On Jim Rogers, Britain’s demise and parenthood in the 21st century

Jim “Commodities supercicle/bull in China” Rogers has done it again.

Last week, he told a gloom story for any gloom-seeker journalist who wanted a headline story.

Summarising, UK Plc has nothing to sell. It’s main exports (namely financial services and North Sea oil) are gone or near-gone, so according to him, it is time to move out of the already battered pound.

He might be right, he might be wrong, I just like to listen to his commentaries, at least they are bold, not like the average news story of the day.

He was asked if he had shorted the British currency and he replied that not at all… but along with his then partner George Soros and their Quantum Fund, back in 1992 they made $1bn when “breaking” the Bank of England, forcing it to devalue the pound.

Better be wary, on that respect.

However, we must look at successful people with a magnifying glass. In December 2007, he sold his multimillion dollar mansion in NYC and moved to Singapore. He is quoted with pearls like:

If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia.

Rogers says that people in Asia are extremely motivated and driven, and he wants to be in that type of environment. The latest news coming from Europe and US are making me think like him, at some point I thought of Dubai, but that was another bubble part of the global credit junkie brotherhood.

He’s got two daughters and even though they are really young yet, he says they are being taught Mandarin and have bank accounts under their names in Switzerland.

Do I share his market opinions? Yes, no? I don’t know. What is sure is that if I had offspring (which I don’t at the moment), I would think exactly the same.



5 Responses

  1. Rogers did *not* short the pound with Soros, although he may have done so independently. By the time Soros had shorted the Pound, Rogers was independent, and Soros was working with another brilliant financier named Stanley Druckenmiller.

    Moreover, Rogers has been pretty clear that this time, he is not yet shorting the pound–he was planning to do so, but then his comments got televised and the market acted ahead of him.

  2. re: moving east–I wish I could do it :)

    Europe and the US are basically dead, although it’ll take a long time to really come to grips with it. The debts are too high, the demographics are against them, and they have little to sell to the creditors (which are mostly Asian) that the creditors can’t make more cheaply themselves.

    Having said that, Asia is comprised of a lot of countries that more or less hate each other, and in general, depressions and shortages of resources lead to wars. My personal view is that even if it won’t be the *best* performing country, I’d probably feel safer living in Brazil than Singapore (which lacks water, by the way…) for the next decade.

    I’d have told you that Canada, Australia, and NZ are the best choices a few months ago, but it’s pretty apparent that all the industrialized countries have agreed to drop interest rates to basically zero and spend money like hell for some reason, and I view this as insane policy. I’m pretty sure that historians are going to look back at tis time and wonder what people were thinking…

    Just my two cents.

    • Claire,

      I think Europe, Britain and US are different economies, different people, with different future.
      The US/UK combo are probably extinct due to their own excesses, but I see South-east UK surviving this worldwide demise, as I do see bits of US doing the same (Silicon Valley).

      Basically, I think you are probably right, but London has been a trade post since we can remember, and the fact that at the turn of the 21st century they specialised in trading toxic financial products, it will go on the history books with the tulip craze and the Dutch. They’ll move on. The rest of the British isles? I don’t see them surviving, the “they’ve got nothing to sell” applies in here as Greece and most of Spain.

      The US? They had a huge level of foreign-brain based innovation. They use to poach other countries, including third world ones, of their brightest minds. The dot.com bubble first, leaving cheap telecoms linking the world, and the post-9/11 visa restrictions, the coup de grâce. To maintain countrywide wealth, they moved to Asian debt. A short-lived mirage.

      Safer in Brazil than Singapore? You are right, resource poor countries are hard to get by… if you specialise in resource selling and believe in the commodities super-cycle, but you will always be seen as a foreigner there, in you cannot bail out civil unrest in countries where the small elites keep hoarding on cash while the rest starves to death. If you believe in the knowledge-based future, hard-rock, resourceless, highly specialised and dynamic nations will survive (Taiwan, Japan, Hong Kong et al.)

      Australia? Thought about it long and deep, and I don’t see it happening there either. The weather is getting warmer, or at least drier, and they are running out of water, so no cattle or crops growing there, and their fish banks are depleted due to lack of soil nutrients led to its shores.

      NZ? Perhaps, but I am pretty sure that when the going goes tough, Aussies won’t have Borneo as their first port of call.

      Canada? I have always had Canada in mind. Years ago, months before moving to LA, I focus my efforts in learning French as mad, as that was one of the requirements to move into the country. Resource rich, sparsely populated, low levels of indebtedness, open society and most importantly, with one of the highest levels of stored water in the planet.

      The re-rise of the city state? I really see it coming back. Along with cyber currencies (apparently the yuan has a serious contender in the Chinese virtual world) backed by gold, or any other intrinsically valued asset.

      Canada is too large to maintain the level of infrastructure that a country its size would require, so raising four new city states, one with capital in Vancuver, then Toronto, the French corner and the new based around the oil sand fields.

      Those are my six pence.

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