Jim Rogers Explains To Bob "Not a Cheerleader" Pisani Why He Is Short Stocks, Long Commodities, And Wants Europe To Fail
Jim Rogers was on CNBC earlier, discussing the recent intervention by the SNB and the overnight plunge in Europe, in the process generating yet another amusing episode of market "non-cheerleader" Bob Pisani attempting spin the global economic collapse in a favorable light on not one, not two but on three separate occasions, and being soundly rejected by the far more, informed shall we say, Rogers. Specifically, to Pisani's repeated attempt to get Rogers to admit the uber-secret of which stocks he is long (CNBC Ponzi playbook 101), the former Quantumanite responds that not only is he not long anything, he is mostly short stocks and very much long commodities for two simpler reasons: "if the world economy gets better i'm going to make money in commodities because of shortages that are developing. Especially in agriculture and precious metals. If the world economy doesn't get better, Bob, you're not going to make any money in Toyota or IBM but you might make money in commodities because they're going to print more money. It's the wrong thing to do but they will print money. Bernanke is already printing money again. You have to protect yourself. I'm short stocks but i don't expect the world economy to get better. Not much better anyway, if it does and I am long commodities as a protection." And on some other topic like the Chairsatan, "Bernanke has been lying to us again", on the SNB intervention attempt: "This is a terrible mistake" and on what should happen to Europe: " It would be good for the world, though, if they let people go bankrupt."
Rogers: "I own some euros, I'll lose money if it happens. It would be good for the world, though, if they let people go bankrupt. My portfolio, I own commodities, especially precious metals and agriculture. I own some currencies. I'm short stocks in Europe and America and the emerging markets."
Pisani: You're long commodities but short stocks. explain how this fits in with the global growth story. Is there a global growth story and why are you long commodities -- wouldn't you still be long some commodities stocks, for example?
Rogers: No. well, I have some left over from 15 years ago. No, if the world economy gets better i'm going to make money in commodities because of shortages that are developing. Especially in agriculture and precious metals. If the world economy doesn't get better, Bob, you're not going to make any money in Toyota or IBM but you might make money in commodities because they're going to print more money. It's the wrong thing to do but they will print money. Bernanke is already printing money again. You have to protect yourself. I'm short stocks but i don't expect the world economy to get better. Not much better anyway, if it does and I am long commodities as a protection.
he's already -- you said bernanke is already printing money. has a new program been announces? that brings us to the u.s. dollar, of course, jim, which today is stronger against the euro. i would assume, though, that your long-term forecast for the dollar is not a particularly positive one.
On what currencies Rogers likes and why:
Rogers: Long-term forecast on the u.s. dollar is disaster, catastrophe. Having said that, as i said on cnbc several times in the past few months i'm long the u.s. dollar. The only reason i'm long is because everybody in the world has been terribly pessimistic. Whenever that happens you should take the other side of the trade. I'm long US. dollar. I have no confidence in it. It's going to be a disaster. But as you speak i probably owned more US dollars than many years.
Bob, (with attempt #2 to get Rogers to appear "bullish"): So you're bullish?
Rogers: Bob, to your point, Bernanke has been lying to us again. He announced in early august that he was going to keep interest rates at a very low rate for two years. Now, Bob, how is he going to do that? You can't just say the words. You have to go into the market and force interest rates down. Come on. What is this, you believe in the tooth fairy? He's in there. That's the only way he can do it. If you don't believe the theory of monetary policy works, get out the unadjusted numbers since the beginning of august and you will see they shot up starting at the beginning of august as soon as he said we're going keep interest rates down. So he's in the market. He may be lying to us, they usually do, But he's in there. Be prepared.
On whether the SNB intevention will work.
Rogers: No, of course it's not. No central bank in the world has ever been able to control its currency in the long run. Many countries have tried, but the market always has more. The british tried it 15 or 20 years ago. Everybody has tried it. In the end the market has more money. The swiss will have two things happen. One, they will drive their currency down so much that they will no longer be a financial center, or it will go up again and they will lose money on all the currencies they're buying. This is a terrible mistake. The way you sort things out is you let the market take its course, the cure for high prices is high prices. That's how you sort things out.
And attempt number 3 by Pisani to present global economic reality as "better than expected" results in yet another epic failure:
Pisani: Jim, give us a couple of thoughts. China came out with their inflation numbers this morning. Appeared to be a little bit under control. chinese will probably not be hiking interest rates any time soon. gdp not as strong as it was maybe a year ago. but still looking pretty good. what's your thoughts here?
Rogers: China is trying to slow its economy down. They've raised interest rates six times. I wish america raised its rates six times. They raised reserve requirements 12 times. They're trying to slow things down. India the same way. Many countries acknowledge inflation and trying to slow things down. That's why i'm not so optimistic about the economy going forward.