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Jim Rodgers: Worst crash in our lifetime coming within the year

Displaced Bama Fan

Displaced Bama Fan

Hall of Fame
Jun 5, 2000
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Shiner, TX
Well, that's absolutely inspiring. I do love me some good doom.

http://www.msn.com/en-us/money/mark...-our-lifetime-is-coming/ar-BBCl6BS?li=BBnbfcL

I thought it was interesting that he mentioned Iceland in 2007. I wonder if Puerto Rico going bankrupt is the new start?

Blodget: And we are in a situation where Western civilization already seems to be possibly collapsing, even with the market going up all the time. Often when you do have a financial calamity, you get huge turmoil in the political system. What happens politically if that happens?

Rogers: Well, that’s why I moved to Asia. My children speak Mandarin because of what’s coming. You’re going to see governments fail. You’re going to see countries fail, this time around. Iceland failed last time. Other countries fail. You’re going to see more of that. You’re going to see parties disappear. You’re going to see institutions that hav e been around for a long time -- Lehman Brothers had been around over 150 years. Gone. Not even a memory for most people. You’re going to see a lot more of that next around, whether it’s museums or hospitals or universities or financial firms.
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I have seen that there is definitely something wrong in retail, manufacturing, tourism and some other sectors. There are several bubbles looming that I've read/heard about as well. Haven't seen it talked about as much with all the talk about politics or people crowing about the Dow going up some.

At least in my personal experience we're still just finally scraping out of the last crash and seeing the light at the end of the tunnel so disposable income is basically nil. Have a feeling a lot of people are in similar boats.
 
If we would quit stifling the economy with unnecessary regulations. Holds evil profits down and smaller Econ investments....which leads to more people borrowing money they can't pay back, etc.

The school loan bubble is going to be a big factor in this too.
 
Matt & Cajun both of you guys have good points. I can see student loans being the next "housing bubble" and the rapid retail closings putting people out of work in our "service" economy is going to be significant as well.
 
Displaced Bama Fan said:
Matt & Cajun both of you guys have good points. I can see student loans being the next "housing bubble" and the rapid retail closings putting people out of work in our "service" economy is going to be significant as well.
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There is also an auto loan bubble that has developed in a similar way to the housing bubble. Putting people into cars that they can't afford over and over.
 
Displaced Bama Fan said:
We've apparently learned very little in 10 years.
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When the bank CEOs can play fast with loans and make huge profits, everyone is happy and the CEO makes tons of money. When the inevitable bubble explodes, the CEO resigns, having made millions, and walks away...

No one is forcing people to buy these expensive cars or take out school loans, but unless / until there's less incentive to loan money to anyone who can fog a mirror, this will repeat.
 
crimsonaudio said:
When the bank CEOs can play fast with loans and make huge profits, everyone is happy and the CEO makes tons of money. When the inevitable bubble explodes, the CEO resigns, having made millions, and walks away...

No one is forcing people to buy these expensive cars or take out school loans, but unless / until there's less incentive to loan money to anyone who can fog a mirror, this will repeat.
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Typically said CEO has a golden parachute as well when he/she resigns or is fired. The money managers make their money as well so what do they care. They aren't incentivized for sustained profitability, they only care about the here and now.
 
crimsonaudio said:
When the bank CEOs can play fast with loans and make huge profits, everyone is happy and the CEO makes tons of money. When the inevitable bubble explodes, the CEO resigns, having made millions, and walks away...

No one is forcing people to buy these expensive cars or take out school loans, but unless / until there's less incentive to loan money to anyone who can fog a mirror, this will repeat.
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Our politics and our government institutions also drive these bubbles.
 
We've gotten to the point where the markets doing well doesn't really affect the average person all that much in their day to day but unfortunately haven't found the same protection for when it crashes. Haha.

The Western world is in decline and has been for a long time regardless of what the markets tell you. The political shifts over the last few years have been an undercurrent to Western politics for decades but it has finally gotten bad enough that insular nationalism has become a significant demographic to leverage. The question is whether we're in early stages of Western civ's death throes or just a really tough adjustment period to our new placement in the world. I've been worried more about wasteful spending on defense than social welfare because our military position appears to be the principal way for US policy interest to be projected upon the world as our population's buying power decreases. The scary thought is what does a peeved and lesser regarded America do since we have the most nukes in the world. Especially scary if an actual right-wing fascist gets the presidency.

Anyway, not really trying to get political but it is inextricably tied to these things I guess. I agree with Rogers, we are on the precipice of another crash and it could very well be worse than the last one. At this juncture I welcome it because we never really solved the core problems of massive deregulation in the financial sector the last time. Why? Because we're a late-stage superpower increasingly dependent on financialization instead of creation of goods to create wealth. Our politicians are scared of the aftershocks of the necessary regulations to make our market economy more resilient to boom-bust cycles because it will basically put a cap on the height of it all because you will take away the large cash empires that can rub two dollars together to create a third billions of times over.
 
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The markets have been inflated for years, most seem to admit that. Predicting the timing , duration, and depth of the correction, though, is another matter. Rodgers is a permabear. Take him with a grain of salt.
 
bamachile said:
The markets have been inflated for years, most seem to admit that. Predicting the timing , duration, and depth of the correction, though, is another matter. Rodgers is a permabear. Take him with a grain of salt.
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Nevertheless, I've read several similar analyses recently, some by men far less pessimistic than he (who haven't moved family overseas). My wife and I have decided to take the last 10% of our assets or so we have in equities out...
 
Just look at a chart of the Fed funds rate over time, then look at a chart of margin debt over time...the equity market is WAY overpriced, risk is WAY underpriced, auto loans, school loans, disposable income, etc. A lot of factors scare the hell out me right now. I really hope I'm wrong and Rodgers is wrong.
 
TIDE-HSV said:
Nevertheless, I've read several similar analyses recently, some by men far less pessimistic than he (who haven't moved family overseas). My wife and I have decided to take the last 10% of our assets or so we have in equities out...
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I've been out for a little while, at least for the most part. I don't disagree with the premise of a correction, even a substantial one. I just don't trust Rodgers.
 
TIDE-HSV said:
Nevertheless, I've read several similar analyses recently, some by men far less pessimistic than he (who haven't moved family overseas). My wife and I have decided to take the last 10% of our assets or so we have in equities out...
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I've read quite a few of those as well. I can't draw a bead on it though because there has been a cottage industry of pessimists ever since the 08' crisis. Everybody wants to have the ability to say, "Called it!" when the next crisis strikes. It's become similar to contradictory climate studies. Both make salient points and I'm not enough of an expert to understand how the minutiae affects the validity of those points and/or nullifies them.

I think the phrase "Western civilization is in decline." is a tad hyperbolic. I think we are in the ebb of dominance but more due to the emergence of other competitive markets and the constant rise of the poverty line across the globe.


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