Veteran American investor Jim Rogers says the next bear market will be the biggest in his 80-year lifetime.
In a new interview with Real Vision Finance, Rogers says current economic conditions are similar to just before the Great Financial Crisis of 2008 – but the set up is far worse.
Rogers, a close associate of prolific investor George Soros and a co-founder of Soros Fund Management, says that the amount of debt that has accumulated within the system will inevitably lead to a severe bear market in risk assets.
“I know we’re going to have the largest bear market, the biggest bear market in my lifetime. In 2008 we had a big bear market because of too much debt…look out the window, since 2008 the debt everywhere has skyrocketed. Gigantic increases in debt.
So, I think it’s a simple statement that the next bear market will be the worst in my lifetime. Because the debt has gone up by such staggering amounts in the past 14 years.”
Rogers references the great inflationary crisis of 1980 and the enormous interest rates and yields on treasuries that were needed to reel in inflation. According to him, a similar situation is now manifesting in financial markets.
Well there will be trouble in all the markets. Property markets, stock markets, bond markets, currency markets, everything. You’re not old enough to remember but in 1980 and in 1979 when we had our last huge inflationary spiral, interest rates from short term government treasury bills, interest rates from treasury bills were over 21%.
That’s not a typo. Over 21%, because the situation was out of control and we had to do something. We did, it killed inflation, but it wasn’t a lot of fun for a lot of people. So that’s what’s going to happen.”
The Federal Reserve Open Market Committee (FOMC) decided earlier this week to pause raising interest rates for the time being, but foresee two more hikes by the end of this year.
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