Jim Rogers Sees Devastating Stagflation, Would Quit If He Was A Bond Portfolio Manager

Tyler Durden's picture

Now that we already had one notorious bond bear in the house with a late afternoon appearance by Bill Gross, who in a very polite way, apologized and said that while he may have been wrong in the short-term, he will be proven correct eventually, it is now time for the second uber-bond bear to make himself heard. In a CNBC interview with Jim Rogers, the former Quantum Fund co-founder, who back in July said he was had shorted US Treasurys, exhibited absolutely no remorse, instead reiterated a 100% conviction in his "bond short" call: "Rogers said when there is a bubble, such as the one being experienced in U.S. Treasurys, prices could go up for long periods of time. Bill Gross of Pimco, who also had a bearish view on Treasurys, threw in the towel earlier this year. But Rogers is sticking to his opinion that Treasurys will eventually fall. "Bernanke is obviously backing the market again and the Federal Reserve has more money than most of us - so they can drive interest rates down again. As I say they are making the bubble worse." The reality is that while Bill Gross has to satisfy LPs with monthly and quarterly performance statements (preferably showing a + sign instead of a -), the retired and independently wealthy Rogers has the luxury of time. And hence the core paradox at the heart of modern capital market trading: most traders who trade with other people's money end up following the crowd no matter how wrong the crowd is, as any substantial deviation from the benchmark will lead to a loss of capital (see Michael Burry) even if in the longer-term the thesis is proven not only right, but massively right. Alas, this means most have ultra-short term horizons, which works perfectly to Bernanke's advantage as he keeps on making event horizons shorter and shorter, in the process killing off any bond bears which unlike Rogers can afford to wait, and wait, and wait.

On whether the US is becoming a deflationary Japanese-style basket case:

"A difference is when Japan did that they were the largest creditor nation in the world, America is the largest debtor nation - not just in the world - but in the history of the world and the U.S. dollar has been - and is the world's reserve currency. So there are some factors that might not keep the interest rate down in the U.S.

Ok, so no deflation. What then?

The U.S. economy is likely to experience a period of stagflation worse than the 1970s, which would cause bond yields to spike, commodity bull Jim Rogers told CNBC on Friday in Singapore. Rogers said governments were lying about the inflation problem and the recent rally in Treasurys was a bubble.


"As the inflation numbers get worse and as governments print more money and as governments have to issue many, many more bonds - somewhere along the line we get to the point when (bond prices) go down."


Between 1974 and 1978 average inflation in the U.S. was at 8 percent, while unemployment hit a peak of 9 percent in May 1975. Currently, unemployment is at 9.1 percent while CPI is at 3.8 percent.

"This time is never different" and why the mother of all stagflations is coming soon:

Rogers believes inflation will get much worse this time because, he
said, in the 1970s only the Fed was printing money, whereas now many
global central banks have been easing monetary policy.

So yes: he will be right eventually... But what about in the interim?

"Bernanke is obviously backing the market again and the Federal Reserve has more money than most of us - so they can drive interest rates down again. As I say they are making the bubble worse."


For now though Rogers is playing it safe and avoiding bonds. Instead, he's betting on stagflation by being long commodities and currencies (such as the Chinese yuan) and shorting stocks.

Rogers even has some career advice for up and coming bond mavens:

"I wouldn't advise anybody to buy bonds, I would advise you to sell bonds," he said. "If I were a bond portfolio manager, I would get another job."

Ok, well, make that anti advice.

As to where the money will be made...

"In the 70s you didn't make much money in stocks, you made fortunes owning commodities," Rogers added.

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spiral_eyes's picture

US treasuries are the biggest bubble in history. All the mainstream financial press talking about gold being a bubble at $1900 and then they look at the ten year yield and it's less than 2%. Hahahaha.


Haywood Jablowme's picture

Start working on those push-ups boys & girls.  Weeza headin' for the big war!


dlmaniac's picture

"USTreasury = return free risk". / Jim Grant.

DavidC's picture

I had to read that twice...but priceless!


redpill's picture

"the Federal Reserve has more money than most of us"

Come on Jim, you know better than that. They MAKE the money, they have more "money" than anyone the universe has ever known.

Of course, money does not always have value, and many times it has none.

ratso's picture

Rogers = Crammer = Roubini = Farber - it's all about them all the time. They're always right and they are always sure.  It's actually all about the fact that they are self centered media hounds who are more about entertainment than info or insight.  

Booooo to all of them all the time. GET OFF THE AIR.

BigJim's picture

Much as I hugely respect Jim Rogers, it seems to me that shorting US treasuries is an end-of-the world trade, and, not just that, but the wrong end-of-the-world trade.

When the Fed finally allows yields to rise, it will be because they have lost control, and it will be because the USD is completely cooked. When you finally cash out your UST short, your profit will be in genuinely worthless paper.

PMs are a better bet - they will continue to rise in terms of fiat as the end-of-the-world approaches, and still be worth something after it happens.

Of course, when I say 'end-of-the-world', I mean a relatively controlled collapse, not Mad Max or The Road.

Zero Govt's picture

Big Jim is right of course ...Ben 'Bubbles' Bernanke has been blowing hard for 3 years now.. all that huffing and puffing and all he's managed to do is kick the can down the road on the day of reckoning for the bankrupt crooks of Wall Street and the corrupt clowns of Washington

Bubbles Bernanke is a counterfeit wealth fraud wrapped up in a corrupt monopoly attached to financial criminals and complicit in elite anarchy 

'Rich' that Raja-learned-at-goldman got jailed for insider dealing not 3 weeks after Ben 'Bubbles' Bernanke took down Gold and rigged the price driving a horse and coaches through every piece of insider trading and market fixing Law on statute

Where are the Retards.. sorry, Regulators?

AldousHuxley's picture

Manhattan upper east side had enough of curry.


See how Kashikari TARP is Indian, Raja is Indianish, Rajat Gupta of McKinsey is Indian? New money newbies forgot to bribe the right folks and got caught stealing.


Look for attacks on China next as US wages currency war.


It is all corrupt at the top so no tears here.

BigDuke6's picture

Matt Taibbi calls Alan Greenspan a “one in a billion asshole” and convincingly argues that he is “the key to understanding this generation’s financial disaster”.

Greenspan’s adherence to Randian free market extremism led to two decades of loose monetary policy that inflated a succession of bubbles, culminating in the US housing and credit bubble that collapsed in 2007.

He also colluded with the President of Citibank, Sandy Weill, to get the Glass-Steagall Act repealed in 1999, freeing the commercial banks to move into investment banking and trading in their own right.

1982 to 2007 saw a vast expansion of credit, including a blow-off in the final five years that saw credit expand at triple the normal rate, thanks largely to the innovation of 'sub-prime loans' packaged into fraudulent instruments with the connivance of ratings agencies and sold to investors rather than retained on bank balance sheets.

Looking back, it’s plain that this period was not 'normal'.

Ben Shalom is just the latest incarnation.

Dental Floss Tycoon's picture

"Greenspan’s adherence to Randian free market extremism led to two decades of loose monetary policy that inflated a succession of bubbles, culminating in the US housing and credit bubble that collapsed in 2007."

Total bull shit!  There is/was nothing free about our markets.  It is all about market manipulation and fraud.

There was nothing "Randian" about the Greenspan put.

trembo slice's picture

if you read Greenspan's article "Gold and Economic Freedom" you would retract your statement.  If he actually had stuck to "Randian" "free-market" principles we never would have had the housing bubble.  

sound money is the answer, and Greenspan is as free-market as George Bush and Barrack Obama.  Just cause he wrote something one day, doesn't mean his policies were in line with that philosophy which he abandoned.  Fuck Greenspan. 

BigJim's picture

Central banks are a 'Randian' cornerstone, are they?


ToNYC's picture


The luxury of Time is not afforded the corporate pimco; compromised by $$ADD$$

IPs make real IP.

caerus's picture

jim's right...problem is no one has any patience anymore...look forward to see him proven correct yet again

covert's picture

this could be a great time to short bonds, especially govt.



MrBinkeyWhat's picture

"You have the watches...We have the time." Taliban dude

moskov's picture

Occupy Wall St and USA checked

Occupy Canada checked

Occupy London checked

Occupy Paris checked

Occupy Taipei and Hong Kong checked

Occupy Seoul checked

Occupy Milano checked

Occupy Madrid checked

Occupy Mumbai checked



Bye bye bankers!

akak's picture

Before or after Bernanke and Wall Street are finished with it?

BillyBoy22's picture

Occupy Beij.... (thump)

TuesdayBen's picture

You mean over there on the roo

philgramm's picture

Occupy Pyongy..............eeek  :(

TheFourthStooge-ing's picture

Occupy Rangoo..........oops!


Dental Floss Tycoon's picture

Wow that's today and I didn't get the memo.

I was thinking the 5th of November . . . .or was that just for the gunpowder?


Solid's picture

It's more than the bankers that will go bye bye if they succeed.
You better educate yourself on what Occupy Wall Street is. Communist mother fuckers and useful idiots as the protesters.

Seasmoke's picture

owning silver has never been more obvious than it is today

spiral_eyes's picture

$32 an ounce too! VERY cheap.

I think I need to buy a gun's picture

apmex let me know my latest order was NOW BACKORDERED

Josh Randall's picture

Gainesville has Silver bars 75 cents over spot right now

krispkritter's picture

Just picked up another order with them this week...love walking out the door with a heavy bag in my hand...


Yep bought some at 31.00  2 weeks ago during the dip. 3 week wait and should be here next week and coin show the follwoing week. Time for more of the PM"s



Yamaha's picture

Look at the charts!  Silver sucks when compared to GOLD...

Gene8696's picture

I have been trying to, but can't find a good online charting site or App that will let me overlay them for 5yrs. Recommend one?

Yamaha's picture

On the left hand column on ZH. Jessie's Cafe Americana. Best I have seen.

John_Coltrane's picture

Use Big Charts.  Here's the URL for the GLD vs SLV co-plot you're wondering about:


Bottom Line:  Both up about 170% over the last 5 years.  That GLD:SLV ratio is quite constant over long periods-silver flucuates more-gold is very steady.  But over short periods one can easily outperform the other as you will see.  Make sure you you cut and paste that whopper URL though.

css1971's picture

Now overlay the gold/silver ratio and the S&P 500.


Gene8696's picture

Super... Just what I needed. Tx

tmosley's picture

The OI figures are the most bullish they have been since 2003.  Yet no upward movement.  Seems like things are falling apart over there.

Dental Floss Tycoon's picture

@yamaha "Silver sucks when compared to GOLD..."

It doesn't suck.  It's on SALE!  Buy it while you can.

mynhair's picture

Rogers should just quit.  S&P is headed to 1400!

Damn bears still think fundementals matter.

MFL8240's picture

Lets see, Rogers is worth a few Billion and you are worth nothing.  I think I will go with him and fuck U to all the idiots.