Amidst the financial crisis, celebrity investor and author Jim Rogers, is a relaxed man as he anticipated the crisis and was on short positions on the financial sector stocks that crashed. Having sold his house in New York and settled in Singapore with his family, Rogers, in an interview with HT, said that Asia is the place to be in the 21st century.
Did you anticipate the crisis, and are you investing now?
Yes, I anticipated it and that is why I took short positions in 2006 and 2007 on investment banks, banks and real estate financiers. I am not investing now and if the economies get better, commodities are the place to be as shortages are developing.
Your take on the recovery?
It’s all artificial and just feel-good driven by pumping money into the system. People who have got money are happy but people in places from where the money has come are not better off. Some European economies were in bad shape and governments there have been lying about the real situation. Most European countries, such as Greece, Ireland, Spain, Portugal, Italy and even France, have big deficits and debts, and I think the problems in the west have not been solved.
How is Asia placed in this?
All creditor nations are in Asia but Asia, too, will have to suffer so long as the west has problems, which will be there for a while. Europe and the US are 10 times the Chinese economy, so the problems in the west have to be sorted out.
In the 1920s and ’30s, there was a historic shift from UK to US, exacerbated by the financial crisis. The same is happening now from the US to Asia and that, too, under the financial crisis. To me, it is a simple shift and and you are at the right place at the right time as the 21st century belongs to Asia.
Where does it all lead to?
The internationalisation of world has been good but as more economic problems come up, I fear that people will close up and countries will adopt protectionism, which is not good for the world. Some developing countries have already started doing this. Brazil has imposed some special taxes on people putting money in their country. America, too, is becoming more and more protectionist. If (these movements) gather steam, protectionism will grow. You won’t have free flow of capital, goods and people. Money trapped in a country creates bubbles.
Are you positive about India?
I am keen on India but it will have to work to reduce its debt. This limits the future growth because much of the increased growth goes into servicing debt. India will have to further open its currency and make it freely convertible, (and) open its markets so that they are freely investible.