An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Tuesday, August 3, 2010
Jim Rogers: The next big bubble is the bond market!
Jim Rogers is hilarious; an absolute clown!
He's been saying people should short bonds for three years now. If he's followed his own advice he clearly must be broke by now, but the worst thing about guys like him is that they're cowards. They don't risk their money; they give their crappy, ill-conceived advice to others, causing many people to lose...a lot!
Rogers has been saying that bonds are a bubble for so long. He is clueless about the monetary system and simply doesn't understand that interest rates are a parameter set by the central bank.
I have no idea why the media gives time to guys like Rogers, Schiff, Marc Faber and all these loonies.
I guess they get media time, because their predictions are bombastically dire, yet appeal to the intuition and circumstances of the uninformed.
ReplyDeleteThey seem to have a rather large and growing fan base, giving them high ratings, despite the prima facie ridiculousness of their claims.
I get the sense that their fans themselves think they know more about economics than economists, even though they don't seem to ever offer any numbers relevant to the perpectives many of them parrot.
They ignore inconvenient facts, such as the dollar going up everytime the markets get the jitters. They only look at the rises in gold prices and think gold is some kind of ultimate metric vis-avis which everything else should be valued.
They talk about inevitable hyperinflation, Zimbabwe style, despite every metric for US market expectations saying quite the contrary, Try to explain to them that hyperinflation can only be brought about by choice, and they don't get it.
They don't understand that Zimbabwe's central bank directly prints money and doesn't have the tools the Fed has, such as asset sales or increased reserve requirements to deal with inflation. Of course, many of these same people say the US is insolvent, despite the unsually low yield curves going out for many years. The US is probably further from insolvency than any other political entity on earth.
Many of them assume decoupling will occur anytime now, despite the fact that the US is still reponsible for around a quarter of world aggregate demand and it will take many years before the world can do without our demand so easily.
They see people like you and Krugman as evil socialist cranks, brainwashed by Keynesian economics, even though I somehow doubt many of them have ever read Keynes or looked at any rsearch to support Keynes' ideas. Perhaps even fewer of them have paid attention to Friedman, beyond his libertarian ideals.
So, these are ignorant people who assume their conclusions and selectivley point to irrelevant, yet misunderstood numbers(when they refer to numbers at all) and can only sing the song of the hyperinflation/US bankruptcy to come.
I still remember when Mike had Farber on his show and Farber said something like: 'All Americans do is buy big TVs on their credit cards" and Mike kicked him off! It was classic!
ReplyDeleteI dont think Mike ever had Rogers on as I think Mike alredy had enough of him by the time he started the radio show, and I dont think he had Sciff on.
Yeah Mike another thing.
ReplyDeleteIf bonds keep going to 0% I might have to agree then with Rogers that they would then be a "sell"! LOL!
I guess English is not your first language. Rodgers says "the next bubble". That means he thinks the bubble is not here yet. He has repeatedly said he is not short, but is waiting to short as the bubble developes. Perhaps you can get someone to read what he says and explain it to you since your reading comprehension leaves something to be desired. Or get someone to listen to his broadcasts and then explain it to you.
ReplyDeleteI guess English is not your first language. Rodgers says "the next bubble". That means he thinks the bubble is not here yet. He has repeatedly said he is not short, but is waiting to short as the bubble developes. Perhaps you can get someone to read what he says and explain it to you since your reading comprehension leaves something to be desired. Or get someone to listen to his broadcasts and then explain it to you.
ReplyDeleteHey, Gladys, if you're such a reading comprehension wiz, then why don't you start by getting the spelling of Rogers' name right? It's Rogers, not "Rodgers."
ReplyDeleteSecond point, Rogers HAS been short. He shorted bonds right after the Lehman collapse in 2008. I know this for a fact. He also publicly stated it. He's been short several times since then as well.
Finally, saying that it's going to be the "next" bubble, in other words, it's coming, it's coming...just wait...it's coming, well, what kind of advice is that? I can say that the Dow is going to hit 100,000, which it probably will one day, but is that useful information?
As Matt pointed out, rates are almost at zero along the entire term structure. When will the bubble be here? When the 30-year is at zero? That is an assinine comment.
Mike,
ReplyDeleteThis short video clip suggests that Rogers doesn't even know the difference between fiscal and monetary policy:
http://www.youtube.com/watch?v=3sZnSERUVNQ
Rogers is an idiot who approaches the current economic environment through the lens of the 70s -- the era he traded in during the start of his career. He has absoslutely no clue of what's in store for interest rates and bonds. Whenever people ask him why US bonds can't keep going up just like Japanese Bonds did for the last 20 years he dodges the question and changes the topic. Rogers is a fraud.
ReplyDeleteI read Michael Edesess book "The Big Investment Lie" (nice read) and he has a chapter on Soros/Rodgers Excelsior hedge fund from the 70's. The fund went eventually bankrupt but not before Soros and Rodgers pocketed enormous amounts of wealth. His point was that the wealth came mostly from management fee's and not from capital appreciation.
ReplyDeleteI suppose that Rogers would call Equatorial Guinea, Libya and Estonia as model countries because of their low debt. What a jerk.
ReplyDeleteJim Rogers is so annoying. I've got this urge (that I would never follow through on!) to either snap his bow tie or twist it really tight!
ReplyDeleteHello everyone, In order to debunk the beliefs of my friends at MMG I'm trying to understand what everyone is afraid of.
ReplyDeleteHere
http://online.wsj.com/article/SB10001424052748704407804575425384002846058.html
Jeremy Siegal writes
"Inflation-adjusted bonds for the next four years have a negative real yield."
So what?
Bond traders will sell to take profits and buy back when yields begin to rise again. Purchasing power is only reduced if they continue to hold bonds purchased today rather than selling. Or, what am I missing?
Thank you!
Still pondering the bond-bubble notion.. Where does it come from?
ReplyDeleteIt seems to me that this is fueled by a fear that the longer interest rates remain low the more risk there is that rates will reverse sharply.
But the Fed sets interest rates. Mainstream says "history has shown that rates can move up sharply".
The last time that happened was the period late 1979 to mid 1981 and it was no accident - it was the Fed's response to runaway inflation.
Forget about "teaching" the infants of America to read. Mastering 'What Part Of This Picture Is Not Like The Other' is as valuable a skill as any other.
Back again to think out loud some more. Friends and family are begging me to shut up.. in a nice way because they love me but, you know...
ReplyDeleteIf it bubbles, it didn't come from the gov't.
Has gov't spending ever bubbled?
If it's on the Fed's balance sheet it won't ever bubble...
I don't know if these statements are even remotely true. Just supposing, considering, looking for a fit.