Rogers Holdings Chairman Jim Rogers is certain that the U.S.
economy will be in recession in the next 12 months.
During an interview on BloombergTV, the famous investor said that
there was a 100 percent probability that the U.S. economy would be
in a downturn within one year.
"It's been seven years, eight years since we had the last
recession in the U.S. and normally, historically we have them every
four to seven years for whatever reason—at least we always have," he
said. "It doesn't have to happen in four to seven years but look at
the debt, the debt is staggering."
Most Wall Street economists see a much smaller chance of a U.S.
recession within this span, with odds typically below 33 percent.
Rogers was not specific on what could trigger a disorderly
deleveraging process and recession, but claimed that sluggish or
slowing economies in China, Japan, and the eurozone mean that there
are many possible channels of contagion.
The former partner of George Soros suggested that if investors
focus on the right data, there are signs that the U.S. economy is
already faltering.
"If you look at the…payroll tax figures [in the U.S.], you
see they're already flat," he concluded. "Don't pay attention to
the government numbers, pay attention to the real numbers."
In light of the economic turmoil envisaged by Rogers, he is
long the U.S. dollar.
"It might even turn into a bubble," he said of the greenback.
"I mean, if markets around the world are crashing, let's just
say that scenario happens, everybody's going to put their money
in the U.S. dollar—it could turn into a bubble."
Rogers added that a strengthening U.S. dollar has
historically been negative for commodities—the asset class that
the investor is most well-known for.
While the yen is often designated as a risk-off currency, it
won't benefit in the event of a flight to safety due to the
massive, continued expansion of the Bank of Japan's balance
sheet, according to Rogers, who said he exited his position in
the yen last Friday.
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