Thursday, October 20, 2011

Jim Rogers warns of bond bubble stagflation and emerging markets

Last Updated : 17 October 2011 at 12:05 IST

NEW YORK (Commodity Online): Jim Rogers believes that the US will experience stagflation so much worse than the 1970's that he is betting on commodities and currencies while shorting stocks and emerging markets.

This should come as no surprise for those whoo follow Rogers, since he has been a long time commodity bull.

"As the inflation numbers get worse and as governments print more money and as governments have to issue many, many more bonds - somewhere along the line we get to the point when (bond prices) go down. Bernanke is obviously backing the market again and the Federal Reserve has more money than most of us - so they can drive interest rates down again. As I say they are making the bubble worse”, Jim Rogers said in a CNBC interview adding that he wouldn't advise anybody to buy bonds.

Rogers is long on commodities and currencies to prepare for stagflation while he is shorting stocks and emerging markets.

So why emerging markets when everybody seems to be looking for growth in them?

“The time to buy emerging markets is when everyone else is dumping them, not when there are 20,000 M.B.A.s running around touting them”, he said in a WSJ interview.

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