Jim Rogers: We're Wiping Out The Savings Class Globally, To Terrible Consequence

Tyler Durden's picture

Submitted by Adam Taggart of Peak Prosperity,

Jim Rogers decries the growing uncertainty and recklessness of global central planners as the world enters unchartered financial markets:

For the first time in recorded history, we have nearly every central bank printing money and trying to debase their currency. This has never happened before. How it’s going to work out, I don't know. It just depends on which one goes down the most and first, and they take turns. When one says a currency is going down, the question is against what? because they are all trying to debase themselves. It’s a peculiar time in world history.


I own the dollar, not because I have any confidence in the dollar and not because it’s sound – it’s a terribly flawed currency – but I expect more currency turmoil, more financial turmoil. During periods like that, people, for whatever reason, flee to the U.S. dollar as a safe haven. It is not a safe haven, but it is perceived that way by some people. That’s why the dollar is going up. That’s why I own it. Will I own it in five years, ten years? I don't know. 

It makes it extremely difficult for the investor looking for acceptable risk/reward, or the saver looking to protect their purchasing power; as in Rogers' view, all options have their problems:

I own gold and silver and precious metals. I own all commodities, which is a better way to play as they debase currencies. I own more agriculture than just about anything else in real assets because of the reasons we discussed before. We were talking before about the risk-free or worry-free investment. Even gold: the Indian politicians are talking about coming down hard on gold, and India is the largest buyer of gold in the world. If Indian politicians do something -- whether it’s foolish or not is irrelevant -- if they do something, gold could go down a lot. So I own it. I’m not selling it. But everything has problems.

To Rogers, the bigger danger that concerns him is the hollowing out of the 'saving class' resulting from this situation. Central planners' policies are punishing the prudent in favor of rescuing the irresponsible. This has happened before in world history, and the aftermath has always had grievous economic, social -- and often human -- costs:

Throughout our history – any country’s history – the people who save their money and invest for their future are the ones that you build an economy, a society, and a nation on.


In America, many people saved their money, put it aside, and didn’t buy four or five houses with no job and no money down. They did what most people would consider the right thing, and what historically has been the right thing. But now, unfortunately, those people are being wiped out, because they are getting 0% return, or virtually no return, on their savings and their investments. We’re wiping them out at the expense of people who went deeply into debt, people who did what most people would consider the wrong thing at the expense of people who did the right thing. This, long-term, has terrible consequences for any nation, any society, any economy.


If you go back in history, you'll see what happened to the Germans when they wiped out their savings class in the 1920s. It didn’t lead to good things down the road for Germany. It didn’t lead to good things for Italy, which did the same thing. There were plenty of countries where it wiped out the people who saved and invested for their future. It’s usually a serious, political reaction, desperation in some cases, and looking for a savior and easy answers is usually what happens when you destroy the people who save and invest for the future.

Click the play button below to listen to Chris' interview with Jim Rogers (18m:59s):

Click here to read the full transcript

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Water Is Wet's picture

Nobody gives a fuck.

Xibalba's picture

said by a young man to an old one

DoChenRollingBearing's picture

+ 1

The Central Bank of DoChenRollingBearing's suggests:

1) Stop spending so damn much (individuals and governments)!

2) Save as much as possible in gold (preferred) or other hard assets!  Now!

3) Diversify as much as possible re above!

4) Avoid debt like the plague!

5) Invest $100,000 in our Peruvian 5% bonds (joke of course)...

6) Keep at least some fiat CA$H at home (in case of a SHTF), it will be accepted for a while...


Be part of the solution, not the problem.  Don't let THEM take away your money!

nmewn's picture

My full endorsement.

We accepted fiat for our labor, there is nothing saying that whatever is left of "saved labor" has to be saved only in paper fiat.

TruthInSunshine's picture

I agree with a lot of what JR is saying, but the counterpoint is that if one accepts that this can't go on forever, then inevitably, there will be a lot of irresponsible people/entities currently benefitting from what central banks are doing that get slammed so hard that it simply wipes them out.

The real question isn't whether this can last for a significantly longer time, IMO, but rather what sequence of events comes next because of what's been done for the last 4 years and is still being done - do we get an inflationary spike of such significance that it wipes out lenders/creditors who don't have direct access to central bank bailouts, or do we get a deflationary reset to purge the liquidity caused infection that wipes out debtors who don't have direct access to central bank bailouts - as the next big event.

And all of this presupposes that something fundamentally destabilzing won't happen to central banks as a result of existing monetary (and de facto fiscal) policies, as well.

History tells us that when economic events similar to what the world is experiencing currently take place, there is an attempt to change the fundamental "rules of the game" as an attempt to keep everything from completely imploding.

This works in terms of meeting that basic goal sometimes, even if there are many casualties, such as with Bretton Woods, the 1971 Nixon Shock, the Plaza Accord, etc., but if such coordinated action isn't successfully undertaken to extend what everyone knows is a Pyramid Scheme, massive economic disharmony always and ultimately leads the major nations adjusting their fundamental goals out of necessity or strategy, and it leads to actual war.

As a footnote, I find the recent movements in both the JPY and GBP fascinating, because of the role that currency valuation plays in global events, especially with those movements coming on the heels of so many meetings by the G7 (I should probably refer to the G8, instead) and G20.

disabledvet's picture

"and Jim Rogers ain't one of 'em." a gold bug decrying the loss of savers? REALLY? How bout a hearty "Phuck you Bill Gross!" instead? Not only would that be a needed dose of reality to this dog and pony show it would provide some good fodder for all us wannabe financial journalist types down here needing something to sell some threads. Throw me a bone here! I've been working this beat 4 years running now!

AllWorkedUp's picture

I've never heard Roger's even once say he's buying gold. Not once. It's always "I own gold but I think it's going down more - then I'll buy". He's been saying that shit since gold $1000. I guess it never goes down enough for him to start buying. I think he's right about agriculture and energy going higher, but he's no goldbug. He's a Soro's piece of shit underling.

 In short, Roger's is a shill. Bought and paid for.

India retailers don't dictate the price of gold. Central bank buying does. Right now China and Russian cb's dictate the POG. The first country to come out and back their currency with gold, silver or even oil instead of nothing like they do now, wins.

chindit13's picture

Depends on what the meaning of "wins" is.  Let's take India.  If they issue a gold-backed currency, will they suddenly invent everything?  Will the US hand India the keys to all America's carrier groups?  Will India have enough water to grow food in the north, and stop polluting the rivers it now has?  Will the Hindus get along with the Sikhs and the Moslems, and will the Thackeray-disciples in Maharashtra love the migrant Assamis or even the folks in neighboring Andhra Pradesh? Will the Naxalites throw down their weapons?  Will the 800 million who lack modern sanitation suddenly get those Japanese-style johns that play music (to drown out embarrassing flatulance) and have heated seats and a well-aimed squirter?  Will police finally investigate rapes, and the courts prosecute it, and beat that record of a total of ONE  (1) rape conviction in New Delhi (a city of 20 million) in all of 2011?

India probably has more gold (including public and private hands) than any other country in the world.  It is likely they always have.  Gold did not serve to protect them from getting invaded or colonized by the Kushans, Afghanis, Mughals, Brits, etc., nor has it put India on top of the world in terms of discovery, lifestyle, lack of crime and corruption, national security, child labor, equal opportunity for women and lower castes, etc.

If your "winning" is like Charlie Sheen's winning, you might be right.  For the rest of the species, winning takes a little more than building an economy and society around a lump of shiny metal.  It ain't magic, it's an element.

AllWorkedUp's picture

Yeah all good points. What they'll do is to garner investment. A strong currency is just a piece of the of the greater puzzle-no question. A weak currency is what will turn the U,S. into third world, unless we start launching nukes, in which case everyone loses.

Which country has gotten more corrupt in the last 100 years? Tough call.

Thanks for the response. I thoughrt I was getting down voted because I don't care for Rogers,

chindit13's picture

Economic as well as social advancement begins with discipline and creation of equal opportunity (then toss in a bit of luck, work ethic, curiosity...shake and pour).  If gold can help impose discipline in the monetary sphere, I'm all for giving it a shot, but I fear replacing one superstitious faith for another.  It seems better to go to the source of success, and not put strange gods before one and all.  Equal opportunity (plus the other inputs) is something altogether different.  A nation with a gold backed currency isn't going to draw investment simply because it backs its currency with gold.  To reduce to the ridiculous, let's say North Korea institutes one tomorrow, albeit it keeps the same legacy Dearer One and all his policies and vitriol.  They go nowhere just as fast as yesterday.

Ironically, in today's world, "debtability" seems to be a greater draw for investment. Witness the rush into Burma, a global outlier owing to its relative paucity of absolute debt that a host of folks are anxious to rectify.  A cosmetic and meaningless change here and there, and Burma's hotels are now filled with foreigners hoping to cash in on the country's debt build-up (I just wrote a piece on this which I might submit, though it probably has limited appeal and a small audience).

As for Rogers, he often makes good and amusing points, but his performance hasn't exactly set the world afire since he split with Soros.  He has become more an entertainer (and a good one) than a trader, and his typical advice about going long Egyptian flax, Keralan cardamom, or Zanzibarian 2-year paper is of limited use to most all investors.  I haven't a clue why you're today's designated outcast, racking up the red.  Just your turn, I guess, your fifteen minutes of infamy.  It's hardly fatal, so ignore it.

Archduke's picture

true.  the ZH readership's mob mentality is astonishing and ironic given its constant war waged on 'sheeple'.

critical thinking is its first casualty.  I suppose it's just the natural distribution asserting itself in a microcosm.


GetZeeGold's picture




Nobody gives a fuck - Water Is Wet


As surely as Water will wet us, as surely as Fire will burn, The Gods of the Copybook Headings with terror and slaughter return!


-Rudyard Kipling


King_of_simpletons's picture

I will be dead in 20 years due to natural causes. Should I give a crap ? Nah, let the charade continue to happen. Let somebody else worry about the consequences. Now pay me my damn social security and I will sock you with medicare bills.

Spirit Of Truth's picture

Jim Rogers confidence in America is well signified by how he moved he and his family to Singapore. 

francis_sawyer's picture

 A nation with a gold backed currency isn't going to draw investment


No ~ It'll just find its leader Khadafi-ed & gold stolen while nobody bats an eye about it...

Same will 'soon be' true with POPPY based currencies... [for anyone who fails to grasp the principle]


dwayne elizando's picture

Forget the petro dollar, we got the poppy dollar! Now take your prescriptions, jerks!

Brought to you by Carl's jr!

Freewheelin Franklin's picture

As for Rogers, he often makes good and amusing points, but his performance hasn't exactly set the world afire since he split with Soros. He has become more an entertainer (and a good one) than a trader...


That's usually what happens when one "retires".  


And if "success" is a measure of knowledge, then Dimon is near the top of that heap, rigth?


Croesus's picture


"A nation with a gold backed currency isn't going to draw investment simply because it backs its currency with gold."

My friend: Perhaps it is presumptive on my part, but I would say that a country which backs its currency with Gold would do a better job of restoring confidence to the market than our western CB's are doing. 

As the CB's compete against each other to "drown the world in paper", Gold remains the one asset that transcends time and has "value" in all cultures, races and ethnicities.


Oldwood's picture

Confidence is so yesterday. Today, belief in the fast buck is all that is needed. It appears there is a lot of betting on a line up of dead and dying horse in the gate. Gamblers understand any confidence is in their head and something to be used for rationalization purposes only.

Uncle Remus's picture

"(I just wrote a piece on this which I might submit, though it probably has limited appeal and a small audience)."

In the context of an MO then?

theprofromdover's picture

".. (I just wrote a piece on this which I might submit, though it probably has limited appeal and a small audience).."

I would read it; should be pristine example of how fast the bankers move. They have probably been sniffing around Burmese money since months before the lady was released from house-arrest.

Rogue Trooper's picture

Take is easy... for some reason you got the ZH 'two minutes' of hate expressed in red down votes... it could've been worse.

Most of the dudes here are on your side.  Folks, like you I just fucked off with this Centrally Planned Circle Jerk which goes on and on and on.......

On the bright side, you managed to draw out a thoughtful post from the great chindit13.

Brother, stay good and take your own reasoned steps to protect yourself and family in these dark times.


Chaos_Theory's picture

Thank you for a brief intro on the complications of India as a society and nation.  I can't remember the exact number, but I read once their are 800+ languages spoken in India...tough to speak about a place as a singular case study of that's the case.

AldousHuxley's picture

if you include languages such as c++, java, and SQL.




Larry Dallas's picture

+ 1000

Like a boss, Chindit13.

ceilidh_trail's picture

A bit harsh (+/- jealous?), aren't you? Jim does not need to tell you or me every move he makes or when he makes it. Jim works for himself. He left Soros' quantum fund a long time ago. He talks his own book, as we all do. Most of us are mature enough to know that and adjust accordingly. I suggest you learn to do the same. The man is free to give his opinion to anyone who wants to hear it, as you or I are. Only, he has something worth listening to...

tango's picture

It is - as previous posters have noted - the evolution of the ZH mob mentality.  No one can write an article - no matter how mundane the subject - and not be subjected to instant denunciation.   I doubt many are even reading the entire articles - just enough to rush off and shout, "Traitor  tool sheeple 1% Jew psycho richm etc: More and more it is the messenger - not the message - that's attacked.  Irony of Irony - even as they denounce CNBC, Goldman, the government and FED they fail to notice that the Tylers stay glued to CNBC and follow every FED or investment banking announcement.

savagegoose's picture

he prob bought at browns bottom, and is still waiting  for the   bubble.

KansasCrude's picture

AllWorkedUp,  Fierce post and right on the money. I've quit listening to Rogers he either couches all his opinions or is always waiting for lower and lower prices. Blah Blah Blah  Translation he is doing nothing but shilling his postion or in this case his latest worthless book.  He seems increasingly the gadfly that makes the circuit saying basically nothing new.  His crap is a waste of time for anyone thats been in the loop for more than 6 months. Did I mention Blah Blah Blah

Since the dumbass started a family in his 60's I think his bloviating is just an excuse for him to get out of house.  Hows that for good judgement cranking out kids when you about ready for a wheelchair.  What do you bet they are minnie Jimmies complete with bow ties.....the 2010 versions of Richie Rich. 

DosZap's picture

I guess it never goes down enough for him to start buying. I think he's right about agriculture and energy going higher, but he's no goldbug.

Well to make that stick, you would have to KNOW his current holdings,would you not?.

A lot of folks here have alll they need, and are never going to BUY anymore.

S.N.A.F.U.'s picture

(I know I'm kind of stating the obvious here, but to expand on what you said...)

Yes, for savers (rather than gamblers) there are three phases:
1. catch up (converting excess dollars to gold and other hard assets)
2. saving (as long you have enough income coming in that savings is accumulating, some of that will go to gold)
3. retirement (or other non-saving periods due to expenses or job loss or whatever)

Those who were either "with the program" all along or are recent enough first-time savers that they have ZH and mises.org and other places to help them quickly get up to speed get to skip #1.  Late comers like me had to spend years in phase #1 until a sufficient amount of savings was moved to hard assets.  (While hindsight shows it would have worked out in my particular case, moving it all at once was deemed too risky.  Those who like risk can get #1 done real quick.)  Then going from phase #1 to phase #2, buying slows down quite a bit, but continues.  In phase #3 there's really no buying (except maybe for some reallocation).  Phases #2 and #3 may be a bit blurred by people who are good at investing (and therefore often have additional savings coming in even while they are technically retired).

S.N.A.F.U.'s picture

AllWorkedUp said:

I've never heard Roger's even once say he's buying gold. Not once.


Jim Rogers (@0:44):

I have gold.  If gold goes down I'll buy more.  If it goes up I'll buy more.  Gold is in a bull market, which has got years to go.  But I expect to make more money in agriculture than I do in gold.  But I own it.  I bought some yesterday, as a matter of fact.

(That isn't the only video I've seen where Rogers said he bought gold either -- IIRC in one he even pulled some gold coins out of his pocket that he bought on the way to the interview.)

I don't get the impression that Rogers is trying to time the market here.  Market timing is for gamblers in the paper market.  If you want to listen to a snake-oil salesman screaming "Buy, buy, buy!" go watch Cramer.  Rogers is likely just buying gold whenever it makes sense for his situtation, incrementally, just as most of us who are rational buy gold whenever it makes sense for our own individual situations.  Available income and savings, changing needs and plans, new opportunities, risk management and many other factors all come into play -- there is no one right time (or amount) for everyone to buy.  So whether or not Rogers is buying at any given moment is a triviality, not of any importance, not useful information for the viewer, and is not revelant to the important message Rogers is trying to get across.  (And I believe I've even heard him say as much.)

fonzannoon's picture

In the US tie it all back to Zirp Truthinsunshine. Zirp means to me that deflation comes first. There is a big difference between a TBTF bank and a massive insurance company. These insurance companies are heavily tied to promises that they can't keep much longer with rates where they are. I would lump pension funds in here but I just think they have access to the red bernak phone and are more likely to be back door bailed out. The insurace companies have derivates out their ass trying to hedge interest rates. It won't take much for one of them to detonate. When that happens, and a bunch of people who moved their entire 401(k) into some insurance product with guaranteed rate, watches their retirement go bye bye, you can bet your ass it will start a run on every other company. There are trillions in these products. That is when the Bernak is going to get called out. He bailed out the banks, so is he going to let all these people hang? These insurance compnies know it. So they are picking up pension funds...whatever they can to become their own version of TBTF.

My guess is Bernak bails them out, and then it is Obummer's time to shine. Wall street failed us. Now the insurance industry failed us. There is only one TRULY safe option left for your retirement nest egg, and that is the same people we trust Social Security with. So you either choose to get bailed out, and in essence forgive your principal in exhange for a gubby funded annuity, safely invested in US treasuries, or you can keep the broken pieces of what is left of your balance and throw it back in the casino.

knukles's picture

Deflation comes first
That's the key to it all right now.
I've been runinating pon us being trapped (LOL Liquidity and Credibility, latter h/t Jesse) for several years now.  The longer we go, the more it comes true.
Just think of it....
If we enter a period of deflation like Japan, prices falling by say 2 to 3% per annum, a 3% 30 year treasury garners a 5 to 6% real return!
One of the most unpopular, nonconcensus opinions out there, which makes me feel secure in it...
Because if its concensus folks, it's generally well past it's due date.

AllWorkedUp's picture

Deflation in what? Nothing you need to live is getting cheaper. Oil? Food? Healthcare? Utilities of any kind? NO

None of that is experiencing deflation - none.

Your Dell computer or ipad or T.V. maybe even your house. but nothing that is essential, is deflating. 3% bonds will only cost you a 7-8% loss in purchasing power of what you need to live.

knukles's picture

Notice the qualifier; "If"

GetZeeGold's picture



You see that a lot in the Bible....and a lot of prospectuses.

Poetic injustice's picture

Deflation is not possible due to all red tape.

If government would rescind most of the rules, startups would get prices down. But now you need 50 papers and regulations just to start.

In some Eastern Europe countries there are at least 19 agencies/inspections, which all show up within first week of your work and make shakedowns.

knukles's picture

Japan is overwhelmed with regulations as is anywhere else.
They have had significnt prolonged (30 years) deflation.
It "is" possible.

AynRandFan's picture

Further real property asset deflation is certainly a good possibility.  When you can get free money down at the bank, asset prices should be going up, but they're not.  Even if interest rates stay down at historically crazy low levels, real property prices are still high in relation to income growth and employment participation rates.  Small business is still in the tank, though nobody seems to be talking about it.  Just because Mega-Corp can cut workers and borrow for almost free doesn't mean the employment-heavy small business sector is doing well at all.  Small business drives real estate demand and retail activity in general.  Walmart seems to be feeling it lately.  So, while import prices are high, I don't see domestic inflation in anything other than imports and paper assets.

TruthInSunshine's picture

Fat Barry Ritholtz (who predicted a massive drop in gold and oil prices in December 2009 for calendar year 2010) has said that the BLS numbers are rock solid, we're in a solid & robust recovery, and anyone or any entity that dares to question the various governmental or quasi-governmental agency statistics on employment, inflation or any other economic metric is crazy loco.

francis_sawyer's picture

He'll say anything to keep the invites coming to the Hamptons summer party circuit...


He feels its his tribal obligation to keep up with the Schwartzes yu kno... 

itstippy's picture

"Small business drives real estate demand and retail activity in general."

Maybe 40 years ago.  Not today.  Today local economies are dominated by YUM brands chain restaurants, Big Box retail, agribusiness farms, and manufactured goods imported from Asia.

Growing up in the 1960's my local downtown business district had 3 shoe stores, 3 hardware stores, 4 drug stores, 2 Five & Dimes, 2 butcher shops, 3 bakeries, 2 paint stores, 4 diners, 6 taverns, etc.  All were independent small businesses.  Now the entire downtown business district consists of boutique specialty shops and fern bars.  No hard business left.  All the real commerce has moved to just outside the city limits, on a two-mile strip of Wal-Marts, Pizza Huts, and other large corporate retail outlets.

The managers of these corporate retail outlets are paid a salary.  They are told what to stock, how to display it, what to charge, what to put on sale, how much to pay employees, how to keep the books, etc., by corporate headquarters.  They are not "small businessmen".

The few remaining small businessmen scratch their weary heads and worry.  They continue contributing to the Small Businessmen's Association in hopes of getting representation in government.  Their dues go on to fund "pro-business" lobbyists, who fund "pro-business" politicians, who promote "pro-corporation" interests.

Both small businessmen and labor have respectively been sold out by the folks they thought were representing them; they just refuse to see it.  So they suffer in a state of cognitive dissonance, waiting for "The Recovery" to kick in and make things good again.  

DosZap's picture

  All the real commerce has moved to just outside the city limits, on a two-mile strip of Wal-Marts, Pizza Huts, and other large corporate retail outlets.


These estabs do not constitute SMALL Business. They are SERVICE industries.

Small business is anyone who is produicing a manufactured good.That is the real driver.

itstippy's picture

I'm a small, independent trash hauler.  Four trucks, three dozen dumpsters, and six employees.  We don't produce anything - we haul garbage.  I consider it a small business.

DosZap's picture

I'm a small, independent trash hauler.  Four trucks, three dozen dumpsters, and six employees.  We don't produce anything - we haul garbage.  I consider it a small business.


Yes you are, a SERVICE business.

chubbyjjfong's picture

Totally agree wth knucles there.  Deflation surfaces first as the money is slowly leached away from the working class. There is no money for the majority of society and so spending habits change dramatically. Expensive labels are substituted with cheaper alternatives. People will keep doing this to make ends meet. The companies producing expensive brands are forced to react (reduced prices, job cuts). The wealthy will continue to buy luxury assets with their newly acquired, ever increasing (thanks to the CB machine) deleveraged money. There is a very evident disconnection occurring. Some luxury assets, such as desired property, high end fashion, art, assets of value to the elite, are increasing in price and turn-over, in addition to essential utilities such as power and water for obvious reasons. However some staple food groups, amongst other things, are coming down in price as the majority of society are forced to change their spending habits rapidly.

It makes sense that areas of society, in terms of price trends, will become extremely disconnected in conjunction with the disconnection between the wealthy few holding the majority of the money, and the rest of us who rely on the bare bones staples. The masses will face a deflationary hit (surplus goods in the market get dumped) as the disconnection tears society apart, while the wealthy panic-buy all the luxury items they can as they see the faith in money disintergrate. Deflation comes before loss of faith. Then onset of rapid hyperinflation.

rbg81's picture

Aside from real estate, everything else is going up in price.  And real estate seems to have bottomed.  Food prices are increasing geometrically, not falling.  Don't believe me?  Go visit a supermarket.

What is going on is simple: the Productive are being bled dry to pay for the non-Productive.  And increasing numbers of people are deciding to jump on the non-Productive bandwagon because.....its just easier than busting hump every day.  Thanks to the Internet, entertainent is dirt cheap, even porn is free.  As long as one has enough for basic food and shelter, you can sleep late, sit around and electronically massage your ID all day.  Thanks to automation, we don't need as many people to actually work either.  So, I see what is happening now as a historical wave.  Is it fair?  No.  But its happening regardless, driven by politics as the non-Producing class is only going to grow.

Encroaching Darkness's picture

"the non-Producing class is only going to grow."


Agreed ... for a while.