency is backed by Apple, it's backed by Google, Microsoft, Facebook. The Swiss Central Bank is backed-- the Swiss Franc-- with Facebook. MATT MILSOM: Not a lot of people know. The BOJ and the SMB, they're listed. They're listed stocks so you can see the fact that they've long American tech sector because the S&P price is going up. What are you doing with it? JIM ROGERS: They are very reluctant to talk about it. They don't like to reveal how much they've done. No, no. Somebody there is a bit embarrassed. I'm not the only one embarrassed, somebody in Switzerland is embarrassed about what's happened. MATT MILSOM: How are they allowed to do it? I just don't get it. JIM ROGERS: Well, Bernanke says weaken it. He says, "America Central Bank, you do it." I don't think there's any prohibitions, nobody thought to write them down 50 years ago, 100 years ago, that oh, by the way, you cannot buy Apple, you cannot back your currency with Google. MATT MILSOM: With another currency stock, if you're buying Swiss stock, maybe. JIM ROGERS: As far as I know, there's nothing in anybody's charter which says you cannot buy anything. Bernanke said we can buy anything. We, the Central Bank in America. MATT MILSOM: I just don't see it happening in the UK, for example. Maybe I'm a snob. JIM ROGERS: What? MATT MILSOM: I can see them giving out money, but not buying stocks. JIM ROGERS: There's not much difference, but okay. Maybe the UK, yes, it is one of the older and historically, one of the sounder central banks. Maybe they remember, but there's such gigantic debts there. If Scotland leaves, well, Scotland's got the oil. Scotland's not going to say, "Okay, you can keep the oil. We're going to leave and join the EU, but you keep the oil." When Scotland goes, it's already mindboggling. If they don't have the oil, I don't have anything to sell anyway, at the English language. There's one more competition for that. They don't have triumph motorcycles anymore. MATT MILSOM: Tourism. That's all they've got. JIM ROGERS: Yeah. Well, they've got tourism, sure, but in the end, the town will go down a lot and that will make it cheaper for tourists. That's not going to save them. MATT MILSOM: What does it take for the central bankers to realize that negative rates are a bad thing? JIM ROGERS: Catastrophe. The only way it's going to happen is catastrophe. MATT MILSOM: That means initially, I guess the European banking system and Europe, the euro-- JIM ROGERS: Lots of bankruptcy, maybe even central banks go bankrupt. These things have happened before. It's not outlandish for a nation to go bankrupt, or banks to go bankrupt or even central banks. There's nowhere. Even 30 years ago, you, even though you're knowledgeable and educated, you probably could not have named many central bankers. Most people in the world had no idea that there were central banks, much less who they were. Now, everybody knows. Every everybody even knows Ben Bernanke and he's not even there anymore. Everybody knows the names of these people, because they've become godlike. Everybody assumes that Alan Greenspan knew everything. A guy wrote a book about Alan Greenspan called, "Maestro." Oh, my God, and he was an educated reporter who wrote that book as though Greenspan knew what he was doing. Greenspan didn't have a clue. Greenspan is more than ruining the world. Well, not more than most people, well, more than most people. He did his share. MATT MILSOM: If you're in a competitive situation in your currency, how can you not let your rates drop? Even though you want to, it takes somebody to stand up and say, "I'm going to have a positive interest rate. It's going to be better for my banking system." The rest of the world, is your currency is just going to go bananas, which is what he says. JIM ROGERS: History shows that governments have gone bananas many times and done unbelievably foolish things. Histories replete with bureaucracies and politicians and governments, have done absolutely absurd things. You think it can't happen again? Of course, it's going to happen again. MATT MILSOM: You'd rather see Sterling out of-- you think Brexit is a sensible thing for the UK? JIM ROGERS: Well, I'm not a voter in the UK but what they should have done was vote to abolish Brussels. Brussels is the problem, the EU is not the problem. The euro is not the problem. The problem is and was Brussels. I used to speak with Nigel, the guy who did all this, and I said, "Nigel, no, no, no, vote to abolish Brussels," but diplomacy. He couldn't do that. The British couldn't say, "Okay, we're going to have a European wide referendum and abolish Brussels." That's the problem. By the way, as you probably know, Brussels is now starting to lose its power in the EU, because more and more politicians and lunatics are saying Brussels is the problem. They're starting to lose power, relatively. What Europe should, England should stay in now and say, "Okay, we're going to stay in, and we're going to help control Brussels, because there's a lot of people in Europe now who are saying we got to do something about Brussels." That's the problem. It's not the EU, it's not the currency. It's those unelected, absurd bureaucrats who don't know what they're doing, but they tell you what to do, and you have to do it because you're a citizen. MATT MILSOM: Do you see-- I know there's a lot of promotion of Ray Dalio's thoughts around the parallels of now to the '30s rhyming a little bit with previous history, do you see a similar situation? JIM ROGERS: Well, I don't know what Ray said but if anybody who can read history knows that there are many, many similarities now, oh, my gosh, countries becoming bankrupt or becoming deeply in debt, countries being protectionists, countries starting to close off-- this has all happened before. It certainly happened in the '30s. You know the rest of the story, you know what happened there, but Mr. Trump is smarter than history so we don't have to worry. Mr. Trump knows he can handle history and none of us should worry, because he's smarter than history. Even though people say trade wars are bad, and often lead to shooting wars, don't worry, I'm smarter than history. MATT MILSOM: He does seem to be able to just move to the next person once he's had-- go at somebody then it slackened off, just goes to next target is going to be Europe, once he's done with China, even though nothing's actually resolved. JIM ROGERS: The problem, Matt, is that when things get bad, so far the American economy has held up well because of a lot of money printing, out of government spending, cut taxes, everything possible to hold up the American economy has held it up. When things get bad in America as they will, Mr. Trump is not going to say, "It's my fault. I got it wrong." Donald Trump is going to say those evil Germans, those Koreans, those Canadians, and he's going to come back hard with more and more whatever you want to call it. The situation, we're going to have the worst bear market in my lifetime. I can tell I'm older than you, so it's going to be the worst in your lifetime, too. What I suggest you do is watch Real Vision, and you'll get educated, and you will see how bad things are. Then you'll get there. Most people will turn on the internet or turn on the TV, say, "Wow, look at this. Things are great." Mr. Trump tells you every day, if you watch American TV, he will explain you things are really, really very good. You don't worry. Maybe you need somebody crying wolf, maybe you need somebody saying, "Wait a minute, guys, wait a minute. Look at this." Maybe Real Vision is the last vision for all of us. MATT MILSOM: You think he gets back in? JIM ROGERS: Get back into what? MATT MILSOM: Trump 2020? JIM ROGERS: I got to respect you, what I think it's-- I know it's very hard to dislodge a sitting president in America for many, many reasons. I would suspect that's the same to this time. Now, we got rid of Coolidge, and Hoover. We got rid of Hoover because the market collapsed but we don't have much time for that because the election is only, what, 13-14 months away now. If the market really collapses in the next 13 or 14 months, then I would change my view, but there are enough things he can do, which is why it's hard to get rid of sitting presidents. They'll prop things up long enough to get through the election. I would, if I were betting and I'm not a betting man, but if I were, I would bet that Trump will be reelected. MATT MILSOM: A lot of speculation that he might actually start to swerve the Fed and play the currency markets himself for the Treasury. JIM ROGERS: What, Trump will start buying what? US dollars or renminbi? What's he going to buy? MATT MILSOM: He's going to be selling dollars. JIM ROGERS: He could do that. Yes, and he might. He cannot force the Fed to do it. No, but he could, he could browbeat him. He can certainly force the Treasury to do that, to sell US dollars. First of all, I'm not sure the market would put up with it, it would for a while, obviously, it would for a while, but eventually, the market, as I said to you before, I mentioned the market's going to say to these guys, "We're not going to play this game anymore. This is an absurd, ludicrous game. It's never happened before. We know it's not going to work. We're not going to play anymore." Okay, maybe we'll try. I don't think it's enough. Maybe it's enough to save the election, I said to you before. It's so difficult to dislodge a sitting president. There are lots of things he can do. If he needs votes in that state, he spends a lot of money in that state. His opponent cannot do that, the opponent can say look, what a terrible person he is. He's spending money in your state. The people say, thank you, thank you spend more money in my state. We'll vote for you. MATT MILSOM: He can almost play the Fed to his own fiddle, I guess at the same time. He can blame them if it goes-- JIM ROGERS: He certainly can blame them, whether he can persuade them. He seems to be persuading them now is another question, but sure. That's what I mean, if he goes in there and threatens them, or does x or does y, sure he can. That's the problem when you're the president, or the advantage when you're the president. MATT MILSOM: I see Powell's having a bit more backup by myself. I just think he's his own guy. Really, he's not a PhD Economics. He's a-- JIM ROGERS: That's the best news. I believe PhDs, which is bad news. We'll see. MATT MILSOM: I could see that arising a bigger conflict there, you think between Powell and-- JIM ROGERS: No, I can see a huge conflict and that's going to-- the Federal Reserve, its debt went up by five, six times in 10 years. If I had said to you 20 years ago, a major central bank in the world is going to increase the debt on its balance sheet by 500% in 10 years, you're going to say, "Get out of here. We're not going to talk to you anymore. You're not even smart enough to talk on TV. What are you talking about?" It's inconceivable that it could have happened, but it's happened. Sure, they have a problem, too. How far can they go? How far can any of us go? MATT MILSOM: It surprised me the volatility's so cheapened right now. JIM ROGERS: The debt worldwide is the highest in world history. Interest rates are the lowest in world history. In 2008, we had a big debt problem. China, which had a lot of money saves for a rainy day, started spending the money and helped save the world, but even China now has debt. China can't save the world anymore. The central bank came riding in with its printing presses, helped save the world. That's getting late for all the printing presses in the world. It's getting late in the day. MATT MILSOM: Is the rate of change as well as a debt in China that's extraordinary just-- JIM ROGERS: Oh, no, I know. To repeat, ports in China has said we'll let them go bankrupt. I don't think they will. Not that they're lying, I think they believe that they're going to let people go bankrupt but they haven't had this problem in decades. They're bureaucrats and they're academics, haven't felt the pressure of people calling up saying, "You must save Chinese civilization. This is Chinese history, our image our integrity." No, they haven't had that gigantic pressure from everybody in the country, they're saying, "Save Chinese civilization." What they really mean it save me. They haven't had that yet. MATT MILSOM: Xi as a link leader seems to be much more of a Maoist than ever before, to me. JIM ROGERS: I'm not sure Maoist, but they're certainly closing off in that sense. Yes. Deng Xiaoping started opening up and Deng Xiaoping said you open the windows, you're going to get some flies, but you're going to get fresh air and sunshine, and the fresh air and the sunshine are worth the flies. He seems to be saying we don't want flies and the last 40 years, much of the progress has been 18-year-olds in a garage doing crazy things on the computer. Alibaba, Microsoft, the names go on, and on and on. These were just kids doing wild, crazy things on the internet, which was open and free to nearly everybody. You start closing these things off, and it's going to slow progress, it's going to slow things now, whether we like it, history is always showing that. You close off and you go into decline. It does seem to be happening not just in China, even in the US, but it does seem to be happening more and more, so maybe we're in for the dark ages again. MATT MILSOM: I don't know. It's almost that you think about where you're going to head or what currency you need to get into, where you're going to be safe. Do you know what I mean? You start thinking about-- JIM ROGERS: That's not what I mean. I don't have a job. I can't figure out a way to save myself. MATT MILSOM: You made the move to Asia on the back of those thoughts, I guess that that's going to be a Pacific centuries. JIM ROGERS: Well, I moved here you because I know that the 20th century is Asia, 21st century is Asia. I wanted my children to know Asia and to speak Mandarin. That's the best preparation I can give them for the 21st century. That's why I'm here. Of course, Asia is continuing to develop and boom and head of the rest of the world. There is some debt in Asia, but nothing like in the West. Most of the Western countries are really broke, especially when you pull into pension plans. Europe's got gigantic pension, US too, gigantic pension obligations, which they'll never able to [indiscernible]. MATT MILSOM: Yeah. Demographically, where does that end up? JIM ROGERS: It's already starting to ruin a lot of people. Asia has probably-- will have problems but nothing like some that are rising in the West. I can't bear for my kids. MATT MILSOM: The world of agricultural investment view is still a-- JIM ROGERS: Yeah, agriculture has been a disaster for 35 years or so. The average age of farmers in America is 58. More people in America study public relations and study agriculture. The highest rate of suicide in the UK is agriculture. Of Japan, the average age of farmers is 68. Nobody becomes a farmer, you go to Japan now, there're huge stretches of land, they're just empty. They can't find anybody to farm them. Farmers have died, the kids have gone to Osaka. There's nobody to farm that land. If you want to be a former, go to Japan. You can get a lot of land cheap. That's true. Australia, Canada, all of these countries have very, very aged old farmers, men and women. It's millions of Indian farmers have committed suicide, as I'm sure you know. No, no, agriculture is a disaster. The Chinese have a word, you know the Chinese word weiji? It means disaster and opportunity are the same and they are. If you can survive the disaster, you're going to make a lot of money with the opportunity. MATT MILSOM: I guess the commodity complex per se, are softer on their knees-ish for the last five years. They're actually doing okay in the States. JIM ROGERS: Yeah, yeah. Things like sugar, sugar is down over 80% in the last 40 years, what do you notice down 80% in the last 40 years? My IQ. Other than that, there's not much that has declined, that deteriorated like some of the agricultural products. MATT MILSOM: Difficult bet to make given the climate change, too? JIM ROGERS: Well, yeah, climate change is taking place, is taking place for thousands of years. Go back and look at trees, and soil layers and iceberg layer, we see that climate change has always been taking place one way or the other, and it seems to be happening again. Of course, that's going to be great for some farmers, disastrous for other farmers. The key is to be the farmer that it's great for, not to be a farmer that gets wiped out because of climate change. The Sahara Desert, which is the size of the continent with 48 states, used to be a huge agricultural area. Pigs, cows, wheat, corn, everything, huge, huge. We had climate change. We had ecological change, you know the rest of that story. If you were a farmer in Algeria 2000 years ago, you probably didn't do very well. You should have moved to Iowa 2000 years ago. MATT MILSOM: Would it be too much to ask your asset allocation now? JIM ROGERS: You can ask, I don't know. I don't sit around. I don't have a committee met. I don't have anybody to answer to. I know I can still pay my bills. I do own some gold and silver. I do own a lot of US dollars, I've told you about. I'm short some junk bonds, short the ETF, Russia, China. I don't own a lot of shares anywhere right now. The Japanese market, I sold out of. I used to own a lot of Japanese shares, sold out completely. MATT MILSOM: Why was that? JIM ROGERS: I bought them so well. It's not often I get it right so I'm going to brag for a minute. The Japanese market was very, very cheap and I started by and then the tsunami. Remember the tsunami? Everything collapsed, I bought a little, gone up a lot, it tripled since then. I could see wasabi and the toll got stronger and stronger and stronger. They'd already printed lots of money. The central bank said we'll print as much as we have to. That's what they said. They said it out loud. Not some crazy guy saying it. I said what else can happen? What else can go right? They've spent a lot of money on infrastructure. They bought a lot of securities, so I sold out. So far, I'm right, but don't worry, I make plenty of mistakes. MATT MILSOM: I guess, it changed your beast, don't even trade anymore, eh, because there's no float? JIM ROGERS: Nothing to trade, why would you buy them? Who's going to buy them, except a central bank? MATT MILSOM: They have to keep going? JIM ROGERS: I told you I have. I'm going to Japan tomorrow, there's been a best seller saying, "A Warning to Japan." If they keep going-- MATT MILSOM: That's a book? JIM ROGERS: Yeah. MATT MILSOM: Sorry, I didn't know that. JIM ROGERS: No, it's the number one bestseller. MATT MILSOM: Congratulations. JIM ROGERS: I'm shocked. I've made two number one bestsellers. MATT MILSOM: What was the other one? JIM ROGERS: I forget that, it was some Japanese. It was something like, "A Warning to Japan." MATT MILSOM: But this is a specific for that market, or they were-- JIM ROGERS: Two books in Japanese. They were translated, my English was translated into Japanese. Two books in 2019 have been number one bestsellers by me. This is a shock. How could this happen? I'm more surprised than anybody. They called me up, that smarty say you got to come to Tokyo. I said why? He said your books have won bestseller. I forgot about the book. The book resulted from some reporters coming here and interviewing me like you. We're out for several hours. I said we're going to publish this. Okay, go ahead. I don't care. Forgot about it. MATT MILSOM: You got a book tour now? JIM ROGERS: Yeah, I'm leaving tomorrow. I'm going tomorrow for a book tour in various cities of Japan, promoting, "A Warning to Japan." MATT MILSOM: What was the essence of that? Was that demographics or that-- JIM ROGERS: If you're 10 years old, you better get out. If you're 10 years old, you better get an AK47 and learn how to use it. These are not-- it's simple. I say to them, they will say, of course, he's a foreigner. Don't worry. The Japanese don't like foreigners, and so they will just say, he's a-- whenever they say they don't like somebody, they say he's a foreigner so you don't have to listen to him. I say to them, yeah, okay, I'm a foreigner, but this is arithmetic. It's addition, the debt goes up every day. That's simple addition and it's subtraction, the population goes down every day. Central bank has been printing huge amounts of money. This is just simple addition and subtract. Forget that I'm foreigner and for some reason, both of them became number one bestsellers. I guess it's because nobody in Japan ever says things like this. I don't know why I became, but listen, I'm shocked. MATT MILSOM: Do you have any views on Softbank? JIM ROGERS: So far, they've made a lot of money but I don't know enough to say much more than that. I read that problems are developing, but I have no knowledge, enough knowledge to say anything other than that. MATT MILSOM: I guess WeWork is the speculation for those issues there, for the float. JIM ROGERS: WeWork is not their only asset at Softbank. What I read about WeWork, WeWork may be one of those things. You remember in 1999? I think it was called pets.com or something. It was one of those things that was when people talk about the end of the bull market or the signal, or the sign that it was over, that may be WeWork now. They were printed out in 1999. That's the one that people often bring up, I was not sure. I wish I had but they bring that one up. Now, if you look at the current bull market, maybe someday in 10 years, we're all going to look back and say, "They rang that bell. That bell was called WeWork. That was the sign that we were coming to the end." It's always something that people look back on that it may be WeWork. MATT MILSOM: The amount of questioning that browned the IPO pricing makes you think that the greater fool game may have just come to a grinding halt. JIM ROGERS: I've never read the Prospectus but I've read a lot in the papers about the story, the company, that IPO, the CEO, etc. Just I'm sure you have too. I read it and I say this is 1929, this is 1999. This has all happened before. MATT MILSOM: They have nines in them. JIM ROGERS: Yeah. See, 1899-- well, anyway, you read, I read this stuff and I'd say oh, yeah, this has happened before. I remember reading about things like this in previous bull markets, previous bubbles. MATT MILSOM: What brings you to an investment then? Is there a sector or there is an idea or somebody pitches to you? JIM ROGERS: No, it's usually-- the nature of who I am, I'm always looking or I'm always listening. If I stumble on something, I'm not out looking like I used to, but if I stumbled on something, I often do homework and then I'm in this Russian stock that I'm buying, I stumbled on it. The more homework I do, the more I buy. I continue but it's usually I will stumble on something. MATT MILSOM: Public, is it a public stock? JIM ROGERS: Yeah, it's a public company. MATT MILSOM: Sector? Which sector would have been? JIM ROGERS: You're a very good reporter, but I'm not going to tell you because if I told you, you would know exactly what I'm buying. MATT MILSOM: Okay. I'm sure it wouldn't be that easy to spot. JIM ROGERS: There are plenty of disasters in Russia. Everybody hates Russia now, so Russia's on my list. Anyway, I will probably buy Russian government bonds and rubles again soon. I own Russian government bonds in rubles. The yield is very, very high. The ruble is hated. The Russians are hated, et cetera. MATT MILSOM: Any other markets that are particularly hated that you fancy? JIM ROGERS: Well, I told you Venezuela but you and I cannot do it. I cannot do anything in Venezuela. Zimbabwe, I bought a few shares of Zimbabwe, some of the North Korea but that's illegal, too. I'm looking, but part of the problem is there are few markets that are hated so much. I mean I am buying Russia, it's still hated. Most markets, even Germany. Look at Germany hit peak, what, two years ago. Been going out since but it's not cheap. It's not hated. Germany still a very large and [indiscernible] economy. No, I don't see many now that jumps off the page to me and says, oh my God, you got to buy this disaster. I would love to find something like that, but I'm too lazy. MATT MILSOM: I'm thinking there's probably a good places to stop. JIM ROGERS: I'm too lazy. Very good places to stop buying, I commend laziness to all of you. Watch Real Vision and get lazier and lazier, and lazier. MATT MILSOM: Jim, thanks for having us and thanks very much for coming on. JIM ROGERS: My delight, my pleasure.