Jim Rogers Predicts Worst Bear Market in Our Lifetime
Investor Jim Rogers has seen a lot in 75 years. So when he starts talking about the worst bear market in our lifetime, we probably ought to sit up and take notice.
And that’s exactly what Rogers said in a recent phone interview with Bloomberg.
When we have a bear market again, and we are going to have a bear market again, it will be the worst in our lifetime.”
Rogers is particularly concerned about the level of debt that has accumulated worldwide.
Debt is everywhere, and it’s much, much higher now.”
Some guy named Mike Evans quoted by Bloomberg basically mocked Rogers, saying, “Jim has been talking about severe corrections since I started in business over 30 years ago. So, I’m sure he’ll be right at some point.”
It’s easy to be flip and poo-poo the naysayers, especially when virtually all of the mainstream financial talking heads seem clueless and are saying “everything is great.” But Jim is not wrong – especially about the debt.
As we reported last month, global debt is increasing at three times the rate of global wealth. In fact, global debt rose to a record $233 trillion at the end of Q3 2017. That is split up between $63 trillion in government debt, $58 trillion in financial sector corporate debt, $68 trillion in non-financial sector corporate debt, and $44 trillion in household indebtedness.
Just looking at the situation in the US should raise major red flags. The US government plans to sell more than $1 trillion in Treasuries to finance all of the debt Trump and the GOP Congress is running up. And the major buyers – China, Japan and the Federal Reserve are not buying. Who’s going to buy all of this debt?
Rogers is not alone in his concern about debt. Last year, US Global Investors CEO Frank Holmes called global debt “the mother of all bubbles.”
It goes without saying that this is a huge risk. Some are calling this mountain of debt ‘the mother of all bubbles,’ and we all remember how the last two bubbles ended, in 2000 (the tech or dotcom bubble) and 2007 (the housing bubble).”
And Mint Capital strategist Bill Blain predicted that “the great crash of 2018 is going to start in the deeper, darker depths of the credit market.”
Rogers has seen his share of bear markets. The Dow plunged more than 50% from its peak in October 2007 on the eve of the financial crisis to its low in March 2009. The market lost 38$ from its high during the dot-com crash starting in 2000 through a low in 2002.
Rogers didn’t try to predict when the crash would happen, admitting, “I’m very bad in market timing.” But it certainly seems like we could be on the cusp. Rising interest rates are pretty sharp pins to be waving around a massive debt bubble.
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