Thursday, December 22, 2011

Bill Gross & Jim Rogers: Bleak Outlook For Real Estate; Interest Rates To Stay ... - ETF Daily News

Jonathan Yates: Bill Gross recently confirmed a bleak outlook for real estate as he predicted that low interest rates would be maintained by the Federal Reserve for “three, four or five years.”  He also stated that the European Central Bank and the Bank of England will continue to keep interest rates low, too.



This is obviously being done in further attempts to revitalize the real estate market.  Neither the housing sector nor commercial real estate has recovered from the 2008 credit market crash.


There are still 4 million foreclosures waiting to hit the market in the United States.  As bad as things seemed, it turns out the National Association of Realtors has been too optimistic in its figures.  As a result, new numbers will be issued on December 21.


It is not just the United States. Gafisa SA (NYSE:GFA) a Brazilian homebuilder, is off about 60% for the year.  Xinyuan Real Estate Co (NYSE:XIN) a Chinese homebuilder, is down almost 30% year to date.


Back here in the United States, the ETF for home builders, SPDR S&P Homebuilders (NYSEARCA:XHB) is down for 2011, too.


If Jim Rogers is right and a new financial crisis hits that is worse than 2008, the real estate sector will suffer even more, no matter how low interest rates stay.



View the original article here

Debunking 3 Gloom & Doom Concerns And Banking On Consumer Cyclicals [Podcast]

How much of the farm should ETF investors "bet" on farming?

Throughout 2011, Jim Rogers has been particularly bullish on agricultural-based assets. Yet Market Vectors Agribusiness (MOO) and PowerShares DB Agriculture (DBA) are both down -11% over the prior year.

Is Mr. Rogers changing his tune? Not a chance. Although the world-renowned China bull is somewhat bearish on stock assets, he still sees the world’s demand for food rising. That should help agricultural commodities represented by PowerShares DB Agriculture (DBA)... and it should benefit the corporations in Market Vectors Agribusiness (MOO) that supply the global agribusiness industry.

Of course, there’s a more popular form of harvesting taking place in 2011… tax-loss harvesting. Specifically, savvy investors are taking some losses on short-term investments in December, rather than holding-n-hoping. For instance, an agribusiness believer can sell Potash (POT) today at a loss, replace it with Market Vectors Agribusiness (MOO), and simultaneously lower his/her tax bill.

Obviously, European debt uncertainty is punishing stocks all across the big board. The debt crisis has pushed traders out of commodities as well. Is there any hope for "risk assets" as the holiday season comes to an unceremonious conclusion?

Actually, retail ETFs may get a lift. Not only are the Retail HOLDRS (RTH) "holding" onto a 200-day uptrend, but this exchange-traded vehicle has been logging "higher lows" since August.

click to enlarge

Listen to my latest podcast here:

Disclosure: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships.


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Rogers: Buying US T-bills now is a 'terrible mistake' - Investment Week

Investment veteran Jim Rogers has branded US treasuries as the one of the last remaining asset bubbles left in the world.

He said he plans to short US bonds in the future and to buy them now would be a “terrible mistake”.

Rogers told Fox Business Network investors should instead look to hard assets, which will benefit from the US Federal Reserve's continued quantitative easing measures.

"I am not short bonds yet but I plan to be short bonds," he said. "If the world economy gets better, you are going to make money in commodities because that is where the shortages are.

"If the economy does not get better, they are going to print money and when it does get better, you better own commodities, such as silver and rice."

Rogers warned it would be dangerous to own US T-bills now but admitted he had been burned a few times recently when he attempted to short the asset class.

"I plan to be short bonds. I tried a few times before and I have been wrong. Bernanke has more money than I do and he can manipulate the market. But soon I will short them," Rogers added.

According to Rogers, the US Federal Reserve is already engaging in another round of quantitative easing but has not informed the public about it yet.

"The balance sheet has quadrupled in four years. They lie and say we are not having a QE3, but they are in the market," said Rogers.

He added the US was in a much worse predicament than Europe.

"We are in a worse situation than Europe. We are the largest indebted nation in the history of the world and we have states that are bankrupt. Europe as a whole is in better shape. Their bank is not printing money yet, maybe they will, but they are not yet," he said.

"Europe has made serious mistakes. What they should do is let Greece go bankrupt, reorganise and start over. Will they do that? No, they want the easy way."


View the original article here

Wednesday, December 21, 2011

Jim Roger's on How To Protect Yourself From Inflation - Equities.com

Jim Rogers Getty Images

According to the famed international investor, former Soros partner and general market maker, Jim Rogers, the U.S. federal Reserve has continued to pump money into the economy. Rogers, in a recent blog post, described the Federal Reserve as being among the primary dangers to our economy. ”They don’t know what they are doing,” he said. Rogers gives credence to the potential impact of European debt problems and China’s slowing growth rates, but continues to see the U.S. as the main source of the problem.

While Presidential nominees and congress debate the impact of raising taxes on the wealthy and other measures with a questionable impact on the economy, Rogers believes that the nation’s wealth is already being deteriorated. Rogers point to low interest rates and a rising inflation rate as the reasons why the numbers on our bank statements may look the same but will not go as far. Rogers is accusing the Federal Government of what is essentially a smoke and mirrors act to cover up their market tinkering. “Bernanke said last August he was keeping interest rates artificially low,” Rogers said in Yahoo Finance last week.”The only way you can do that is to go into the market.”

Within the article, he directed focus to an increase in the broad M2 measure of the United States Money supply. In spite of the Fed’s second quantitative easing program ending on June 30, there has been a 5 percent rise in the level. In total this represents a 20 percent increase since November 2008. These statistics, according to Roger are representative of major problems with inflation and he adopts the rather unpopular position that he would prefer that the Fed actually raised rates.

“Since August – well, this whole year – the M2 has jumped up,” he said in a recent interview “They’re in the market. They’re lying to us.”

Certainly, with the worries over the global economy and a domestic growth rate near zero, some do not object to the Fed’s presence in the economy and the printing of money. In fact Roger’s position that the group should raise rates could bring domestic economic growth to a tax, considering the low levels at which is stands today. Still, those who believe Roger’s statements regarding the position of the Fed in the economy right now, may want to heed the billionaire investor’s advice in terms of how to protect themselves against inflation.

Like many managers and individual investors, Rogers has been staying short on equities and going long on commodities and currencies. In the past, he has voiced his support for investment in the Swiss Franc, which remains a stable and reigning currency among European debt madness. In addition to the Franc, he is a proponent of Japanese currency investments. The Japanese economy has shrunk significantly as a result of the disasters that occurred there this year, but he believes this presents opportunities. Rogers, alongside the rest of the investing public, acknowledges the reasoning behind why many have fled from the nation’s currency and equities, but believes they have been more than priced into the market.

Beyond his long-term currency positions, Rogers is looking to take a defensive stance in commodities. The commodities tend is largely a defensive move and has been widely embraced amid fears of continued declines in the equity market in 2012. Additionally, commodities investments are among the few positions are protected from inflationary changes. Rogers says that for him, it’s a win-win situation. If the market recovers then the commodities will grow on the basis of increasing demand from China. He stresses that with pay rates rapidly rising in China and the expectations for life quickly shifting upwards, commodities of all kinds, from corn and wheat to industrial metals would all get a boost. In the event the economy continues to struggled and inflation heads higher, then his assets will be tucked away. 


View the original article here

What Jim Rogers Is Buying

Jim Rogers is a legend in the investment world, and if there is one person to listen to, it is him. So what has Rogers been doing?

Rogers remain broadly bullish on commodities for the long term, he told CNBC:
I'm long commodities and currencies, because if the world gets better, the shortages in commodities will make sure I make money; if the world economy doesn't get better, I'd rather own commodities because they're going to print money.

Rogers is long both gold and silver, but is expecting a correction in the short term:


Somewhere down the line gold will have a correction. Gold will continue to do what gold does best. Just give it a chance. I'd probably get more interested at $1,600. At $1,710 or whatever it is today, I'm not buying gold, I'm just watching. And likewise for silver.

Rogers has been bullish gold for a very long time, and has been correct. While he is still bullish on gold and silver, Rogers is more bullish on another commodity: food. Via his blog:


I suspect agriculture products would give better protection during the next several years although gold and silver will be good too – perhaps second best.

Though bearish on the U.S dollar in the long term, Rogers is buying the dollar right now (from CNBC):
I own the dollar, I own some other currencies as well, a year ago everybody was pessimistic about the dollar, including me…when everybody is on the same side of the boat, you go to the other side of the boat for a while.

Rogers is also buying some other currencies, including the Chinese renmimbi, Japanese yen, and Swedish krona. In terms of stocks, Rogers is largely bearish:
Stocks, in my view, in most countries are like they were in the 1970s. In the 1970s stock markets, and economies around the world did not do very much and were in a big sideways trading range for many years. We are in that kind of period now. [China Money Podcast]

I mainly short shares around the world. I have shorted American technology companies, I have shorted European stocks and shorted emerging market stocks. [Rogers blog]

One stock market that Rogers is more bullish on is the Japanese market. From his blog:
They will soon start losing money on the money invested abroad so a massive amount of that money is going to come back home. I doubt that will go into bank deposits or bonds because interest rates are so low. Then at least they can go to commodities or stocks.

View the original article here

Saturday, December 10, 2011

US does not deserve AAA status: Jim Rogers

NEW YORK (Commodity Online): With the US debt situation spiralling out of control, veteran investment guru Jim Rogers believes that the US does not deserve its AAA status.
In an Investment Week interview, when asked about what he thought of Fitch downgrading the US economic outlook, Rogers retorts “Where have they been for the past six years? The US is the largest indebted nation in the history of the world. It has nowhere near AAA status.”
In an earlier interview with Fox Business, Rogers had maintained his grim outlook on the US economy. “The U.S. is in fact in worse shape than Europe. Europe is getting the press these days because the debts are coming due but America is the largest debtor nation in the history of the world. The next time we have an economic slowdown it will be terrible. And it will be sooner than we all had hoped. I would expect it to be around 2012 or 2013”
So what does Rogers advise investors to hold? Gold. Obviously.
The US is currently in $15 trillion debt, with a slowing economy and rising unemployment.


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Jim Rogers: Abolish the Fed, Buy Commodities, Short Stocks

NEW YORK (TheStreet ) -- Jim Rogers is bullish on commodities, is shorting emerging market and American technology stocks and says the U.S. economy is in serious trouble.
Rogers, chairman of Rogers Holdings and legendary investor, gained international fame by calling the commodity rally in 1999 and loves contrarian investments. Rogers sat down first with TheStreet to give his take on the European sovereign debt crisis, the health of the U.S. economy, the possibility of a slowdown in China and his investment strategy for 2012.

2012 Outlook
What's the biggest risk to the U.S. economy in 2012?

Rogers: Probably the Federal Reserve in America because they don't know what they are doing. There are other risks: China is slowing down, Europe's got serious problems. They don't know what they are doing or how to solve it, but I would say the single worst risk is the United States central bank.
And that they would end up printing their way out of whatever slow down we are having?.

Rogers: They already are. They have already started printing money again. And they are printing a lot and they don't seem to understand economics or finance or currencies or much of anything else except printing money.
Why is that the biggest risk compared to say China and Europe as you mentioned?

Rogers: Well, first of all, China is a third the size of the U.S. economy. Europe and America are ten times the size of China. So even if China collapses, it's not the end of the world and even if China booms, it's not going to save the world.
It's important, it's very important but it's not the most important thing. China is trying to slow down and some parts of their economy are going to fail, collapse, they are going to have some bankruptcies.
Europe is certainly extremely important, what's going on there but Europe as a whole is in much better shape than we are. Europe as a whole is not a big debtor. The United States, as a whole, is the largest debtor nation in the history of the world and we've got states that are in trouble -- Illinois, New York, California. Europe has states that are in trouble -- Greece. You know the names as well as I do. No, America is the one we have to worry about the most.
Most investors are now more worried about Europe, however, because they think that we are going to see Greece fail, Italy fail and Spain fail. So what are they missing? Why isn't that the biggest headline they should be looking at?

Rogers: These are problems. Don't get me wrong. These are serious, serious, serious problems. You asked me what the biggest situation is and I am suggesting to you it's the United States. Europe is very important, China is very important, Japan is very important, but America is the biggest economy still and we are the ones with the worst central bank. Our central bank understands less than other central banks and therein lays the risk.

Investment Opportunities
For a retail investor who is not a big hedge fund, who doesn't have all of the algorithms that they can trade off of, who might be say 50% in cash, 80% in cash, what should they do headed in 2012?

Rogers: First, you better make sure that cash is in the right cash. A few years ago many people put their money in Icelandic krona, thought they were very safe. They had currency and they were earning high rates of interest and of course the krona collapsed and some of those people lost all of their money. So make sure you are in the right cash, first of all.
Second, what I am doing with my money is I own commodities and currencies and I am short stocks. I am short American technology stocks, I am short European stocks, I am short emerging market stocks. That's what I am doing but who knows if I am right.

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Friday, December 9, 2011

Jim Rogers: 'Real Things' Make Money

Want to make money in the stock market? For investor and commodities bull Jim Rogers, "you have to own silver, you have to own rice, you have to own real things if you’re gonna survive," he told CNBC Tuesday.International investor Jim Rogers The CEO of Rogers Holdings also owns gold, which after 11 years of rising has been "consolidating" for the past three months. "I hope it continues to consolidate. I hope it goes down so I can buy more," he said.

Elsewhere, his strategy is to be short in U.S. technology stocks, emerging markets and European stocks, and be long on commodities, "because if the world economy gets better, I’m going to make a lot of money in commodities," he said.

He also owns currencies including the Japanese yen, the Swiss franc, the euro and even the U.S. dollar, which while "not a safe haven" is nevertheless where investors go in times of turmoil, he said."There’s lots of currency opportunities in the world," he added. "There’s plenty of ways to protect yourself."He said the United States is a bigger debtor nation than Europe, when taken as a whole. Europe has "individual countries that are involvent...but they're in much better shape" than the U.S., with several insolvent American states.But he is avoiding Europe as he waits to see what the European Union leaders announce after their meeting Wednesday.The Europeans will "announce some good things and everybody’s gonna feel better for a while," he said. "Eventually, people are going to say wait a minute, things are worse than they were before. The problem of too much debt is not solved by more debt. That’s ludicrous."
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Chinese Are Among Best Capitalists in the World: Jim Rogers

Chinese Are Among Best Capitalists in the World and have a strong entrepreneurial spirit.

Jim Rogers Slams The Fed, Sees QE3, But Cautious on Gold

Legendary investor Jim Rogers’ latest criticism of the Federal Reserve included the contention that the U.S. central bank is “ruining an entire class of investors.”

In an interview with Yahoo Finance’s “Breakout,” Rogers argued that the Fed’s artificially low interest rates are really “something akin to QE3 in drag.”  The Fed is “lying to us,” he stated, “One reason the markets are holding up so well is that they are printing money as fast as they can.”


Rogers – known best for starting the Quantum Fund with George Soros in the 1970's and for his bullish bets on commodities over the past decade – went on to say that the Bernanke-led Fed is continuing to punish savers and kick the can further down the road.  In doing so, the central bank is preventing a sustainable economic recovery from taking shape.

As for his current investment stance, Rogers stated that “I’m long commodities and currencies; I’m short emerging market stocks, U.S. technology stocks, and I’m short European stocks.”

When asked specifically about gold, he presented a more cautious view on the yellow metal.  ”Gold has been up 11 years in a row…it is very unusual for any asset in world history and I’d expect the correction to continue.”

However, Rogers – who has been bullish on gold for the better part of the past decade – noted that despite the potential for a shorter-term decline he does not intend to sell his gold position and would consider adding on weakness.

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Thursday, December 8, 2011

Jim Rogers: US Lies About Inflation, Unemployment

Unemployment and inflation rates are worse than the numbers that hit the newswires suggest because the government is able to tinker with the methodology to sugarcoat how bad the economy really is, says international investor Jim Rogers.
"The government lies about the numbers that they put out. Don't take your advice from any government, or you are going to go bankrupt," Rogers told Newsmax.TV in an exclusive interview when asked if unemployment rates will ever return to pre-recession levels.

The official unemployment rate fell to 8.6 percent in November from 9.0 percent in October not due to strong gains in hiring by due to a shrinking labor force, as would-be job seekers quit looking for permanent work, the government reports.

Even so, the figure is probably much higher, Rogers adds.

Story continues below video.

"They make their unemployment figures look better but that's because they jiggle the numbers. If you use independent sources for unemployment, you will see we have serious problems still despite the government jiggling the numbers."

Inflation rates are also misleading, Rogers adds.

Officially, the consumer price index rose 3.5 percent on year in October, according to the Bureau of Labor Statistics, although inflation stripped of volatile food and energy prices came to an annualized increase of 2.1 percent.

The Federal Reserve tends to focus heavily on the latter when setting interest-rate policies and insists inflation rates are hovering within comfort zones.

The government lies about that also, Rogers says.

"Anybody who buys, who goes shopping knows that prices are going up. Buy food, education, insurance, just about everything that we buy, prices are going higher and the government tells us there's no inflation," Rogers says. "Some independent measures say it's over 6 percent already ... it's going to go much higher because they keep printing money, and as long as they keep printing money, it's going to get worse. So prepare yourself for much higher inflation."

The Federal Reserve has expanded the money supply in an effort to ward off crippling deflation and spur investment and ultimately, hiring.

Such polices have weakened the dollar and applied inflationary pressures to the economy, while unemployment rates remain high, critics charge.

"The problem is having any system that is dictated and where the government has a monopoly — that leads to the problems because they (the governments) always learn to cheat and lie."

Meanwhile, fiscal and monetary stimulus policies have swollen the government's balance sheets, making debt burdens so heavy that the U.S. is moving into dire straits.

"America is actually in worse shape than Europe. Europe as a whole is not a big debtor. The U.S. as a whole is the biggest debtor in the history of the world plus we have our own states, which have big problems: Illinois, California, New York," Rogers says.

"In Europe they've got some states that have serious problems such as Greece, Ireland, etc. But as a whole they are in better shape."

"The reason we are looking at Europe right now is because their debts are coming mature as we speak and soon they are going to be coming due in America, and we are going to have those problems, too."

Don't look to either one political party to save the day, as both Republicans and Democrats are both guilty of spending beyond their means.

"As far as I am concerned, a pox on both of their houses. Mr. Bush did the same thing. The debt skyrocketed under Clinton. The debt skyrocketed even more under Bush. Debts under Mr. Obama, they've gotten worse and worse and worse. The Republicans talk a very good game right now and I hope that they are right when they say we are not going to let spending go higher. I hope that they are right about it," Rogers says.

Even Ronald Reagan wasn't as fiscally disciplined as he should have been.

"When Reagan was president, the national debt doubled. Here was a man if anybody in the past 50 years who said 'we're not going to do this anymore,' and the debt doubled under Reagan."


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Marc Faber, Jim Rogers not selling gold, but it’s not all good news forbullion

Investment gurus Jim Rogers and Marc Faber in recent interviews seem to agree on the dynamics in the gold market. Rogers says he’s not selling his gold and Faber says there is no bubble. But that doesn’t mean bullion is not still in a correction phase.

Investment Week quoted legendary global investor Jim Rogers, co-founder of the Quantum Fund with George Soros now based in Singapore, on the outlook for gold on Monday:
“It has been correcting for the past three months so it is overdue for a stronger correction, but I have no idea by how much. It is very unusual for any asset to go up for 11 years in a row with no correction. I own gold and I am not selling my gold.

The price at which I buy will depend on the circumstances. If it is going down because the world is going bankrupt then it would need to be priced at $900 for me to buy it. If there is an artificial occurrence then maybe between $1,200 and $1,400. It depends on what is going on in the world.”

Last week Bloomberg interviewed Marc Faber, fund manager and author of the widely followed ‘The Gloom Boom & Doom Report’ based in Chang Mia, Thailand (the conversation about gold starts around the 11:00 mark):


Faber tells how he recently asked a room full of Asian investors if they owned gold and only a one said yes, which signalled to him that gold was not in a bubble because “if [he] asked the same question about Yahoo! type of stocks ten years ago everybody would have put up their hands.”

Gold’s spike above $1,900 an ounce was a “huge move” and bullion was “still in a correction phase” although it has to be remembered that for the year gold is still up 20%. Faber commented on the record gold price in early September saying at the time “when you buy gold, it’s an insurance against systematic failure and problems in the financial markets.”

The U.S. is a bigger problem than Europe because of our mountain of debt, and could go into a depression by 2013, says Jim Rogers. Our borrowing is still going through the roof. The markets may rally on short-term fixes, but we're the largest debtor natio

Wednesday, December 7, 2011

Jim Rogers: US Flirts With 2013 Depression

The United States economy never really emerged from the recession that began in 2008 and is possibly headed for a more chronic depression, and the prognosis for recovery doesn't look good, especially in 2013, says international investor Jim Rogers.
President Barack Obama has tried to spend the economy back into recovery, which never helps, Rogers told Newsmax.TV in an exclusive interview.

When an economy falls into a recession, which normally happens once every four to six years, it needs to run its course, which is painful but healthy in the long run.

Spending money via stimulus packages or through ultra-loose monetary policies resuscitates the economy but not for long and makes the day of reckoning even more painful when it arrives.

Story continues below video.

"We are talking about serious unemployment, we're talking about more losses, we're talking about more bankruptcies. Potentially a depression? Yes, of course, potentially a depression," Rogers says.

"In America we have had recessions every four to six years since the beginning of the Republic. So by 2012 or 2013, we're going to have another one, and it's going to be much, much worse. Whether that's a depression or not I don't know but be very careful because America is getting deeper and deeper into trouble," he said.

What can the government do? Reverse the spending policies of the Obama administration, he says.

"We cannot quadruple our debt every four or five years. We cannot print staggering amounts of money every four or five years. So there's going to come time when we've shot all of our bullets, and it's going to be a big mess."

On top of hundreds of billions of dollars in stimulus measures the administration has rolled out, the Federal Reserve has pumped $2.3 trillion into the economy via quantitative easing, which are asset purchase from banks that critics describe as printed money with little backing that in the end threatens to push up inflation rates.

Government intervention won't work here as it hasn't elsewhere. Japan refused to let troubled financial institutions go under in the early 1990s and as a result, spent two decades mired in sluggish recovery. Scandinavia took the opposite approach when it ran into an economic downturn and today is healthy, Rogers points out.

The world's Central Banks recently launched a coordinated effort to make it easier for European banks to gain access to dollars, a move that seeks to stave off a credit crunch. That's not going to work either, Rogers says.

"It's not going to solve the problem. What politicians try to do always is get to the other side of the next election. This is just going to delay the problem and make it worse in the end. It's going to make it worse because there is going to be higher inflation, higher interest rates, more currency turmoil and we're going to have a lot more problems."

In the U.S., voters go to the poll in 2012 to elect a president, and they aren't going to be happy.

"Unemployment is still higher than it was back in 2008 when Mr. Obama came to become the president. So the idea that got out of that first recession, to me, is a little bit laughable. We're still having serious problems," Rogers says.

Watch out for election-year spending, which may boost markets somewhat but the underlying problems facing the U.S. economy such as a massive debt overhang won't go away.

"The only thing that might be better is that the there is an election coming in November of 2012 and in the meantime Mr. Obama and his friends are going to spend all of the money they can trying to get reelected. So all of those people are going to feel a lot better and they are going to spread a whole lot of money around, but be careful about 2013, because 2013 is going to be a mess."

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Going to Get Worse

"The problem of too much debt is not solved by more debt." - Jim Rogers
With markets rallying since Thanksgiving, not everyone is optimistic as we close out 2011. Among those is legendary commodity investor Jim Rogers who cautioned that Europeans may not find a solution to their problems and why the next crisis in the U.S. might be worse.

Jim Rogers even believes the U.S. might head into a depression as we are "shooting all our bullets" and the U.S. continues to go deeper and deeper into debt. On the market, Rogers believes the market may rally short term but believes no real rally will occur due to the underlying problem of high debts not being solved. What he continues to be bullish on are commodities and certain currencies. Currently, Rogers expects gold to decline further as it has gone up 11 years in a row without a major correction. Yet, he is not buying either gold or silver at current levels, but said he will purchase if their prices fall.
GuruFocus "Real Time Picks" reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 3 days after the date of the transaction. This is just one of the features provided with GuruFocus Premium Membership.
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Friday, December 2, 2011

Jim Rogers: QE3, Shorting Stocks, Long Commodities and Currencies

Jim Rogers, chairman of Rogers Holdings, talks about his investment strategy. from Singapore with Susan Li on Bloomberg Television's "First Up" on Monday 29 Nov.  Rogers also comments on Europe's sovereign debt crisis, Federal Reserve monetary policy and the U.S. economy.

Rogers says he does not pay too much attention to the rating agencies upgrades and downgrades as their track record has left him with very little confidence.  Markets may rally on certain short-term fixes or good news, but until some resolution comes to the mountainous sovereign debt, no rally will last.

He also commented that QE3 is already underway if you look at the huge jump up of M2 money supply since August.  In Rogers words, "they are buying something."  He also thinks the world could be better off without the central banks money printing press.

Regarding his current investing strategy, he said he's shorting European stocks, American technology stocks
(He is shorting a package of U.S. technology stocks including Microsoft calls), emerging market stocks, but long commodities and currencies (Rogers owns some euros).
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Investors Clinic: Jim Rogers on Metals and Other Commodities

As part of the Alternative Investing special report, CNBC is launching Investors Clinic – the place for investors to get tips about what's hot and what's not, how to diversify and how to get exposure to exotic or new asset classes.


The first in a series of interviews was commodities bull Jim Rogers, who shared his views on metals - especially precious metals – and other investment opportunities.

Rogers answered viewer questions during the on-air interview and in an e-mail interview with CNBC afterwards. Here is a selection of his answers:

Q: Will gold be the best and safest investment?

With gold hitting record after record high, many investors have been keen to get exposure but Rogers believes a correction is due.

"I suspect agriculture products would give better protection during the next several years although gold and silver will be good too – perhaps second best," Rogers said.

He predicted that gold would go through a correction - as the precious metal's price has risen for 11 years in a row - and investors could use this as an entry point.

If the price of gold goes to $1,200 per ounce, Rogers said he would get "extremely excited" about the metal and he would "probably get more interested" at $1,600.

Q: The best way to invest in gold: paper of physical gold?

Some analysts have said the rise in the price of gold may have partly to do with the proliferation of the so-called "paper gold" - exchange traded funds or ETFs using the precious metal as an underlying asset.

"The paper market in gold and precious metals can go both ways because it's a lot easier for people to sell their gold," Rogers said, adding that he owns "some of both."

"There's a lot more speculation now in the paper gold market as it's easier to buy and sell," he said.

Q: What about investing in copper?

In November, the price of copper fell around 8 percent and the metal is down more than 20 percent this year. It is the first annual fall in the price of copper since 2008. Some market watchers have dubbed copper "the poor man's gold."

"I own some copper, but I expect to make more, percentagewise, in agriculture and precious metals," Rogers said.

Q: And diamonds… are they really forever?

The world's biggest miner, BHP Billiton announced on Wednesday it was reviewing its diamond business and may sell the operation. But from an investor's point of view, diamonds are still a good option.

"I own diamonds and expect good things over the next several years," Rogers said. "I imagine things like rubies, sapphires, emeralds, and jade will do better percentagewise. I own them all."


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Thursday, December 1, 2011

Jim Rogers reaffirms love for gold, not selling now

NEW YORK (Commodity Online): Jim Rogers once again affirmed his love of Gold and indicated that if prices drop to $1200/oz, he would get extremely excited.

In a recent interview with CNBC, Rogers says, "Somewhere down the line gold will have a correction. Gold will continue to do what gold does best. Just give it a chance. I own gold and I'm not selling my gold”

He stated that if he had to buy a precious metal today, he would consider Silver since it is 40% below its high whereas Gold is trading just 20% off its highs.

Rogers has been a staunch believer in the potential of gold prices and has often publicly stated that one should hold gold and silver in these times of economic crisis. He also believes in the opportunity that lies in Agriculture.

Jim Rogers was the co-founder of the Quantum Fund and is also the creator of the Rogers International Commodities Index (RICI).


Jim Rogers Not Impressed with Central Bank Actions

Jim Rogers thinks that the coordinated actions by the central banks will "make the problems worse."
Five central banks agreed to lower swap lines. The Federal Reserve, the European Central Bank as well as the central banks of Canada, Britain, Japan and Switzerland agreed to lower the cost of existing dollar swap lines by 50 basis points starting from December 5.

He thinks that the stock market will rally for a day or two but the core problem of too much debt has not been addressed.

Monday, November 21, 2011

Jim Rogers on the Silver Price - Beacon Equity Research


If traders like gold at today's prices, then silver should be bought first, says famed commodities bull Jim Rogers.

Speaking with India-based Economic Times (ET), Rogers, the man who looks and dresses like a gentleman plantation owner from Mississippi (without the accent), said, of the two precious metals, gold and silver, he prefers silver at this time.

“I would prefer silver because it is still depressed on a historic basis. Silver is 30 percent below its all-time high, he said. “Gold is 10 percent below its all-time high. I would prefer one just on relative value, silver is probably better.”

Talking like a bona fide billionaire, Rogers isn't going to play with charts and suggest a time frame for gold's ascent above the magical $2,000 mark. Instead, the alumnus of Balliol College at Oxford went out on the limb and expects gold to reach $2,000 by 2020.

Like many people in Asia, especially in India, where the audience for the Economic Timesis largest, he owns gold because he wants it—just as he likes all commodities that he can trade in a futures market. India is expected to import more than 1,000 tons of gold this year, according to the World Gold Council (WGC)—that's an equivalent amount of Switzerland's total gold reserves—imported into India in one year.

“Gold would certainly go to 2,000 [USD]. I do not know when it is going to go to 2,000, but I know it certainly would during this decade,” Rogers sidestepped the question of when he thinks gold breaks the 2k mark. “Whether it's an asset class or a safe haven is irrelevant, the fact that I own it is because I want it. The price would go higher.”

Maybe Monday's interview with Fox Businesswas a more suitable place to break any bad news from the 69-year-old father of two toddler girls. In India, the population isn't happy with high gold prices, as a lot of the precious metal is bought for ceremonial and cultural reasons.

In the Fox Businessinterview, Rogers warned of a coming meltdown next year (or 2013) in the world markets, much worse than 2008-9. As he has repeated said for several years, it's the US dollar that's the most troubled currency today, though blowups in other currencies throughout may precede the fall in the Greenback.

“We still have serious problems throughout the world. The U.S. is in fact in worse shape than Europe,” Rogers said, Monday. “Europe is getting the press these days because the debts are coming due but America is the largest debtor nation in the history of the world.”

And as far as the euro is concerned, Rogers believes the currency won't make it, which adds another 27 percent to the dollar's 61 percent of total reserves held by central banks expected to decline in purchasing power throughout this decade. Under that thesis, he believes investors need to hedge themselves through commodities holdings.

“I own the Euro, but longer term it is going to be a disaster for all of us, the whole world, especially for Europe, because this is not solving the problem,” he told ET. “A year from now there is going to be more debt in Greece and in Europe. Two years from now, there is going to be more and more debt. Debt just keeps going up and nobody addresses the real fundamental problem.”

 

Sunday, November 20, 2011

Jim Rogers: China is where the money is - China Daily


SHENZHEN – Jim Rogers, co-founder of the Quantum Fund, said Thursday at the China Hi-tech Forum 2011 that he is still confident that China is where the money is.

He also told the forum that Chinese cities, including Shanghai, Shenzhen Dalian and Zhengzhou, will be financial hubs worldwide.

He explained that although China may have its problems, it is the largest creditor worldwide and has saved enough for a rainy day with its huge foreign currency reserve.

"It's now raining and the United States has saved nothing," he said.

The renminbi, China's currency, will be the only possible currency to replace the US dollar but it needs to be convertible, he added.

Shanghai was once the financial hub between New York and London, something that happens again, he said.

As American laws and regulations are pushing commodities trading outside the United States, the sector could potentially turn to Dalian and Zhengzhou if China decides to open the markets, Rogers told chinadaily.com.cn.

Many Chinese have yet to realize that China will be the center of the world and that the 21st century is the century of China, he said.

The forum is part of the 2011 Hi-Tech Fair 2011, which is held in Shenzhen on Nov 16-21 every year.

Wednesday, November 16, 2011

Global Collapse a Done Deal, says Jim Rogers - Beacon Equity Research

By Dominique de Kevelioc de Bailleul

As Rogers moved from India's Economic Times, to Fox Businessand over to his latest stop, CNBC, his message to investors is: If you think 2008 was bad, 2012 will be worse.

"We're certainly going to have more crises coming out of Europe and America; the world is in trouble,” Rogers told CNBC. He said everyone has spent beyond their means, public and private, “and it's all coming home to roost.”

Rogers' more dire message recently speaks to the consensus of other thoughtful and unencumbered minds of economics and finance this week, especially today, as Bloombergfeatured gold standard advocates Jim Grant and Jim Rickards during a lengthy joint discussion with the two men on Money Moves. Rogers doesn't refer to gold standards much as Grant and Rickards have lately, but he has discussed his fear of central bankers and their printing presses running wild in response to the crisis. Today, he believes the global financial system cannot weather a multiple of more debt added to the already highly leveraged central banks balance sheets prior to 2008.

“Last time, America quadrupled its debt. The system is much more extended now, and America cannot quadruple its debt again,” Rogers said. “Greece cannot double its debt again. The next time around is going to be much worse.”

Jim Grant echoed Rogers, during today's Bloomberginterview, pointing out that by his calculations the NY Fed is “leveraged more than 100 to 1,” while in the next breath chiding the ECB for its profligate activities during the crisis, as well.

“Italian bond yields didn't drop on their own,” he said, referring to this morning's miraculous 170 basis points turnaround in the Italian 1-year bill rate moments following the auction.

In fact, piling on to the sudden slew of complaints about the ECB, JP Morgan's Michael Cembalest issued a note today, dispelling the rumor that the ECB has been so stingy, thus underscoring Rogers' point, that, though money has been printed in gigantic quantities, the problem has just gotten worse—not better—not more liquid—but increased insolvencies.

“To-date, that’s what [bank support] the ECB has done: of the 1.1 trillion Euros extended to European banks and governments (through sovereign/covered bond purchases and repo), 970 billion has been given by the ECB,” JP Morgan's Cembalest stated.

So with both the Fed and ECB piling more debt a top unserviceable mounds of previous debt, the critical mass or larger debt levels and higher interest rates set off the next crisis.

According to Martin Armstrong, founder of Princeton Economics, the breather between crises shorten until the final irredeemable breaking point is reached. Rogers believes that point is upon us, now, to as far out as 18 months. Those following Rogers know how conservative he is when discussing time horizons, which may suggest that an event may come closer to James Turk's expectation of mere weeks.

And he concluded on that point, "In 2002 it was bad, in 2008 it was worse and 2012 or 2013 is going to be worse still - be careful.”

Tuesday, November 15, 2011

Gold Price "Will Reach $2400" says Jim Rogers - BullionVault

THE DOLLAR Gold Price is set to reach $2400 per ounce, according to legendary investor Jim Rogers, cofounder of the Quantum Fund with George Soros in 1973. Despite his prediction, Rogers says he is more interested in Buying Silver.

The Gold Price "will easily go to $2000, but it will reach $2400 over the course of the bull run, which has years to run," Rogers told CNBC this week.

Rogers also predicts the Gold Price will enter bubble territory – though he says this may be some way off yet.

"The way bull markets work is they go up and up and then by the end they turn into a bubble and that will happen to gold...[but] that could be five years, 18 years or six years...I own both, I'm not selling either but if I had to buy one today I would buy silver."

HSBC meantime also expects the Gold Price to breach $2000 per ounce in the near future.

"We are looking for an average of $2025 for next year with a wide trading range of $1700 to $2300," says HSBC precious metals analyst James Steel, adding that he expects "highly volatile markets".

Get the safest gold at the lowest possible price with BullionVault...


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Monday, November 14, 2011

Gold Price "Will Reach $2400" says Jim Rogers - BullionVault

THE DOLLAR Gold Price is set to reach $2400 per ounce, according to legendary investor Jim Rogers, cofounder of the Quantum Fund with George Soros in 1973. Despite his prediction, Rogers says he is more interested in Buying Silver.

The Gold Price "will easily go to $2000, but it will reach $2400 over the course of the bull run, which has years to run," Rogers told CNBC this week.

Rogers also predicts the Gold Price will enter bubble territory – though he says this may be some way off yet.

"The way bull markets work is they go up and up and then by the end they turn into a bubble and that will happen to gold...[but] that could be five years, 18 years or six years...I own both, I'm not selling either but if I had to buy one today I would buy silver."

HSBC meantime also expects the Gold Price to breach $2000 per ounce in the near future.

"We are looking for an average of $2025 for next year with a wide trading range of $1700 to $2300," says HSBC precious metals analyst James Steel, adding that he expects "highly volatile markets".

Get the safest gold at the lowest possible price with BullionVault...


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Rogers in town to buy the farm - Stock and Land

COMMODITIES trader Jim Rogers is forecasting the beginning of a soft commodities and rural land boom and says it will start in Australia.
Mr Rogers, known for his investment prowess alongside George Soros, is in Australia to launch a new rural land fund which is seeking to raise up to $350 million to buy farms in northern NSW, according to The Australian Financial Review.
Mr Rogers said the growing risk of inflation as well as growing demand for soft commodities from Asia would fuel the demand for agricultural land.

"It's the farmers, the producers who are going to be in the captain's seat when the prices go through the roof," Mr Rogers said.
Well-known for predicting the start of the commodities rally in 1999, Mr Rogers said soft commodities were about to rise.

"The shortages are going to get worse and the prices for land will go higher."
The new unlisted closed end fund Mr Rogers is advising, called the Laguna Bay Pastoral Company, is testing the domestic investor market first before opening the opportunity to offshore groups.
It will partner with farmers who have been earning yields that the top 10 per cent of Australia's farmers are now earning.
The farmers will manage the properties and suggest what surrounding properties would be wise for the fund to purchase. So far there are 16 properties identified for acquisition covering 80,000 hectares.
"We have shortages of everything from oil to food and on top of that we have governments printing more money. Put the two together and you have some serious inflation coming down the road," he said.
"Governments will eventually put in place price controls but if you tell someone they can only make so much money he is going to stop producing. The Chinese are seeing this and that's why they are out looking to buy assets. They are down here [in Australia] trying to buy up more.
"I applaud them," Mr Rogers said of the sovereign wealth funds that have been buying farms. "We don't have enough farmers or enough capital so if somebody doesn't buy those farms then we are not going to have any food.
His comments come as Australia, New Zealand and Brazil review their foreign investment rules in relation to agriculture.
Australia holds its first senate hearing into foreign investment rules into farms on Tuesday week.












Friday, November 4, 2011

What Jim Rogers Might Say About October's Market Rally - Investorplace.com

October was nothing short of incredible for the stock market — the S&P 500 gained almost 11% for the month and the Dow Jones Industrial Average rose about 10%. The euphoria is palpable. But will it last? Sure, the markets are thriving right now, but what are the bears thinking about as the economies of most developed nations are stagnating?

It might be interesting to delve inside the mind of a professional not sold on the market rally continuing. I’ve mixed some conjecture with some of his paraphrased comments to give you an idea of what iconic investor Jim Rogers might have to say about some facets of October’s rally, as well as what to expect looking forward:

We’ve seen this movie before. Rather than letting the banks fail, European leaders are going to bail them out. Quantitative easing like the kind used by the Federal Reserve doesn’t solve anything. If we’ve learned just one thing from what’s happened in the U.S., it’s that letting banks fail helps the system — it doesn’t hurt it. The same holds true in Europe.

Why is there a need to save bondholders? There are ways to protect shareholders to a certain extent, but at the end of the day, when all the banks are put in a room, it should be easy to choose those deserving of a second chance. Not letting banks fail only prolongs the inevitable. Let’s fix the system permanently rather than applying a Band-Aid, which is all this really is.

“Scarcity” is a word we’ll hear often in the future. As the population of the world just hit 7 billion people and will hit 8 billion within another decade, commodities are going to be the most sought-after asset anywhere. While the markets have done great in October, it’s been 12 years of going nowhere, and we should expect more of the same.

The Dow Jones Industrial Average increased just 25% between 1964 and 1982 — less than 2% a year. While stocks are bad, bonds are worse. The 30-year run on bonds is over. As we see from the Occupy Wall Street protests, social unrest is only going to get worse. Investors can protect themselves from both a sideways market and the scarcity that exists in foods, fuels and metals by investing in indices that own all three.

Of the three main commodity groups, agriculture is by far the most promising. Several factors make this so: First, nobody wants to be a farmer anymore. Everybody wants to get their MBA. Add to this the population growth alluded to earlier, and you have the perfect storm. Shortages will get worse and worse. Those who own the means of production, as well as the arable land necessary to produce food supplies, will win the battle. Everyone else will sputter along.

As mentioned in the opening paragraph, the S&P 500 is up 11.8% in October. The market has gotten quite frothy. In fact, eight out of 10 S&P 500 sectors are extremely overbought, according to Bespoke Investment group. Valuations for tech stock IPOs like LinkedIn (NYSE:LNKD), Fusion-IO (NYSE:FIO) and Youku.com (NYSE:YOKU) have gone through the roof. As of Oct. 28, the three stocks average a price-to-sales ratio of 22 compared to an industry average of 5.1 and an S&P 500 average of 1.1. Shorting tech stocks and going long on agriculture stocks like Deere & Co. (NYSE:DE) makes an awful lot of sense.

Looking at the long term, China will be the winner in the 21st century. For now, stocks seem expensive — and with the possibility of stagflation on our doorstep, the best form of protection is to short tech stocks and emerging markets and invest in commodities instead.

As of this writing, Will Ashworth did not own a position in any of the aforementioned stocks.

Article printed from InvestorPlace Media, http://www.investorplace.com/2011/11/what-jim-rogers-might-say-after-october-rally/.

©2011 InvestorPlace Media, LLC


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Investor Jim Rogers Has Gloomy Outlook for U.S. Markets

International investor Jim Rogers argues the U.S. markets are inferior to Europe and the next economic slowdown will be much worse than 2008.

Thursday, November 3, 2011

Agriculture ETF Showdown: CROP Vs. MOO - Seeking Alpha

By Jared Cummans


If Jim Rogers has taught us anything, it's that agriculture exposure is a must for any investment portfolio. But buying corn or soybean futures and rolling on a steady basis seems impractical for keeping allocations to what might make up 1% of your overall holdings. Beyond futures products, there are a wide variety of equities tied to the agriculture sector, but picking the right one can be tricky business. Enter agribusiness ETFs. Products dedicated to offering exposure to a wide variety of firms tied to the agriculture sector, giving investors an equity spin on their favorite commodities like sugar, cotton, and cocoa [see also Three Things Wall Street Journal Didn’t Tell You About Commodities].


Currently, there are two strong ETF options available to investors; both come with their set of advantages and disadvantages that may make them right for one kind of investor, but completely wrong for another. Below, we outline the similarities and differences between the IQ Global Agribusiness Small Cap ETF (CROP) and Market Vectors-Agribusiness ETF (MOO) to help investors pick the right product for their goals.


The two funds track similar indexes, though CROP’s respective benchmark has a major focus on small cap firms while MOO’s DAXglobal Agribusiness Index has a number of larger household agriculture names. As far as underlying holdings go, the two funds could not be more different. CROP has a total of 71 holdings with 47% of assets dedicated to the top ten holdings. The fund is over 75% international and is dominated by mid cap companies, showing that it's always good to look under the hood of a product as its name and exposure do not necessarily line up. Top companies in this product include Tractor Supply, Viterra Inc, and Smithfield Foods [see also Invest Like Jim Rogers With These Three Agriculture Stocks].


As for MOO, the fund features less diversity, with just 45 total securities and over 57% of assets dedicated to just ten of those. The mostly-large cap MOO is home to big names like Potash, Monsanto, and Deere & Co. For investors looking to cash in on the U.S. robust farming success, MOO features an allocation of over 37% to the States, while countries like Canada and Singapore come in as the next two largest geographic weightings. Though MOO is large cap, the majority of its country allocations lie in emerging markets, while the small-cap CROP focuses on developed markets. Though this likely has little impact on either fund, it is certainly something to keep in mind before investing [see also 25 Ways To Invest In Silver].


From a trading standpoint, the two funds are apples and oranges as far as comparisons go. MOO has a hefty $5.4 billion in assets with an average daily volume topping 1.6 million. CROP, on the other hand, has just $40 million in assets and an ADV of 34,000. Keeping in mind that CROP is still in its infancy, the fund has grown quite nicely, but for active traders looking to quickly shift positions, MOO has the upper hand.


Comparing the two on historical performance is tough given that CROP debuted in March of this year. Since its inception, the fund has shed 10.9% while MOO lost 12.3% over that same time period, putting the funds relatively in line on a performance basis. The result does come as a bit of a surprise in that the small cap product is outperforming its large cap counterpart; in rough markets like we are enduring today, small cap products tend to fall behind while larger-based funds are better able to hold their ground [see also Dividend Special: Top Companies In Every Major Commodity Sector].


Looking specifically at MOO, which has been around since 2008, the fund has chalked up some nice returns. The product is down about 11.6% on the year (a typical result given the rough few months for commodities) but is up nearly 93% in the trailing three year period, making this an attractive long term option.


The fee structure of these two products is another important factor that investors will need to take a close look at. CROP comes at a price of 75 basis points, not terribly expensive given the small cap nature of its exposure. MOO, however, charges just 59 basis points in comparison. While this certainly makes it the cheaper option, it is still relatively expensive for a large cap product and may turn some investors off. Unless you are a heavy hitter, the 16 point spread won’t hit you too hard; a $10,000 investment would net to about a $16 annual fee difference in the two funds. But for those looking to make big bets, MOO’s cheaper expenses may save you a fair amount of money over the long term [see also Commodity Investing: Physical vs. Futures].


All in all, both funds come with a pretty solid methodology and make for enticing investment options. While no fund is better than the other, your investment style will certainly have an impact on which product is right for you. For the active trader, or risk-averse investor, MOO’s supreme liquidity and large cap structure will make for a stable investment. But CROP’s small cap build-out makes it a prime candidate for high growth, something that MOO cannot offer. Also consider that CROP has a much better diversity in its holdings than its competitor, which could have a significant impact over the long run.


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EU Blowup, Dollar Down?! QE Done Deal - Beacon Equity Research

Greek Prime Minister George Papandreou is resigning; now, he's not—just a rumor. Referendum scheduled for the Greek people; now, it's not.

Berlusconi cannot leave his underage tarts for a day to prepare for a G-20 meeting. Italian bonds are on life support from the ECB from a near blowout Tuesday of more than 450 basis points to the German 10-year bund.


Dexia collapses. Who knows what counter-party risk is stuffed?


The new ECB chief Mario Draghi surprises the market with a 25 basis points cut at its 'marginal lending facility'. Portugal, Spain and Ireland salivate over getting a similar deal given to Greece, teetering banks in France and German. Now French banks are under severe pressure in a circle-jerk default scenario throughout the EU.


Japan, Switzerland, UK, and China are trashing their currencies to bits along with the euro—and the result of all of this Argentina-style mayhem? The USDX drops!


In fact, the rally from the 73.42 low of Jul. 28 to 76.92, as of Thursday, is a whopping 4.8 percent. That's the extent of the rally into the 'safety' trade. CNBC calls US Treasuries the 'safety trade', yet calls gold a bubble trade after the yellow metal corrected back to the planet Uranus following its trip to Pluto.


Famed commodities trader, Jim Rogers of Rogers Holding told MarketWatch.com in mid-October that the dollar is—how is it said, gracefully?—fading as a trusted reserve currency.


“The U.S. dollar has started fading as the world's reserve currency,” Rogers said, as the 68-year-old American citizen, now Singapore resident, complained of dollar debasement policies by the Fed, according to MarketWatch's John Prestbo.


Rogers used the words, “starting to fade.” Starting? It's a done deal, Rogers. Financial journalist should no longer use the term 'reserve currency' within the same sentence with the word 'dollar'. And to make matters worse, the villainous half of the former Rogers-Soros partnership at the Quantum Fund, George Soros, beat Rogers to the punch.


“The big question is whether the U.S. dollar should be the reserve currency; it no longer is, it shares that role with the euro, other currencies, and commodities,” Soros stated at the Bretton Woods II conference in April. “But it’s not just gold being used as a substitute, but oil too, which is putting upward pressure on the market.”


Students of the Weimar Republic days in Germany chuckle at those silly Germans who thought sterling, dollar, Swiss and French francs were strong against the reichsmark in the early 1920s, when in fact, the reichsmark was collapsing. Aren't financial journalist and TV commentators making the same mistake when discussing the US dollar? (see When Money Dies author Adam Fergusson discussion with Goldmoney's James Turk on YouTube.com)


What started in earnest in January of 2010 with the blow-out of Greek bond yields has come down to a pathetic display of, not only the cartoonish leadership of the EU, but the fatal flaws of a framework for the euro currency at the outset.


No one doesn't know how bad the situation is on the other side of the Atlantic. But the obvious weakness in the dollar throughout this sordid affair is glaring—to say the least. As US investors chuckle at the EU, they do so while neglecting to notice the US dollar train wreck about to smack them in the face.


Is there any question that front-running of an announcement by the Fed of more QE is underway? How dare those silly Europeans debase their currency faster than the US dollar. Thank goodness the Bernanke is prepping to show who's still no.1 in the world!


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Monday, October 31, 2011

Jim Rogers: Greek Deal Won't Save Europe

Though pleased by the size of the haircut for Greek bondholders, international investor Jim Rogers says the deal isn't enough to save Europe, and the problem is likely to come back to haunt investors in the near term.

Rogers has welcomed last night's eurozone deal, saying the size of the haircut for Greek bondholders was much higher than he had expected.


"Never in a million years did I expect them to impose a haircut of 50 percent, this shows at least somebody is starting to accept reality," Rogers told Investment Week. However, Rogers says, "Politicians have delayed addressing the problem yet again."


"It will come back in a few weeks or a few months and the world will still have the same problem, but this time only worse because the European Central Bank and other countries will be in deeper in debt."


Rogers reiterated that widespread haircuts across Europe are necessary to truly resolve the crisis. "Greece is bankrupt, but others are too, and these haircuts will have to come back and be wider," he says, adding that this morning's global stock market rally had the potential to last for a while.


"There has been a major overhang, so we will see the easing of some pressure, but the problem will come back because the Western world still has not dealt with its debt," sys Rogers.


"Most European countries are increasing their debt rather than decreasing their debt. Until that changes, the problems are going to continue, just as they will in the U.S.," he added.


Bloomberg reports that the European Union’s agreement with banks for a voluntary 50 percent writedown on their Greek bond holdings means $3.7 billion of debt-insurance contracts won’t be triggered, according to the International Swaps & Derivatives Association.

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Sunday, October 30, 2011

Rogers: Surprise 50% Greek haircut not enough to save Europe - Investment Week

Jim Rogers has welcomed last night’s eurozone deal, saying the size of the haircut for Greek bondholders was much higher than he had expected.

However, the veteran investor warned eurozone leaders have failed to address the crux of the problem, by only enforcing haircuts on holder of Greek debt. He said   the problem is likely to come back to haunt investors in the near term.

"It is good news. It is about time they started doing what is necessary. The problem is they have not dealt with anyone except Greece," said Rogers.

"Politicians have delayed addressing the problem yet again. It will come back in a few weeks or a few months and the world will still have the same problem, but this time only worse because the European Central Bank and other countries will be in deeper in debt," he added.

Rogers was surprised by the scale of the Greek bond haircuts, which will see boldholders accept a loss of 50% as part of the deal.

"Never in a million years did I expect them to impose a haircut of 50%, this shows at least somebody is starting to accept reality," he said.

However, Rogers reiterated that widespread haircuts across Europe are necessary to truly resolve the crisis. "Greece is bankrupt, but others are too, and these haircuts will have to come back and be wider," he said.

Rogers added that this morning's global stock market rally had the potential to last for a while.

"There has been a major overhang, so we will see the easing of some pressure, but the problem will come back because the Western world still has not dealt with its debt," he said.

"Most European countries are increasing their debt rather than decreasing their debt. Until that changes, the problems are going to continue, just as they will in the US," he added.

European leaders last night agreed a three-pronged deal to resolve the region's debt crisis.

The deal approved a mechanism to boost the eurozone's main bailout fund to €1trn (£880bn) in addition to the Greek haircut. Banks must also raise more capital to protect them against losses resulting from any future government defaults.

The framework for the new fund is to be put in place in November.


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Wednesday, October 26, 2011

When Looking At Agriculture, Don't Overlook Direct Investment In Farmland - Seeking Alpha

Many investment professionals, including the legendary Jim Rogers, believe agriculture commodities are only in the early-to-middle innings of a major "super cycle" of increasing prices. Yes, agriculture stocks have had their ups and downs and have not had a great year to date, but as this Barrons piece points out, the long-term theme is still compelling.

The argument for this is fairly simple. The number of people in the world is increasing, and projected to reach nearly 9.1 billion by 2050 according to the United Nations. Emerging markets nations like China and India are growing richer, and their citizens want to move up the food protein chain. Meanwhile, the amount of arable farmland has been decreasing.

In addition, as with many major trends in the world today, a large reason behind the rapid run-up in food prices is China's development. The huge increase in pollution and development has unfortunately had quite a negative effect on China’s farmland sector. In only 12 years, over 8 million hectares of farmland has been lost to development in China, and this article helps explain why. As China has massive foreign currency reserves, it is perhaps not surprising that they are looking to secure food supplies from abroad.

Just as an example,China is looking closely at farmland investing in Ukraine as well as agriculture investments in Brazil.

The question is what are the best ways for making money from the agricultural sector? One way is to invest directly into agriculture stocks such as farm equipment maker John Deere (DE), global seed giant Monsanto (MON) or fertilizer company Potash Corp of Saskatchewan (POT).

Another method is to invest in agricultural futures through Exchange Traded Funds (ETFs) such as AIGA on the London Stock Exchange or DBC in the U.S. which tracks an entire basket of agricultural commodities including corn, soybeans, wheat, cotton, sugar, coffee, cattle and pigs. These commodities ETFs try to track the spot price of the various commodities they include. The advantage of these stocks or ETFs is that they are easily tradeable by anyone who has an online brokerage account. The disadvantage, however, is that they are still financial instruments, and as such can fluctuate widely in price.

One option most individual investors tend to overlook is direct investment in farmland. In many ways, a farmland investment is more secure, stable and tangible then putting money into stocks. Farmland allows investors to still benefit from the global trends in agriculture, while providing much greater stability than agriculture stocks or commodities which can indeed fluctuate widely as this year has demonstrated.

Just to take one of the best examples of the efficacy of farmland investing, in the last 20 years farmland in the United States has never had a down year according to the National Council of Real Estate Investment Fiduciaries (NCREIF) in the U.S. demonstrates. Not surprisingly, many large institutional investors have been investing heavily in farmland the last several years. For example TIAA-CREF, one of the largest pension funds in the world, has recently made a large move into farmland investing.

Prices for farmland in the West - particularly in Europe - have already moved up considerably, reaching as high £17,300 per hectare in the northwest of England to take just one example. While there are considerable advantages in terms of political stability to farmland investment in Europe or the U.S., the real opportunities for spectacular gains lie in emerging markets such as Africa, which holds 60% of the world's remaining arable land suitable for farming.

While farmland investment has been dominated by larger institutions historically, in just the last two years a number of options have been developed for individuals. The most common is to pool a number of individual investors' capital together to purchase a large parcel of land, and then divide it into individual parcels as small as one acre available to purchase. These farmland investments for individuals generally pay a regular yearly dividend from the sale of crops such as rice or wheat, and also provide the opportunity for long-term capital gains if the farmland increases in value. Retail investors are generally able to see their individual parcels, or else the project originator may actually sell its entire farmland investment, thereby allowing the individual small investors the opportunity to share in the upside capital gains.

There are now farmland investment options for retail investors with investment minimums starting as low as £1,950 per acre (approximately $3,100) for quality farmland in Africa, making it easily accessible by individuals and a great way to diversify. There are also direct farmland investments for retail investors in Europe, Australia and elsewhere. All of these target yearly income payments of between 9-15%, while also allowing investors to share in the upside of any capital gains as well.

There are, of course, risks with any investment, but by doing one's due-diligence and investing in the right structure with the right people and institution, farmland investment can be both safe and profitable for individual investors as well as large institutions.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: GreenWorld BVI is a boutique alternative investments firm and we represent a number of farmland investment projects mentioned in this article.


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Big-name gurus not too big to fail

By Howard Gold

NEW YORK (MarketWatch) — The market has been pretty rough these days for all of us. But some big-name investors are probably doing worse than you are.

William H. Gross, the head of Pimco Total Return Fund /quotes/zigman/132344 PTTRX +0.09%  and the most illustrious bond investor of our time, is reeling from a big move out of U.S. Treasurys early in the year.

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John A. Paulson, Mr. “Greatest Trade Ever,” is anxiously awaiting the end of the month, when he’ll see how many of his investors cash out of his Advantage hedge funds after heavy losses this year.

Both Gross and Paulson are big names who’ve had rough patches and their experience shows how tough it is for even the best to beat the market consistently over long periods, especially if managers make big macro bets on the economy or stray beyond their areas of expertise. (Paulson’s spokesman declined my request for comment, and Pimco didn’t respond by deadline.)

Bill Gross has presided over Pimco Total Return for nearly 25 years. During that time, he built it into the U.S.’s biggest bond fund, with $242.2 billion in assets as of Sept. 30. Forbes estimates his net worth at $2.2 billion.

Gross has fame as well as fortune, appearing regularly on CNBC, where he is lionized, as well as in the venerable Barron’s Roundtable. He’s also well known for his clever commentaries, which are posted monthly on Pimco’s website.

In his March missive, Gross explained his big call for this year: He was dumping Treasurys because of what could happen once the Federal Reserve ended its latest round of quantitative easing (QE2).

“Who will buy Treasurys when the Fed doesn’t?” he wrote. “Yields may have to go higher, maybe even much higher, to attract buying interest.”

It seemed plausible at the time. But when the economy weakened and the European debt crisis flared up again, investors did what they did in 2008 — rushed for the safety of U.S. Treasurys. Amazingly, that occurred even after Standard & Poor’s cut the U.S.’s AAA rating in August.

Read Howard Gold’s column in which Gary Shilling predicts a new recession and favors Treasurys in MoneyShow.com.

The flight-to-safety rally drove the yield on the 10-year Treasury note down to a 65-year low of 1.72% on Oct. 4, from around 3.5% in early March, a humongous move which Pimco shareholders missed. Pimco Total Return, which has beaten its benchmark over every time period since its inception, has been near the bottom of its peer group over the past year.

Gross admitted to losing sleep over it, and finally, predictably, he threw in the towel. In a piece entitled “Mea Culpa,” Gross wrote: “This year is a stinker. Pimco’s center fielder has lost a few fly balls in the sun.”

“As Europe’s crisis and the U.S. debt ceiling debacle turned developed economies towards a potential recession, the Total Return Fund had too little risk off and too much risk on,” he continued.

But now, having been too optimistic about the economy, Gross seems to be going to the other extreme. Pimco started loading up on long-duration Treasurys late this summer, anticipating that the Fed’s Operation Twist would gobble up 30-year T-bonds.

We’ll see if he’s right, but I wonder whether this kind of all-or-nothing bet is really beneficial to investors. Actually I don’t wonder, but I’ll get to that later.


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China - Wishful thinking by US media

Warning signs of cracks in China's economy are surfacing, but analysts disagree about whether they portend a crash or merely a need for caution. The U.S. Senate bill that would place tariffs on imports from a country found to be manipulating its currency, clearly aimed at China, is raising more red flags.
 
The fallout from either of these situations could be devastating to U.S. agricultural exports: In fiscal year 2010, China imported ag products worth $20.3 billion from the U.S. -- 18% of the total -- and 2011 most likely was even higher.
China is an especially important market for soybeans. They account for more than half of total U.S. exports to China and, conversely, China takes more than half the soybeans we export -- and about a quarter of U.S. soybean production.
China's economy could be headed for a breakdown, according to Patrick Chovanec, an American who teaches in the International MBA Program at the Tsinghua University School of Economics and Management in Beijing. "I've been saying since the year began that China is due for a correction, and I believe it could be a lot worse than most people expect. Exactly how it will unfold or whether we've already reached a tipping point remains to be seen," he said.
Chovanec cites changes in the relationship between the new-home market and the resale market as an indication that developers have overbuilt on speculation and now are over extended.
"With credit conditions tightening, they systematically ran through the credit lines available -- first, the banks, then high-yield bonds, then private wealth management vehicles that have been popping up all over China, then loan sharks. Finally, with no options left, they had to start selling some of their inventory at whatever price they could," Chovanec said.
This led to collapsing prices on new homes. In Shanghai, for instance, sales of new properties in the first half of September were down more than 50% from a year earlier, despite record-high inventories.
"Well, the government has been targeting urban coastal real estate to control inflation," Jim Rogers, investor and best-selling author, told DTN. "So this is a sign their policy moves are working."
What's different in China vs. the housing mess in the U.S., said Rogers, is that "In the U.S., you could buy four or five houses with no job and no money down. Nowhere in China can you do that."
China's consumer price index is still rising at more than 6%, but the regulated deposit rate at banks is 3.5%. "As a result, China's banks recently have seen a rush of withdrawals as savers seek higher yields elsewhere," said Chovanec. China Securities Journal reported that deposits at China's four biggest banks fell $65.7 billion in the first half of September -- and the money was channeled into speculative assets.
"It is now becoming clear that the actual yields being generated in China are not living up to what was promised, and this is showing up in valuations of stocks and bonds," Chovanec said. This is affecting the value of China's currency, the renminbi. "Speculators now may be rushing to turn their renminbi into dollars to take their money out of China."
However, based on the latest Purchasing Manager Index, released last week, he concludes, "Whatever cracks may be emerging, China's economy has not yet turned the corner to a 'crisis' moment. But tensions and contradictions lurk below the surface, and the evidence is mounting that the fabric of China's investment-led growth is starting to fray and unravel."


URRENCY TRADE WAR
The renminbi, or yuan, became China's currency in the late 1940s, but was basically used domestically, with U.S. dollars used for trade through the end of the 20th century. As trade grew, it was pegged to the dollar, though since 2005, it has been allowed to float in a narrow margin, based on a market-basket of currencies. Many countries argue that the renminbi is as much as 35% to 40% undervalued, making Chinese products cheaper in world markets, and pressure is increasing for the government to let the currency trade freely.
Now, a bill in the U.S. Senate would require the Obama administration to apply tariffs on imports from countries that manipulate their currency when the White House determines that a currency is misaligned. A country so accused would have 90 days to rectify the situation before the tariffs went into effect.
Earlier this week, China warned that passage of the bill violates the World Trade Organization's rules regarding protectionist tariffs and could provoke a trade war. Furthermore, in a statement on China's official government website, Ma Zhaoxu, spokesman for the foreign ministry, reiterated that Beijing's position is to continue "strengthening the flexibility of the renminbi exchange rate," implying that the Senate's radical move, at the very least, is unnecessary. The renminbi has appreciated 7% since June 2010, when the central bank loosened controls.
"I really hope someone stops this," Rogers told DTN. "No one has ever won a trade war. Ever. This could bring the world into depression. Why, it could cause World War Three. It could play out the way Smoot-Hawley did in the 1930s -- it's a 'beggar thy neighbor' policy. When you slap someone in the face, what do they do? They react. Then it goes back and forth. The U.S. wants a cheaper dollar relative to the renminbi. That will make other countries unhappy. They will react."
What might the Chinese do? "Well, for one thing, they could not buy U.S. bonds -- or sell the ones they hold," Rogers said. "That would pressure interest rates in the U.S. How would the government finance its debt? It could lead to even higher deficits."
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Buy Emerging Market Stocks After Their ‘Final Collapses’: Rogers

U.S. stocks are outperforming emerging market stocks. They have outperformed in 2011 and have done so since early 2010.

This is very counterintuitive because the performance of the equities market is predominately driven by two macro factors: economic growth and inflation.

U.S. economic growth has been much slower than emerging market economic growth. U.S. inflation is among the lowest in the world (even less than Europe's).

One would therefore expect the U.S. stock market to be one of the worst-performing in the world.

Below are charts (from Google), of three different times frames, comparing the performance of the Dow Jones Industrial Average versus Hong Kong's Hang Seng Index and the MSCI EAFE (Europe, Australasia, and Far East) Index Fund ETF, which tracks the performance of major non-U.S. equity indices.

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The first chart shows the outperformance of U.S. equities in 2011. The second chart shows that the Hang Seng Index, and the MSCI EAFE to a lesser extent, essentially missed the 2010 QE2 rally.

There are some reasonable explanations for this.

Monetary inflation in the U.S. funneled into the U.S. stock market. Meanwhile, monetary inflation in countries like China were more reflected in the properties market.

Emerging market countries have also had to tightened monetary policy recently in response to inflation, which dampens economic growth.  

Moreover, the decline in emerging market assets in recent months reflected a flight-to-quality trade.

Perhaps most importantly, however, emerging market stocks were extremely overvalued and still have not deflated.

The third chart shows that the Hang Seng Index was likely overvalued 2007 and again in 2009 and 2010. It began deflating in 2011. That process, however, may be far from over.

Many experts believe that in the very long term, investors clearly need to be in high growth countries like China.

In the short-term, however, it may be a foolish idea to jump in.

Emerging market equities "have underperformed partly because they overperformed before," international investor Jim Rogers told IBTimes.

Rogers said these emerging market stocks will be attractive buys again after they have had their "final collapses."

For the relatively poor performance of the Brazilian and Indian stock market, he also blamed their "bad policies" and "huge debt problems," respectively.


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Tuesday, October 25, 2011

Silver Price to Regain Bullish Momentum

While the gold price lost around 15% after topping above $1,920 per troy ounce in early September, the price of silver is currently trading at a discount of nearly 40% compared to its record high of $50 per ounce (which it came close to reaching in late April). However, investors are well-advised not to judge the current market situation too quickly, since the fundamentals underpinning the rise in gold and silver prices remain intact. James Turk discusses some of these fundamentals – and a key formula for determining whether or not gold is overvalued – in a special article for the King World News Blog, released yesterday.


The debasement of currencies by central banks, combined with continuing problems in the banking sector have led to mounting fears of sovereign defaults among from industrialised countries. These fears have been the driving forces behind gold and silver’s strong price gains. Silver's sharp price decline of around 40% has led to frantic buying from those eager to “buy the dips”. This is especially true in the USA, Canada and many European countries – and last but not least China and India. Indian metals experts and bullion dealers estimate that sales of the white metal will jump by 30% in the course of this year's festival season.



Many analysts are also expecting China's silver consumption to rise further as well. The affordability of silver versus gold or platinum on a per-ounce basis is making the white metal even more attractive for many investors who have up until this point not been involved in the gold and silver markets.


However, Shreekant Jha, managing director of the company PJ Commodity Ventures, said that he would sell gold as he expects the yellow metal to continue trading in a sideways direction over the short-term. N Prasad, CEO of Safe Trade Advisors, believes that investors should currently favour silver over gold. His opinion is shared by other analysts and renowned market experts such as Eric Sprott and Jim Rogers, who both think that silver will outperform gold over the next decade; Sprott thinks that silver will be “the investment of the decade”.


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Jim Rogers' Recent Gold Call Looks Right - Forbes


Commodities guru Jim Rogers looks to be right yet again on gold prices.  Gold futures are down over 11% in the last five days, with the popular SPDR Gold (GLD) exchange traded fund down yet again Wednesday, this time another 2.75% to $156.22.  Rogers, a long term commodities bull, told The Economic Times newspaper in India this week that gold prices were bound to correct short-term.


Forbes ran a pick up of part of the interview on Tuesday.


In the interview, Rogers says that gold prices are likely to correct for as long as two months and $2,000 an ounce is probably out of the question for this year. He added that investors who like the long term prospects for the precious metals should be buying the dips.


“Gold has been up 10 years in a row, which is very unusual in any asset class. So if it is up this year or 11 years in a row, gold is overdue for a correction and it could have a nice substantial correction given that it has been so strong,” he told India’s largest business daily. “I have no idea what is going to happen this year. I doubt if it will go to $2000 an ounce in 2011.”


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Sorry Inflationistas, But This Chart Proves You Wrong

It’s time for our weekly dose of graphics to drive home a point or two. This go-round, I’m taking aim at the Inflationistas.

You know, those fearmongers that have been trying to tell us that the end is nigh ever since the Fed embarked on its massive money-printing campaign. That prices for all sorts of goods and services – and interest rates – are about to skyrocket. And that our only salvation is not God, but the almighty gold bullion.

Can you tell I was never afraid of their prophetic declarations? Well, that’s beside the point.

What matters is that inflation – and certainly hyperinflation – has proved to be nothing more than a bogeyman.

And the charts I’ve selected for this week should serve as a nice piece of humble pie for all those Inflationistas. The question is, will they eat it?

Show Me, Don’t Tell Me

Take a trip down memory lane with me and you’ll recall a time not long ago – back in late 2009 – when the biggest story in the market was inflation. Almost every last soul was convinced we were on a crash course with higher prices and interest rates.

Warren Buffett, Jim Rogers and Alan Greenspan were all jumping on the inflation bandwagon, too. A pundit on Fox News went as far as declaring he was “100% sure” inflation is going to hit. And not just inflation, but hyperinflation.

And why not? Never in the history of the world had the Fed pumped so much extra liquidity into the market. When that happens, inflation always follows, right?

Well, not exactly.

As this chart demonstrates, inflation has proved to be no big deal. We’re not even close to matching any of the major historical spikes.

So what happened?

As I pointed out in a special webinar in 2009, everybody was ignoring the deflationary forces at work – like the collapse in housing, the contraction in personal credit and soaring unemployment. And that these forces were more than enough to offset the Fed’s inflationary actions.

Of course, the die-hard Inflationistas in the group have a knee-jerk retort. It’s a little ditty that goes something like, “Wait for it, wait for it, wait for it.”

I’ll keep waiting. Because in order to have inflation we need a wage-price spiral, wherein wages chase prices and prices chase wages. But that’s not possible when wages aren’t rising.

And they’re certainly not.

Bottom line: Runaway inflation is going to be like Lindsay Lohan at her court-appointed community service – a no-show. So don’t let the Inflationistas scare you. They’re wrong!


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American credit rating to be downgraded again

Jim Rogers 28.07, 00:58

With five days left until the debt ceiling is reached, are Americans witnessing first hand a crisis or political showdown? According to investor and author Jim Rogers, it just doesn’t matter anymore.

China downgrades US credit rating 03.08, 18:56

China’s top credit rating agency downgraded the US debt, despite this week’s deal that many hoped would save the markets.

Image from media.azpm.org 15.07, 20:10

Standard & Poor’s said yesterday that the US credit rating has a good chance of being downgraded due to the debt discussion stalemate marring Washington, and even a deal to raise the ceiling doesn’t mean they won’t downgrade the country’s rating.

Days away from default, no solution for the US debt ceiling has been reached. 29.07, 18:57

On Tuesday, the United States government is planning on running out of the more than $14 trillion that DC lawmakers say the country can borrow from abroad.

American credit rating downgrade still likely 01.08, 20:20

Lawmakers may have hoped that the last-minute debt ceiling deal yesterday saved the US economy, but credit agencies aren’t about ready to say that the dollar is safe from danger.

The Fed loaned out trillions both internationally and domestically. 21.07, 22:03

With 12 days left until the US reaches their borrowing limit and looks towards default, economists are trying to figure out how to avoid running into the $14.3 trillion debt ceiling. Here’s one answer: stop giving away money.

US may loose AAA debt rating 14.07, 11:37

The rating agency Moody’s says it may review America’s AAA debt rating to reflect the country’s possible technical default. The scenario may eventuate if congress fails to approve raising the statutory debt limit in time.

America will lose its sovereignty 30.07, 00:54

Lawmakers in DC continue to work towards a last minute solution to the debt ceiling crisis — or at least say they are — but to RT contributor Max Keiser, the outcome is already certain.

Published: 24 October, 2011, 19:23

A picture shows the entrance of Fitch ratings agency (AFP Photo / Miguel Medina) A picture shows the entrance of Fitch ratings agency (AFP Photo / Miguel Medina)

TAGS: Crisis, Politics, USA, Banking, Economy, Finance

Only three months after Standard & Poor’s downgraded America’s credit rating, the other two top agencies — Moody’s and Fitch — could be considering a downgrade of their own in the very near future.

This news comes from a report out of one of the biggest names in the banking industry, Bank of America Merrill Lynch, issued on Friday.

"The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan" to cut the deficit, Merrill's North American economist Ethan Harris writes in a report from last week.

"Hence, we expect at least one credit downgrade in late November or early December when the super committee crashes," adds Harris.

The 12-member bipartisan super committee has until November 23 to find a solution to America’s ongoing deficit dilemma, which played a large role in triggering S&P to issue their downgrade back in August. At the time, it was the first time America’s sovereign debt had been devalued by any of the top-three. With the super committee’s deadline less than a month away now, Harris’ report considers another downgrade likely if the congressional leaders involved in finding a solution cannot come up with a plan.

Should a plan not materialize in time, $1.2 trillion in automatic spending cuts will be instated starting in 2013, which will largely pull from discretionary spending. That isn’t to say, however, that it won’t impact the faltering American economy any further. If a plan is not put together and a downgrade is in fact issued, economic woes for Americans are almost certain to worsen.

Harris’ assumption is indeed just that, but Moody’s did in fact reveal that the US credit rating is currently under review for a possible downgrade. Speaking to Reuters last week, Moody’s lead analyst Steven Hess said, “It’s not that we’re waiting just for this committee to decide on the rating,” and that a failure from the super committee “would be negative information but it is not decisive in our view about the rating.”

In the days leading up to America hitting its debt ceiling earlier this year, investor and author Jim Rogers told RT that anything Congress did at the time would only postpone further catastrophe for the country.

“They’re going to announce something either the day before, the day of or the day after and they’re going to say everything is okay.” Rogers said in August, adding, however, that “America is going to be in worse shape than it is now.”

“They are going to continue to spend and drive us deeper into debt,” said Rogers. “I don’t see any chance of turning it around.”

“Even if they default on August 2, 3, 4 — they’ll be back playing the same old games,” he said.

Standard & Poor’s eventually issued their downgrade on August 5, 2011 — less than a week after China’s Dagong Global Credit Rating did the same.

United States Marine Corps. Sgt. Shamar Thomas (Grab from YouTube video uploaded by BklynJHandy) 22.10, 04:51

OWS protesters have said since the beginning that their movement is a leaderless one. However, a video of a disgruntled US vet sharing some words with the NYPD during last week’s Times Square stand-off has made him an unintentional spokesperson.

Occupy Wall Street Republican Presidential Candidate Ron Paul speaks to a gathering of conservative Christians at the Iowa Faith & Freedom Coalition Presidential Forum on October 22, 2011 in Des Moines, Iowa (Scott Olson / Getty Images / AFP) Today: 19:44

Are you still a fringe candidate when you pull in more than half of all votes? Just ask Ron Paul.

US Election 2012

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Jim Rogers

Warren Buffett

Nouriel Roubini