Video: Crisis in The Emerging Markets; Be Aware, and Be Prepared

 

UBS’ George Magnus believes the next global economic “crisis”‘ lightning rod will be the emerging markets and as Jim Rogers tells BoomBust’s Erin Ade in this brief interview, “the emerging market crisis has only just begun.” While Rogers is careful to add that there are lots of emerging markets – “some better than others;” he warns that “there are some serious problems out there and they are going to get worse.” Who is to blame? The Fed, of course – “by driving rates so low and providing as much liquidity as anyone in the world could want, the EMs have borrowed to cover up their real problems… be worried.” For Turkey, Indonesia, India, Brazil – this is not over yet – “they have serious problems and are not being resolved.” The major problem is the Federal Reserve: with interest rates at such low levels, people can borrow lots of money – and America is printing a lot of money so there’s plenty to go around A lot of countries have borrowed money at cheap rates which covers up their problems… they haven’t addressed their real problems; and so now, we have a huge problem facing us and it’s going to get worse. This is not over yet – you should be worried, be careful, and be prepared

Corruption costs the EU roughly $120 billion a year, around 1 percent of economic output. Where is the corruption and where is it squeaky clean? Erin Ade reports. Famed investor and author Jim Rogers is a bull on China and Asia. But right now the emerging markets are a big concern. Jim also gives his view on the US, European, Japanese and Chinese economies — and the Gold Standard. In the Big Deal, Erin and Edward Harrison discuss money. What exactly does the pyramid on the back of a dollar bill symbolize? And where does a pound or a dollar really derive its value?
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Jim Rogers is holding on to his gold position in anticipation of an inevitable market bubble and substantial gains. Safe as money in the bank? Not so says the self-made billionaire; the threat of pension fund and savings confiscation is just one more reason to add precious metals investments to a diversified portfolio.

Rick Rule, head of Sprott US Holdings says bear markets create bull markets, so it’s time for investors to put on their contrarian hats and buy precious metals. Capital scarcity for new resource companies is another contrarian sign indicating that gold and silver miners represent a solid investment for every portfolio.

n May 2012 he remarked during an interview with Forbes Magazine that “there’s going to be a huge shift in American society, American culture, in the places where one is going to get rich. The stock brokers are going to be driving taxis. The smart ones will learn to drive tractors so they can work for the smart farmers. The farmers are going to be driving Lamborghinis. I’m telling you. You should start Forbes Farming.

Concerns about a Chinese hard-landing set off by Beijing’s efforts to deflate the credit bubble are making headlines again.

GDP growth slowed to 7.7% in 2013, the lowest level in 14 years. And the slowdown has played a part in the emerging markets rout we have seen recently. But recent trade and lending data, and Lunar New Year sales have come in better than expected.

We reached out to Jim Rogers, chairman of Rogers Holdings , to get his thoughts on the slowdown and on what everyone is getting wrong about China.

Rogers told us that we shouldn’t be very concerned about the slowdown in the Chinese economy. However, he does worry about China’s debt at the local levels.

He also took issue with the naysayers calling for a major crash.

Business Insider: What worries you the most about China right now?

Jim Rogers: The high levels of debt in some areas. Some of the provinces and companies have built up debt in recent years during the recovery, since there has been so very much artificial liquidity all over the world.

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