Jim Rogers is not only one of the most successful investors of our era, he’s also an avid scholar of history.
Seeing that the world is buried under an unprecedented mountain of debt that is requiring more and more central planner intervention to keep from imploding on itself, Jim says history is clear on what happens next.
A clearing of the debt either via massive default, or destruction of the currency it’s denominated in.
He looks into the future and sees a terrible reckoning ahead; one he predicts will be “the worst economic crisis of my lifetime” — and Jim is 78 years old.
So where should investors look to preserve the purchasing power of their wealth against what’s coming?
Jim highly recommends precious metals and other commodities as an important part of the solution.
As an overall index, commodities are the cheapest they’ve ever been vs the general stock market in over half a century:
Like many of the previous guest experts on our program, Jim maintains the near-term environment will be one of the most challenging times to invest in our lives.
“I caution all of you, it’s been 11 years since we’ve had a serious bear market… and I would suggest to you that maybe next time when we have a serious bear market it’s going to be the worst in my lifetime,” Rogers told an international forum hosted by Russia.
Additionally, as RT reports, while the coronavirus outbreak triggered the deepest crisis in decades, “overreacting” politicians have only exacerbated the situation, Rogers said.
“This is probably the worst [crisis] that I have seen in my lifetime, because everything collapsed and you had politicians and media and everybody overreacting in my view, and everybody closed down,” he told the 12th annual ‘Russia Calling’ Investment Forum in Moscow, when asked if he sees any parallels with previous financial crises.
“We’ve had many epidemics in history, but never before did they close McDonalds, never before did they close all the airlines,” Rogers noted, adding that this overreaction has ruined many economies and the lives of many people.
More economic collapse news on Zero Edge, Strange Sounds and Steve Quayle.
Economy has an underlying aspect associated with the type of currency or monetary instrument in use.
This aspect of a currency called velocity is what enables or impedes an associated economy. In far historical times monetary instruments held an intrinsic value either of metals or by redemption of the instrument for a value set at the time of creation.
Properties like inflation of a currency happen when the base currency is created and valued on a confined value in redemption.(Such as a silver certificate or US treasury note)
Since 1974 the USA has operated on a currency that only has value in it’s use in trade that moniker of trade has no redeemable value only negotiable value.
US currency in the bank has the effect of slowing growth through a artificial demand for a restricted commodity.
When currency is widely available the demand for that currency will grow as the underlying wealth created in trade grows.
For many years the USA has had a negative velocity meaning that the available economic growth is curtailed by a shortage of negotiable monikers to enable the trade.
This type of economy requires that something existing be liquidated below it’s intrinsic value in order to pay a historical debt.
Most mavens of investment and of large finance have followed systems that extract this existing wealth and concentrate it under fewer and fewer individuals.
As the availability of currency increases as it has this year 2020 this negative velocity slows to a zero velocity state and then accelerates into positive velocity.
The demand for goods and services has not changed and the available resources to produce that demand has actually increased.
With more available currency in circulation the velocity will increase in positive direction typically to equal about 3% of total trade.
Recently the USA increased the currency in circulation from 748B global to 2,7T.
A corresponding immediate growth of 40% was expected with a slow down of negative velocity to 0 and then on wards as new wealth is created making use of the capitol to enable trade.
Th existing mavens who leveraged artificial demand to liquidate existing wealth will find it difficult to continue to do so. (this is what is happening now to the smart guys on wall street)
For anyone creating new wealth out of resources this is a wealth accumulation period.
Even though adversaries are attempting to shut this down it is impossible because it does not depend on them. The individuals desire to create has been stifled for many years just as they are awakening to the crime they are also discovering new unseen niches to contribute.
This change in velocity is not a depression collapse it is the ending of extraction and the birth of tremendous wealth creation.
As wealth increases in a system velocity increases to meat the demand as positive velocity increase the total wealth is amplified. Based on performance of the US dollar in trade that rate of amplification has been 3/97. SO an increase in circulation of 360% like we just experienced will result in a new M3 CAP of @30 Quadrillion with a moderator of .03 yielding a growth potential to 896T USD.
So US GDP should reach at least 2% by accident or @101T in M3 just this year. Or you can express that as 21.6% increase year over year.
As investors begin to understand that extraction will fail more often than succeed in an expanding wealth economy more main street investment will take place further amplifying total M3 economic growth.
In example pharma extracted 17.9% of GDP in 2017
With manufacturing returning to the USA at a rate of return reduced by DJT to 20% of current.
That new domestic industry will produce an additional 3.6% GDP just returning the factories to the USA even with 80% lower drug prices.
Every exported industry and manufacturing that is returned to the USA will increase GDP a similar way.
Investment into wealth creation is changing from accumulation of assets to creation of new assets.
MAGA