Jim Rogers Warns Next Crisis Will Be "Biggest In My Lifetime"

Billionaire commodity guru Jim Rogers believes the next economic catastrophe is coming. And when it arrives, it’ll be the worst financial calamity the 74-year old investor has ever seen.

Rogers, who discussed his outlook on “The Bottom Line” with Henry Blodget, told the Business Insider founder that the tremendous debt buildup and unreasonably high asset valuations have made the global economy even more vulnerable than it was in 2008, and that the next crash will the "the biggest in my lifetime."



Meanwhile, the spark that ignites the next crisis could be the collapse of a pension fund – or it could be something unforeseen, as Rogers explains below:

“Well, it’s interesting because these things always start where we’re not looking. In 2007, Iceland went broke.


People said, ‘Iceland? Is that a country? They have a market?’ And then Ireland went broke. And then Bear Stearns went broke. And Lehman Brothers went broke. They spiral like that.


Always happens where we’re not looking. I don’t know. It could be an American pension plan that goes broke and many of them are broke, as you know. It could be some country we’re not watching. It could be all sorts of things. It could be war. Unlikely to be war but it’s going to be something.

Central banks, of course, have abetted this behavior through an unprecedented expansion of their balance sheets. Global central banks now have $15.1 trillion worth of assets on their balance sheets, according to Bank of America’s Michael Hartnett. The Fed's balance sheet alone has increased five-fold since the crisis, Rogers noted.

China could easily end up being the cradle where the next crisis is nurtured, thanks to the explosive debt growth seen in the world's second-largest economy since the crisis.

“In 2008, the Chinese had a lot of money saved for a rainy day. It started raining. They started spending the money. Now, even the Chinese have debt and the debt is much higher.”

Goldman Sachs tried to calculate China’s real debt load last year, and came up with 250% of GDP. And as Bloomberg reported in April, a rash of bankruptcies are unearthing hidden debt and suggesting that the true debt load in China’s corporate sector is much higher than previously believed.

What can be done once the crisis arrives? The Fed, with interest rates near zero and its balance sheet still swollen at $4.5 trillion, will probably be powerless to mitigate the fallout from the coming crisis, Rogers said. Though that won’t stop it from trying.

When things start going really bad, people are going to call and say, ‘You must save me. It’s Western civilization. It’s going to collapse.’ And the Fed, who is made up of bureaucrats and politicians, will say, ‘Well, we better do something.’ And they’ll try but it won’t work. It’ll cause some rallies but it won’t work this time.

Springing forth from the financial turmoil, the political turmoil that ensues could topple governments, or lead to the demise of other venerated institutions, be they investment banks or universities.

“You’re going to see institutions that have been around for a long time - Lehman Brothers had been around over 150 years. Gone. Not even a memory for most people. You’re going to see a lot more of that next around, whether it’s museums or hospitals or universities or financial firms.”


mofreedom GUS100CORRINA Fri, 06/09/2017 - 17:28 Permalink

It doesn't have to be a crisis EVER,,,markets don't HAVE TO DO ANYTHING...PERIOD...DAMN MAN...EVER.I do agree with you on his ag nonsense of the past.  Weather is a god named GOD,,,not AL GORE.  And population growth doesn't guarantee new growth will have the money to eat.  And efficiency in ag practices just means more is able to be produced,,,not bullish ag, and it's happening in China and India.   LOOK OUT BELOW.Despots (ALGORE) eat well.  NK-types,,,not so much.  

In reply to by GUS100CORRINA

Never One Roach Fri, 06/09/2017 - 17:05 Permalink

If RE ever corrects it will be a doozy!Most likely CBs won't let it ever revert to the norm, at least not in my lifetime.But he is correct that the next one wil hit high and low, wide and near. I read MD Anderson Cancer Hospital is even in financial trouble with a 50% drop in revenues. Many other hospitals closing due to costs, regulations, etc.Add that to the thousbands of store closings, etc. Lots of jobless people.

Ghost who Walks Never One Roach Sat, 06/10/2017 - 10:04 Permalink

The rate limiting factor in managing any future crisis is not central banks. There are only a few major CB's and their management teams are small and homogenous. Compare that to the governments of the world.Governments will not be able to act together to provide stability in the face of instability. There are too many conflicting political interests, and ideological approaches. Compare this to the current coordination between the major CB's.The world can't even find a common approach to dealing with terrorism. One set of governments funds the proxies in Syria and another set of Governments has to deal with the conflict and outcomes.The problem will be the demands placed on politicians to try to protect special interests from the crisis and at the same time respond to the needs of their electorates.Politicians are not not currently well practiced in Triage and quick decision making. The very practice of politics currently should be a caution as to where the problem will arise.As the crisis unfolds politicians and governments will always be behind the optimum decision points, and the decisions that they make will not be of sufficient strength to stabilise the situation and promote a recovery.Once the broad public loses faith in the political system and politicians and the economic system and banks it will require some major upheavals in existing power structures to deal with the new realities.

In reply to by Never One Roach

Batman11 Fri, 06/09/2017 - 17:06 Permalink

The Asian Century, sponsored by US capital and businessmen.Let's offshore everything for higher profits.Let's invest in Asia for higher returns.The US was starved of investment and went into decline.Adios America, hello Asia.Jim Rogers knows what's coming, he's in Singapore. 

Putrid_Scum Batman11 Fri, 06/09/2017 - 17:22 Permalink

You got into The Reset, Batman. An entire chapter devoted to your output.

You know you're the only guy to get into all three volumes. Amazing, well done. I should have wrote you but was busy.

Unfortunately my friend, I know what they know, and they see it coming. They know EXACTLY what's gone wrong. And your criticism of offshoring is unfair, it was a System Result, choice did not exist.

I'm not sure if we'll make it. And the Central Bankers are not in power so criticizing them is unfair.

The Families have begun to perform their magic.


In reply to by Batman11

dot_bust Fri, 06/09/2017 - 17:17 Permalink

Well, Banco Popular just went bust, and I don't think we've seen the contagion from that collapse yet.All the big banks are tethered together by derivatives and corporate bonds.So, it's hard for me to believe that the big American banks weren't holding Banco Popular's bonds. If they were indeed holding those bonds, they probably bought credit default swaps (CDS) in the event of  a collapse.Whoever sold the CDS now has to pay out on them. Therefore, there's probably at least one big entity other than Banco Popular that just went bust.I also want to know who was liquidating assets to meet margin calls due to delays on getting paid on credit default swaps.

Endgame Napoleon Horse Pizzle Fri, 06/09/2017 - 17:37 Permalink

I do. People always need some symbol to stand for superior. But a lot of degrees are simply not valuable in the marketplace, especially liberal arts degrees, degrees in social sciences, etc. If someone subtracted out all the college-educated people working in state jobs that actually require a bachelor's degree from the total statistics that reflect what people make and who is employed with a degree and without, you would see that the government rewards most degrees more than the marketplace.

In reply to by Horse Pizzle

serotonindumptruck Fri, 06/09/2017 - 17:20 Permalink

Jim is right about one thing.When the Great Collapse begins, it will likely be the pension fund system that precipitates it.From that point forward, it will be a cascade / domino effect, and the downward spiral will rapidly accelerate.(Hat tip to NIN)