Tags: Jim Rogers | central bank | stimulus | Federal Reserve

Jim Rogers: 'We're All Going to Pay Terrible Price' for Central Bank Stimulus

By    |   Saturday, 25 October 2014 11:41 AM

Central banks around the world have been easing big-time over the past five years, and the results won't be pretty, says star investor Jim Rogers.

"The central banks have been printing staggering amounts of artificial liquidity," he told Reuters TV. "It's going to come to an end. I don’t know if it's coming to an end now. When it does end, we're all going to pay a terrible price."

Financial markets will then drop 10 percent to 20 percent, Rogers said. Federal Reserve Chair Janet Yellen, "who's just an academic and bureaucrat and doesn't know much, will panic," he said.

"So central banks will start up again printing money. Markets will have a big rally. That will probably be the last time around and might end in a bubble."

As for the dollar, which reached a six-year high against the yen and a two-year peak against the euro three weeks ago, "I have no confidence in its long-term strength," Rogers said.

"I only own it because I expect all this turmoil to happen. In times of turmoil people flock to the safe haven of the dollar. It's [actually] not a safe haven, but they think it is. I expect the dollar to get stronger over the next year or two.

To be sure, some investors question the greenback's short-term strength.

"Any weakness in the U.S. [economic] data would affect the crowded dollar trade," James Kwok, head of currencies at Amundi Asset Management, told The Wall Street Journal.

"The recent rise of volatility and volume in the [foreign exchange] market will increase the need for investors to consider hedging their currency risks."

When it comes to gold, Rogers says he owns it, but hasn't recently bought or sold. "If it goes under $1,000, I hope I'm smart enough to buy more."

December gold futures closed at $1231.80 an ounce on the Comex Friday.

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Central banks around the world have been easing big-time over the past five years, and the results won't be pretty, says star investor Jim Rogers.
Jim Rogers, central bank, stimulus, Federal Reserve
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2014-41-25
Saturday, 25 October 2014 11:41 AM
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