We talked, in a taped telephone interview at his home in Singapore, with Billionaire Jim Rogers, legendary commodities trader, who picked up the bottom of the commodities bull market in 1999. With George Soros, Jim Rogers co-founded the Quantum Fund in 1970.
Over the next decade, Quantum Fund grew by more than 3,300 percent. Rogers retired, later a guest professor of finance at the Columbia University Graduate School of Business, and still later circumnavigating the globe to firsthand discover new investment opportunities. He is widely and often quoted in the media about his views on the commodities market. Bestselling author, investment biker, adventure capitalist and broadly followed, Jim Rogers talks about what he's now investing in.
StockInterview: Is the United States heading toward the same demise as previous colonialists: England, France, Holland, Germany and even previous world powers, such as Spain and Portugal?
Jim Rogers: If all powers, which have risen, have ever peaked, plateau'ed, and then declined, we of the US certainly have things going on which would indicate that we are. I do not think anyone would dispute that we are a mature economy and a mature society. Whether we're still growing or not is another question. I see many factors where we're overextended financially, overextended geo-politically, and overextended militarily. I would suspect the US is in a plateau phase, and sometimes has even gone over the line and is in a decline, certainly on a relative basis.
StockInterview: Who, then, would replace the US? Russia, India, Japan or China?
Jim Rogers: Not Russia. No, Russia is a disaster spiraling down into a catastrophe. I see little hope for India replacing anyone. India is more likely to break up into a few countries in the next few decades than it is to become the world power. Japan has serious demographic problems. Japan's population is in decline for the first time in recorded history. Without something happens demographically in Japan, Japan is going to have huge problems in the next few decades. They've got gigantic internal debt, which somebody's got to pay off. With a declining population and internal debts rising, I think they've got serious problems. The only one I can see on the horizon is China.
StockInterview: What, then, will become of the US dollar?
Jim Rogers: The same thing that happened to sterling; the same thing that happened with the guilder. You know, the guilder used to be a great international currency. The peso used to be a great international currency. You do not see people using guilders anymore to settle their international debts or finance their wars. They decline and sort of disappear from the world stage. I would certainly get out of the US dollar. It's already losing its status as the world's reserve currency, as the world's medium of exchange. We in the US owe the rest of the world at least eight trillion dollars – that's trillion with a T – and it's increasing at the rate of one trillion US dollars every 15 months. There are serious problems in the US with the US dollar. I would not own US dollars if I were you.
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