Jim Rogers: "Before This Is Over, Gold Might Turn Into A Bubble"

Authored by Umair Tariq via ValueWalk.com,

Famed investor Jim Rogers, chairman of Rogers Holdings, told Kitco News that while he is not yet buying gold at current levels, a rebound in the yellow metal could cause it to overheat.

“Before this is over, gold could turn into a very overpriced asset, it might even turn into a bubble,” he said. Rogers noted that while he holds physical gold, he would not buy more until prices drop below $1,000 an ounce. “I’m still waiting for $950 an ounce, or something like that,” he said.

On U.S. equities, Rogers said that current valuations are overstretched, although stock prices could still climb higher on good news. He added that the next bear market could be “the worst in my lifetime,” and that instead of U.S. stocks, he is looking at investing in Zimbabwe, an emerging market.

“I’m buying Zimbabwe. Zimbabwe was ruined for 40 years by a crazy dictator. There’s a new guy, he may be worse, he may be better, but he’s certainly different, so you should think about Zimbabwe,” he said.

Jim Rogers: "Before This Is Over, Gold Might Turn Into A Bubble"

Transcript

Joining me today is Jim Rogers chairman of Rogers Holdings. Jim good to see you again. Thank you for joining us. I'm delighted to be here. How are you. I'm doing great.

And since about last time we spoke you said that if gold doesn't rally when bad things are happening then the correction isn't over.

Now we're up a little bit this Thursday. But what's keeping gold from really taking off here.

Jim: Daniela as I've said to you several times before I'm still not a buyer until gold goes under a thousand U.S. dollars an ounce. I own gold. I hope I'm smart enough to buy a lot of gold when it gets there. But you know we had a huge blow off back in 2011. And I've been around long enough to know the huge blow offs usually take a long time to correct. In my view that's what's going on. I mean I'm not a very good trader but that's how I see the world.

Daniela: So with the tough summer it's been for gold, I know you've said in the past many times that you buy when gold is down. Was that a good time for you.

Jim: Not yet. I'm still waiting for U.S. dollars an ounce or something like that. It may not get there if it doesn't. It's ok I'll own a lot of gold but that's not what I plan to do Daniela. If it gets there I hope I'm smart enough and brave enough to buy a lot of gold because before this is over before this is over any gold is going to turn into a very overpriced asset. It might even turn into a bubble.

Daniela: Let's move onto equities now and my stock markets as you know have climbed even higher since the last time we spoke. Our valuations just over stretched here. It is now a risk-on or risk-off period.

Jim: But Danielle you say markets... in many markets in the world that have collapsed that are down a lot. You're talking about United States stock market. Let's look at the U.S. believe it or not that's not the only market in the world. Yeah the U.S. markets making all time highs. I'm not interested in buying any market making all time highs. And it looks like it might well go higher. You know if Trump comes up with some good news for a while instead of all this bad news you could have a blow off in the U.S. stock market right. Never. One final move. But I don't I'm not smart enough to buy blow offs. I can't I I don't know how to do that.

Daniela: I know we also spoke about how you for Sa'ar could easily see an over 50 percent correction happening in the U.S. stock market. Are you sticking to that.

Jim: Oh yes going to be worse than that Daniella. When the next time we have a bear market and I wish I were smart enough to know when it's going to be the worst in my lifetime and 2008 we had a problem because of too much debt. And you know the debt has gone through the roof since 2008. The Federal Reserve in America alone has increased its balance sheet by 500 percent in 10 years. I mean that's unheard of that has never nothing like that has ever happened in history. And these are crazy things going on.

Daniela: Jim I'd love to get your thoughts now on the Nafta deal and unfold Lee unfolding and dismantling here you have a risk with that pose to someone's portfolio.

Jim: Well if it turns into a trade war and Mr. Trump keeps saying he wants trade wars it's not good for anybody nobody's ever won a trade war and trade wars have never been good for anybody. We saw that the Mexicans and the Americans did something recently. But I look at that what details we have and I see what's going on here. This is bad for America. It means that prices are going to go up in the United States how is that good for anybody at all. Maybe there are the details I don't know about. But so far what's being negotiated Mr. Trump keeps saying it is a triumph. But I'm an American citizen and at 325 million of us. It's doesn't look good for us. From what I can see.