Monday Nov 25, 2024
Monday Nov 25, 2024
Friday, 30 August 2013 00:00 - - {{hitsCtrl.values.hits}}
Q: Jim, geopolitical concerns are rising with talk of potential military action in Syria. How are these events weighing on your views towards investment?
A: Well, I own oil, I own gold, I own things like that and if there is going to be a war – and it sounds like America’s desperate to have a war – they’re going to go much, much higher. Stocks are going to go down. Some of the markets that I’m short are already going down. Commodities are going to go up. I mean yeah, some of the things I own, I’ll make a lot of money. I’m not particularly keen on war, I assure you, but it sounds like they want it.
Q: Is your main concern about supply chain disruptions for oil? Is that where we’ll see the biggest moves?
A: That’s where we’ll see huge moves but the problem with war is – and I’m not the first to know this – no matter how well the plans are made, strange things happen in war. And who knows what unintended consequences will come? But I do know that throughout history, whenever you’ve had war, things like food prices have gone up, energy prices have gone up a lot, copper prices, lead prices. You know, all of these things go up a lot whenever there’s been a war in the past.
Q: Moving farther to the Far East, we’re seeing something of a mini crisis around Asia. The Fed’s stimulus unwinding is really affecting confidence in India and Indonesia in particular. Do you think this is a short-term blip or do you think these countries face very rough waters ahead?
A: Of course they face rough waters ahead. You know India and Indonesia – Turkey too which is part of Asia – all them have huge balance of trade deficits which they’ve been able to finance with all this artificial free money that’s been floating around. Now the artificial sea of liquidity’s going to end someday and when it ends, all the people depending on this free money and this sea of liquidity are going to suffer, whether it’s this week, or this year, or next year, they’re all going to suffer.
Q: We’re already though, Jim, seeing sort of the unwinding of what happens when there’s fears of that stimulus coming out. What’s next for these countries? Where does it go from here?
A: We haven’t seen much of anything yet. Normally in bear markets, things go down 40-80% and people give up. They throw the shares out the window and they say ‘I never want to invest again as long as I live.’ Sure, we’ve seen some declines. Have we seen panic? Have we seen terror? Absolutely not. Not in any markets yet.
"This is the first time in the recorded history that all major central banks have been flooding the money with artificial money printing at the same time when they’ve all been trying to debase their currencies at the same time. This has never happened in recorded history. When this ends, this is going to be a huge mess"
Q: Are you expecting panic? We’ve seen mini crises but do you see more panic?
A: Yes of course. When this artificial sea of liquidity ends, we’re going to see panic in a lot of markets including in the US, including in West developed markets. This is the first time in the recorded history that all major central banks have been flooding the money with artificial money printing at the same time when they’ve all been trying to debase their currencies at the same time. This has never happened in recorded history. When this ends, this is going to be a huge mess.
