There will soon be a blow-up in US and, possibly, Japanese markets: Jim Rogers
What is apparently happening to the world? Everybody is simply trying to use the word liquidity. When I ask experts why markets are going up when the world is looking bad, the simple answer is it is liquidity, it is Fed, it is money.
The prior to the question going on in the world is that central banks across the globe are printing gigantic amounts of money and governments are borrowing and spending huge sums of money the same. The Bank of Japan, moreover everyday, goes in there and starts printing money as fast as it can and buys stocks, ETFs, and also, bonds. About the same topic, it is happening all over the world. In the US, they are not buying stocks. We do not think they are yet, but they are buying everything else. This is mad. But it is, eventually as well, great for investors, it is great for stockbrokers, it is great for ETNow. Although, is it good for the world? No.
So, if global central bankers are likely to print more money and if interest rates are likely to remain low, then what could be the end game for equities and for this so-called summer madness which we have seen in just about every asset class?
In the very first place, you must remember that in America, there is an election that is to be held in November. And in Washington, they are doing everything they can to get re-elected further. That is what they come up with. They do not care about us. They do not care about our children. They care about getting elected. So until November, anyway, this is all going to keep a constant pace in the US. But other places will probably follow as well. The end game? Often in history, after a long ascension in the market, it turns into “a blow of a bubble”, especially when there is a colossal sum of money that abruptly comes in. I am not very good at timing the market, but I suspect we may have a blow-up at least in the American stock market, and maybe the Japanese stock market, because of all this insanity currently going on.
So to your mind what is the importance of this year’s presidential election?
It is highly important, because the person in charge–it always happens not just in the American premises, but also all over the world – wants hugely to get re-elected. So, the individual in office and his party will do everything they can to get re-elected. And in the American history anyway, it is very difficult to replace a President who is in power, because he occupies the ability: if he needs money over here, he spends a lot of it over here. The Opposition cannot do that, and usually presidents get re-elected. Mr Trump most definitely wants to get re-elected, and he certainly will spend as much money as he can and wherever he has to to get re-elected again for the nation’s sake.
God forbid, but if there is a second wave of coronavirus, how do you think markets are likely to react to that?
Most governments, apparently, will not close down a second time around. At least they will not be as draconian as they have been the first time around, and it is widely due to the fact that they have realised the cure can be worse than the disease. In some nations although, the cure has been worse than the disease. So, you will not see that again. You might watch areas close down, but the basic economic damage has been done, that will be more if there are more close-downs, but countries now realise they have to eat and they have to survive and closing everything down will not eventually work itself out.
Writer – Soumili Roy.