Tags: Rogers | US | Stagflation | economy

Jim Rogers: US Must Brace for Nasty Stagflation

Friday, 14 Oct 2011 08:09 AM

Stagflation is getting ready to strike the U.S. economy, and it will be worse than it was in the 1970s, says international investor and commodities champion Jim Rogers.

Rogers' call for stagflation, a period in which consumer prices rise while the economy contracts, differs from others who see the U.S headed for what's known as a balance sheet recession, where the economy tanks but prices don't soar and is largely a time when businesses and individuals pay off debts.

Loose monetary policies designed to kick-start growth and hiring are having more inflationary impacts that governments will admit, which will hurt bond prices, Rogers says.
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"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," Rogers tells CNBC.

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Jim Rogers
(Getty Images photo)
"I wouldn't advise anybody to buy bonds, I would advise you to sell bonds," Rogers says.

"If I were a bond portfolio manager, I would get another job."

"In the 70s you didn't make much money in stocks, you made fortunes owning commodities," Rogers adds.

The Federal Reserve, meanwhile, says it may roll out more accommodative monetary policies if it feels inflation rates will fall, normally a sign that growth is ebbing and the opposite of what Rogers predicts.

"It is something that we're going to be watching very carefully," Fed Chairman Ben Bernanke said recently, according to Reuters.

"If inflation falls too low or inflation expectations fall too low, that would be something we have to respond to because we do not want deflation."

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Stagflation is getting ready to strike the U.S. economy, and it will be worse than it was in the 1970s, says international investor and commodities champion Jim Rogers. Rogers' call for stagflation, a period in which consumer prices rise while the economy contracts,...
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2011-09-14
Friday, 14 Oct 2011 08:09 AM
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