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Billionaire investor warns of fresh global crisis in 2013 or

2014

By Melissa Law | Yahoo! Finance Singapore Fri, Aug 24, 2012 10:00 AM SGT

Jim Rogers explains that he remains bearish on the outlook of the global economy. (Yahoo!

photo)

Commodities guru, Jim Rogers, warns that the current financial crisis is set to worsen in the next couple of years, with fresh

problems surfacing in 2013 or 2014.

Speaking to Yahoo! Singapore at the Shares Investment Conference 2012 press briefing on Thursday, Rogers explained that

he remains bearish on the outlook of the global economy because "nobody's solving the problems in Europe".

"At the moment there's an election in America and an election coming up in Germany. Both of those countries are major

economic powers, and they're doing everything they can to get re-elected. They're both spending a lot of money and they're

printing a lot of money to get through the next election," said the 69-year-old American investor, who co-founded of the

Quantum Fund along with George Soros.

Rogers, who relocated to Singapore with his family in 2007, added, "But I would suspect that after the elections, probably

2013, 2014, you're going to see more economic problems and a lot of those problems will come out of Europe."

He then pointed out that nobody's really decreasing their debt in Europe, with most countries struggling under increasing

debt except for a few small countries like Bulgaria. He added that current measures to help the affected nations are merely

pushing these problems away into the future.

But that's not the only problem. Respected stock trader and author Mike Bellafiore, who was also present at the press

briefing, said that the current crisis is not just about debt.

According to Bellafiore, who is a partner and co-founder of New York proprietary trading firm, SMB Capital, the current

financial crisis also has a problematic political dimension to it.

The trader who owns three businesses in America said, "In 2008, there was really a banking crisis. (The current crisis) is

more of a political crisis, in the sense that essentially Europe is at the mercy of(Angela) Merkel and how France and

Germany decide to handle the situation with Greece."

Bellafiore then raised two questions: Is Germany really going to continue to pay for the debts of Greece, Portugal, Italy and

Ireland?

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And how likely is it for someone who lives in Greece to sign up for years of austerity when it wouldn't be difficult for a

"populist Greek politician" to rally the people's support to leave the European Union and start their own currency?

"It's not just going to be just an issue of 'Can we work out our debt?'. It's an issue of 'Do the people who are making these

decisions have the appetite to continue?' and 'Do the residents have the appetite to sign off on this?'," he said, adding that at

the moment, nobody really knows the answer.

Turning to the issue of China's slowing economy, however, both investors are in fact pleased and optimistic rather than

worried.

Rogers explained that China's recent policies to cool its economy are taking effect, so that they can "pop" their property

bubble and defeat inflation.

Bellafiore said that China "has become softer purposely" and they are "trying not to grow as quickly" because of inflation, as

opposed to it being an effect of the global crisis.

Rogers also added that Asian nations have generally been doing well in building up their reserves and spending less, which

he says, is the way to go for countries to tide over the financial crisis.

According to the investor who currently lives in Singapore with his family, the city-state in particular, has been "doing a lot

of things right".

"(Singapore) doesn't have staggering debts like America does. It's been saving money for a rainy day and loosening up its

economy and its political system in many ways," he said.

The father of two, who rides a bicycle to and from his children's school every day, has only one tiny problem with

Singapore.

"I just wish they would be more bicycle friendly," he said.

The Shares Investment Conference 2012 is part of investment festival Phillip iFest 2012, which includes 20 seminars

spanning over four weeks from 24 August to 15 September.

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