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Mr. Jim Rogers is with us today. Jim co-founded Quantum Fund in 1973 and has been investing ever since. He is also a businessman and the author of several books, some of which we will discuss in this interview today. Jim is a traveler who has traveled the world more than once and now lives in Singapore with his family.
We are honored to have Jim come to share his views on the global economy, particularly the precious metals market . So, congratulations, Jim. Well, Luke, I'm glad to be here, and I must say, this is quite interesting. I didn't know about this repository. I didn't know about your coin selection. I am going to become your client.
I thought I was just coming for an interview. Now I'm going to spend my money. We're very happy to welcome you here, Jim. As an avid traveler, in your past travels you have had the unique opportunity to see everything with your own eyes. You gained a deep understanding of different cultures and different economies.
So, in the current investment landscape, what attracts you? I am " attracted" by the fact that the world is facing a serious problem in the next couple of years. And a lot of people will lose a lot of money. I hope I wo n't be among them. I hope I survive. Listen, this will be the worst at my age. The worst thing in most people's lives.
This won't be fun. So you should be aware. You should be worried. When you are aware, you will start to worry, and then you will be ready. What training tools would you recommend , say, to a private investor? First of all, no one should invest in anything unless they know a lot about it themselves. Don't listen to me.
Maybe listen to yourself, not the internet, television, or anything else, because if you invest in something you know little about, even in good times you won't succeed. And when bad times come, you will definitely lose. So stick with what you know. And if you don't know anything, put your money in the bank.
It's better to earn a little interest than to lose a lot of money. So stick with what you know. Or become a farmer. Farmers will feel good . Few things will be successful in the coming difficult times. Move to Russia, to China, to North Korea. There are several places that will be successful in Africa.
Some African countries will feel good . There are different ways to protect yourself in the future. You previously talked about investing in China when the Chinese government had a better budget balance. But since then everything has changed. So do you hold the same opinion? Well, China is going to be the next big country in the world, whether we like it or not.
Many people don't like it. But let me remind you, Luke, that America was the most successful country in the 20th century. But on the way to this, we had 15 depressions. A terrible civil war, minimal human rights, little rule of law. Massacres took place in the streets . America was often in complete disarray.
And yet we became extremely successful. China will have problems. There will be people who go bankrupt, especially those who have dealings with the West or , as you mentioned, have debts. No, there will be problems. But every person, family, company, or country that rises has difficulties along the way.
The Chinese have a wonderful word that doesn't exist in English. It's "wei," and "wei" means that disaster and opportunity are the same thing. So when you see problems in China, well, when I see problems in China, I hope I have the sense to buy and not panic. Say, I heard some of your previous interviews where you commented that the Fed was the main cause of the problems we are seeing in the United States economy.
What would you say is the one thing they need to fix to increase their chances of long-term success in the United States? Abolish the Fed. You know , in American history there have been three central banks. The first two disappeared for various reasons. A world without a central bank has problems. The world with this central bank is a problem.
They have cut interest rates to zero, which is destroying a lot of people. They increased their own balance by 600%. Yes. In nine years. They did it in nine years , which is simply unthinkable. No, they cause a lot of problems. Zero interest rates are destroying many pension plans, insurance companies, trust funds, and more.
No, this central bank is a huge problem. It would be great if we could cancel this. This is not a hundred, this could happen if the situation gets too bad. As I said, the first two disappeared in America because there were so many problems there. This one might disappear too. Well, they're not going to cancel themselves .
Maybe someone else will cancel them. Otherwise, they should just step aside, leave the world alone, and go to the beach. Spend time at a bar drinking beer, or go to the beach, do whatever you want, but stop bothering us. Now the Fed has recently said it is looking to reduce its bond position and its balance sheet.
Do you think this is likely? No, they're going to, they're saying it and they're actually going to try it. They will do it. But when things get bad, people will call them and say, “You have to save us. You must save us. This is the end of the world. They're bureaucrats, they're, uh, scientists, they don't know what they're doing.
They will panic and try to save the world again, causing a great upheaval, but that will be the end. So, let's now turn our attention to gold. How do you see gold in the future of the economy, say, in the event of a potential disaster in the financial markets? Well, I own some gold, Luke , and have for many, many years.
Just to show you what I own, I'm not, I'm not just talking. Eh, I haven't bought any serious gold since 2010, but I own it and I don't sell it. Eh, my plan is that when gold drops below a thousand US dollars an ounce, I hope I'll be smart enough to buy a lot. Maybe this won't happen. Maybe it won't happen, but I have it.
If it goes up from here, you know, I have enough gold. I'm not worried. Well, before this is all over, gold will turn into its own bubble, because whenever there are big problems and people lose faith in governments and paper money, they always buy gold and silver. It doesn't matter whether they have to do it or not.
This is what they do . Good. So, they will do it again. And so I hope I'm smart enough to prepare for this huge bubble that's coming. Two or three years ago, you mentioned that you predicted that the price of gold in US dollars would fall. Well, you were right in that prediction. Have you sold some of your gold reserves to buy them back at a lower price?
No, firstly, I'm too lazy, and secondly, I'm not smart enough to guess the market time. I just own gold. If a bubble pops up, I'll have to sell it. The bubble always needs to be sold, but maybe it won't be there and I'll just give it to my children someday. There's nothing wrong with that , everyone should have some gold and silver.
I will provide my children with their own gold and silver if it comes to that. So, what advice would you give to a new investor looking to add precious metals to their investment portfolio? Well, first of all , learn something about it. And secondly, everyone should have some gold and silver as an insurance policy, at least.
Everyone watching this probably has fire insurance or car insurance. You hope you never have to use it. Yes, that's true. You hope you won't need car insurance, but if you do, you have it . You should have gold and silver as an insurance policy, at least. And if you are knowledgeable enough and do everything right, you can also make good money buying gold and silver.
So you should have it as an insurance policy, and then learn more, and if you start to understand what you're doing, you can also make good money. You yourself have been a supporter of precious metals for many years. What do you think is your strongest personal belief about owning precious metals? Everyone should have some of them .
This is, as I said, an insurance policy, if nothing else. You hope you never need it . But it's the best insurance policy in the world. Well, except for maybe rice or something like that. You have to own it, be prepared, and you can make good money too. Most other things you buy, like stocks, are not an insurance policy.
Gold can be both a way of earning money and an insurance policy. Over the past five years, we have observed a trend of gold flowing from West to East. Here at Bullion Star in Southeast Asia, we have seen quite a strong demand over the past five years compared to sluggish demand in the West. What do you think are the consequences of this?
Money in the East. America is the largest debtor country in the history of the world. Portugal, Spain, Britain, all these countries are now huge debtors. The money is here . That's why the money, the demand, comes from here, and it will continue to do so . Western countries will buy more when the crisis hits, but the money is here.
I mean, the largest creditor countries in the world are China, Japan, Korea, Taiwan, Singapore. This is all Hong Kong. They are all here. The largest debtor countries in the world. You can look out the window, and if you look far enough to the west, you will see them. At the event, we conducted some initial research that showed that approximately 6,000 tons of gold is traded daily in London on the over-the-counter markets .
This is almost double the annual production. And on COMX, only one in 2,500 contracts actually reaches delivery. So, is it worth paying attention to? I don't pay attention to it. But I mean, the same could be said about cotton, coffee, or many other things. This is how markets have evolved over the past few decades.
I mean, it's quite likely, and I know gold advocates like to say that there's a shortage of gold in the vaults . Well, it is indeed lacking, but there was never enough gold in the vaults. So I don't pay too much attention to it. Do you foresee any changes in how gold will trade in the future or how it will be valued ?
Well, of course, this will increasingly happen via the internet. Everything we know and do is now done via the Internet. So, in this regard, everything will change. Exchanges are already changing. I mean, there's no trading floor on the New York Stock Exchange anymore . There is a hall, but they play tennis or something.
I mean, when I first got there, there were a lot of these guys there. Now most of the work is done on the computers upstairs. And that will continue to change for commodities, stocks, bonds, everything . You won't see many platforms anymore, there are almost none left. In the future, you won't see them at all.
Do you foresee a gap between the paper price of gold and the physical price during a crisis? In a real crisis, there will be no paper market . You know, the paper markets will close. There will be chaos everywhere. So, you need to have gold in your pocket, in your closet, in your safe, or somewhere else, because in a real nightmare, chaos, or catastrophe, paper markets will not exist.
Of course, such a catastrophe may not happen. I'm just saying that if it happens—and it probably will happen sometime in your lifetime—there will be no paper markets. Jim, you've been here in Singapore for what seems like almost nine years. Um, ten years. Oho. We have been doing business here in Singapore for five years and firmly believe that Singapore is one of the best jurisdictions for owning and storing gold.
Do you share this opinion? Well , I live here. I am not obligated to live here . I was not given any incentives to move here. I came here of my own free will. I have gold and silver here. I keep some here. I don't know if this is the best place . Ask me in 30 years, but I'm here, and it's tax-free. Yes.
Buy here. And you know, not all jurisdictions are tax-free when it comes to buying gold and silver , but as far as I know, it's certainly as good a place as any. I guess I'll take my words back. As far as I know, better than most others. Finally, Jim, if you had to give one piece of investment advice to your younger self, what would it be?
Why didn't I move to China? Why didn't I stay in China when I first got there in the 80s? So if I were any age now, actually, when I was at university, I went to Oxford. Looking back, I have to say that Oxford was a lot of fun. This is a wonderful place. Wonderful, wonderful, wonderful. Well, I should have gone to China instead of Oxford.
And I still , if I could change everything, would go to China. And whoever today, I'm here. I am here through China. My children are here through China. On that note, thank you very much, Jim, for taking the time to chat with us. Thank you. With pleasure. Yes.
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