Jim Rogers, the renowned co-founder of Quantum Fund believes that there’s an impending crisis, and it’s much sooner than you think. “We could see the worst crash in my entire life pretty soon,” said Jim Rogers in a recent conversation with Kitco news. Jim Rogers founded the Quantum Fund alongside George Soros, who is regarded as one of the most successful investors of all time. From 1970 to 1980, their portfolio returned 4200% while the S&P had posted paltry returns of about 47%.
Jim Rogers said, “We’ve had economic problems in the US, in North America, every four years since the beginning of the republic, to say that we’re going to have a problem is not unusual.” Going a step further, the veteran said that it would be ‘bizarre’ if we didn’t have a problem. Rogers observed that the 2008 financial crisis was caused due to a rise in debt, and since then the debt has gone through the roof. In fact, Alberto Gallo of Algebris Investments, in a recent blog, noted that global debt levels have almost quadrupled, rising 276% in the last decade to $217 trillion. Talking about the timeline, Jim Rogers predicts that the impending crisis could be as early as next year.
Jim Rogers, sometimes referred to as ‘Commodities Guru’, believes that gold prices are likely to skyrocket, in view of the impending meltdown. He observed that people have always turned to gold in the face of crisis and this time around it’s not going to be any different. In the same conversation he said, “Gold is going to be explosive in the next few years.” His belief in gold as a safe haven investment is shared by another renowned investor Marc Faber, who’s buying gold, to protect himself from the overheated equity markets in the United States.
Earlier last week, Marc Faber pointed out to huge disparity between the returns in gold and gold ETF index. In a recent interview with CNBC last month, Marc Faber said that while the S&P index is up 23% since January 2016, gold has returned 20% in the same period. In the same interview he pointed out that the GDX, the Gold ETF index, is up by 80% since January 2016, indicating that the markets are very distorted and investors are in a very artificial environment. The author of Gloom, Boom & Doom report had said that he has allocated only a quarter of his portfolio to equities, and that too, mainly in Asia. The remaining three-fourths of Marc Faber’s money is mainly divided between real estate, precious metal and gold shares.