Jim Rogers (When is the next crash coming/ Inflation or deflation / Jim’s favorite list of countries to invest in right now)

  • 00:01:47 How the world has changed since Jim Rogers first published Investment Biker and Adventure Capitalist?
  • 00:06:23 Are looking at another stock market crash? When will it happen? Will technology (and productivity growth) be around to save us?
  • 00:12:53 Are we headed for a drop of 50-80% in stock prices?
  • 00:15:24 Is the Fed responsible for the bubble?
  • 00:18:07 Are we headed for inflation or deflation according to Jim? Is the dollar gonna suffer?
  • 00:26:26 Is Asia the future? What indicators show us that many countries in Asia are ahead of the US?
  • 00:32:53 Is America with one billion citizens a good idea?
  • 00:40:55 Jim Rogers’ surprising list of favorite countries to invest in.
  • and much more!

You may watch this episode on Youtube – #62 Jim Rogers (When is the next crash coming/ Inflation or deflation / Jim’s favorite list of countries to invest in right now).

Jim Rogers is an investor and financial commentator based in Singapore. Jim is the author of eight books including the bestselling Adventure Capitalist: The Ultimate Road Trip.

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Torsten Jacobi: So Jim, you’re a world famous investor and your best selling author. The first time I heard from you was when you published The Investment Biker and later on The Adventure Capitalist, two books are really laugh and are really adored and it’s been a few years since you wrote these books, since you published them. What do you still remember from your trips? I know it’s quite some time ago, what are the memories that stayed in your brain?

Jim Rogers: Well, many individual experiences that was held hostage in the Congo for nine days once on the first trip, many things that I remember. But overall, I did it because I like adventure and so constant feeling of adventure every day. I had no idea what was going to happen, who I would meet, where I would be, whether I would be there or in a hospital or not. It was just a constant feeling of adventure, excitement and the unknown. It was great fun.

Torsten Jacobi: Yeah, they’ve been great inspiration to me. When I look back and reading those books, that’s how I discovered my love for traveling and my love for investing. Incidentally, one of the first trips that I did was for Russia. A big theme of your books were that you made investments in individual countries. I know there was one of the goals of that trip. Do you still look at those investments?

Jim Rogers: It was not so much a goal of my investment of my trip. That is, the trip was for adventure and to see the world and to learn about the world because of the nature of who I am. If I came to a place and I could see, oh my gosh, I should invest here. I did so. I remember driving through Africa on the first trip and most of Africa was pretty desolate in those days. I got to Botswana and I instantly knew this was a different place. The border crossing, the police, the highways, there were signs, there were shops, there were hotels. I knew that this was a different world. I went and there was a stock exchange, so I went to find the stock exchange and I started investing. I never ever expected to be investing in a place called Botswana when I set out. That was just a place that I could see. I should invest and so I did. I know I still invest all over the world and I still look at places. I’m not as active as I used to because I’m lazy now, but no. I’m still very interested in the whole world. Yeah, we know that you’ve been really bearish on U.S. stocks for quite some time and I think we all share the sentiment that they are. No, no, no. I’m sorry. No, I have not been bearish. I own some U.S. stocks. I have said the next time there’s a bear market, it’s going to be the worst in my lifetime. That’s what I’ve said. I’m not bearish. I actually expect this to keep going for a while. I don’t know why you say I’m bearish. I have said many times. The next time we, in 2008, we had a problem because of too much debt and I have said the next time we have a problem and we will have more problems, despite what politicians will tell you. In Washington now, they say we’ll never have a bear market again. Janet Yellen, who’s the secretary of the treasury, says, don’t worry, we have things we’ve learned. We know what to do. We’ll never have another bear market. So if she’s right, you should not listen. What I have said is the next time we have a bear market, the next time we have economic problems, and we’ve always had them every few years, the next time we have one, it will be the worst in my lifetime. 2008 was bad because of too much debt. Since 2008, the debt everywhere in the world has skyrocketed, so I don’t know how it cannot be the worst in my lifetime. Maybe you know something I don’t know. Maybe the debt has a skyrocketed, but from what I know, the debt everywhere in the world has gone by gigantic amounts, including China, which had virtually no debt 25 or 30 years ago. So the next time we have a problem, it’s going to be the worst in my lifetime. I didn’t say it was coming now. In fact, I expect this bubble to continue for a while. So I don’t know where you get your information, but I have certainly not said I’m bearish on US stocks yet.

Torsten Jacobi: Yeah. A lot of people feel there might be one more round, one more sucker punch, so to speak. So we’ve had this crisis with COVID, and there might be another crisis. And as you said, that might be the biggest in our lifetimes. What do you see happens after that? And when do you see this next crisis happening? Do you have any time horizon?

Jim Rogers: What I expect to happen, but what you just said worries me because it sounds like other people think the same way. This rally, this whatever, I can see bubbles forming in some stock markets. Apple goes up every day, 10 cents never goes down. Samsung always goes up, but many stocks and many countries in the world do not go up or have not gone up. So I expect that since banks and government central banks and governments everywhere are spending a lot of money and printing a lot of money, that this will continue for a while. All the signs of a bubble are developing, but it’s not, you know, when there’s a real bubble, everything goes up every day. If you go to the dentist, the receptionist wants to talk to you about stocks. You know, everybody, it’s happening. We have many new people coming into the markets. We have all the signs of every bubble I’ve ever read about or seen developing, but I don’t see the bubble full fledged bubble yet. Yes, in some stocks, yes, of course. But for the most part, so I would expect it to go on for a while because the money printing is not stopping, the spending is not stopping. I don’t know how long it will last. Maybe by the end of this year, maybe next year, because you can see it happening. You can see stocks are very expensive in some countries, but I don’t know when it will end. I would, and I’m not very good at market timing, but maybe by the end of this year or next, eventually things just get too expensive and too many crazy things happen, and then markets just stop going up because nobody left to buy. I don’t see that yet, but do not count on me for market timing.

Torsten Jacobi: Yeah, I think there’s been so many signs, right, of these extremely high PE ratios, historically especially. We’ve seen this high debt to GDP ratio, and there’s been these crazy bull runs on the tech stocks, and it’s something that I think everyone who’s seen markets for quite some time, as you have done expertly for so long, it makes you feel there’s something brewing, right? There is something out there. One of these possibilities is this big sucker punch, it’s this big crash. What if something else happens, right? If something else happens, like a big boom in actual technology and applied technology, because we had a lot of tech, but tech that really changed our productivity, there wasn’t that much, especially in industries outside of semiconductor and outside of the internet. What if we get our productivity up, and from that point of view, really change GDP, right? GDP actually starts to grow, and maybe 5, 6, 7%, even in developed economies, and then all these debt numbers don’t look so terrible anymore. Do you think that’s a possibility?

Jim Rogers: Well, anything’s a possibility, yes. There’s no question that all these things can happen, and that’s what they say in Washington now, don’t worry. Everything is okay, and even if something bad happens, we have it under control, and Mrs. Yellen and the people in Washington will tell you that we know what to do. There is new technology, new blah, blah, blah. They see what I see, and what you see, what the newspapers see. Yes, there’s certainly interesting and exciting things happening, but that’s happened in every bubble. In 1999, the Wall Street Journal started using the term new economy, capital new, capital economy, because they said, ah, the world has changed so much, it’s a whole different world now. They don’t use that anymore, they stop capitalizing new economy when it all collapsed. But in the late 60s, the 20s, I mean, this is not the first time that America’s had a bubble, nor the world. But at the moment anyway, yes, there are lots of new things. In the 20s, it was radio, and the telephone, and electricity. There were very new, exciting things. Once upon a time, there was a gigantic bubble because railroads. Railroads were just wildly exciting, and the stocks went up all over the world. So there’s always a quote, new technology that comes along, that makes it so people say it is different this time, and railroad certainly changed the world. But if you bought railroad stocks in that bubble, you never made money. If you bought Radio Corporation of America, RCA, which in the 1929, you never, I mean, Radio Corporation listed was one of the biggest companies in America, still exists, but you never made money if you bought it in the bubble. So yes, world changes, technology changes, people change, countries change, but that doesn’t mean you can’t have a bubble that burst and causes huge problems and recession. Mrs. Yellen says no, there won’t be a recession again. History shows, history shows, we will, you know, one of the main lessons of history is people do not learn the lessons of history. I’m not as smart as history. Mrs. Yellen says she is smarter than history. I’m not.

Torsten Jacobi: Yeah, Ray Dalio wrote this really interesting book, and I think other intellectuals before him have made that argument that we go through these cycles, right? So there is an economy that, and a currency that’s strong, that’s where productivity is growing easily, revolutions are low, and then eventually goes into this late stage where we are right now, where the US obviously is by all the signs that we’ve seen, that we are seeing right now. When you feel, when you say there is this next crisis coming, and it’s bigger than anything you’ve seen, what does that mean? Is it just we’re looking at 50% fall in stock prices, or are we looking at something at a several hundred percent devaluation of the dollar? What kind of scale do we have to think of? I grew up in Germany, you know, where my grandparents went through the Weimar Republic, and they told me tales about it, and I actually know it’s billions and billions of Reichsmark. Are you looking into one of these really destructive scenarios, or what’s the magnitude that you’re expecting at some point?

Jim Rogers: I have, by the way, I have some of those Reichsmarks over here on the wall in my office. I have collected some of them. They’re not worth very much right now, as you know, except as collector’s items. Well, you remember 2008, we had a big bear market in stocks in most of the world, and it was terrible. As many stocks went down over 50%. In big bear markets, that usually happens. Some stocks go down 80%, 90% in serious bear markets, and some companies go bankrupt. That will happen again, and I mean, that may sound like some kind of crazy statement, but it’s always happened in every bear market in history, every bear market in the world. It’s happened, so that is what will happen again. Stocks are getting expensive, they’ll get overpriced, and eventually, though, we will have a bear market again, and many stocks will go down by 50%, 60%, 80%. All over the world, and many companies will go bankrupt. You already see companies in China going bankrupt, which is great. The Chinese are not bailing people out, as we do in the West. So, no, you’re going to see companies go bankrupt, you’re going to see some stocks go down huge amounts, but I mean, this is what happens in every bear market. I’m just reciting simple stock market history, the way markets work. They’ve always worked this way, and they always will, except Mrs. Yellen says it’s changed. It won’t happen again.

Torsten Jacobi: Yeah, I think what Yellen has unfortunately adopted is a policy that we’ve seen over the last couple of years as well, is that we seem to prop up these zombie companies and we print large amounts of money to kind of freeze everything in place, not let anyone go bankrupt. We want to save our airlines, we want to save another industry, and we want a lot of tech money, actually, a lot of borrowing comes because the interest rate is so low. Do you feel the current magnitude of the crisis to come, so to speak, is something that is a policy problem? It’s something that the Federal Reserve instigated, or that is something that the Fed is just like a passenger in this train, and they just don’t know what they’re doing. They’re not doing that job, they’re not making it better, but also making it not worse.

Jim Rogers: Well, if there is one single cause, and there never is just one cause, but it certainly would be the central bank in the US, the central bank in the US said, 2008, 2009, we must print a lot of money, and they started doing it. They drove interest rates to the lowest level in history, and other central banks around the world copied them. Everybody started doing the same thing, or nearly everybody started doing the same thing, so if there’s one single source of the eventual problem, it’s the central bank in the United States. The United States is the largest debtor nation in the history of the world. No nation in world history has ever been as indebted as the US is, and no one has ever printed as much money as fast as the US central bank has, but everybody is doing it now. But if there’s one central source, it’s the US central bank, which has caused many other central banks. I mean, in Japan, it’s astonishing. The guy goes to work every day, starts printing money as fast as he can, and starts buying securities, stocks, bonds, ETFs, everything in Japan. It was not just America, many people are doing it now, and eventually, I mean, you know what’s happening in the markets, many markets are up, many stocks go up all the time. Eventually, though, that’s going to end, and it’s going to be a big bear market. But again, that may sound strange to you, but it’s happened for hundreds of years. That’s the way the world has always worked.

Torsten Jacobi: It doesn’t sound strange to me. Absolutely. I think what a lot of people are worried about, and there is this very big switch between, well, we are printing all this money, but we haven’t seen the crazy amount of inflation that you would expect with the trillions that we print with all the stimulus in the US, and that’s a worldwide problem, right? And I know there has been a lot of discussion about how the particular CPI is being accounted for over time, but do you feel like we’re looking into deflation or an inflationary scenario? It seems like the stock market changes its mind on a daily basis. One week it’s inflation, and the next week it’s deflation. Do you have a gut feeling where we’re going with this?

Jim Rogers: Well, throughout history, when gigantic amounts of money have been printed, it has eventually led to inflation. I don’t know where you shop, but most of us know that prices are up. If you go to a restaurant or insurance or education or the doctor or just about anything, you know that prices are up. Now, most governments lie about it for many reasons, and the US, for instance, I’ll use them. Many US government payments are tied to the rate of inflation, and so they obviously have a good reason to lie about inflation because if inflation is high, they have to pay out more money. So certainly in the US, they lie about it. They’re always changing the way they measure inflation as a way to keep the reported numbers down. Also, as you probably know, the price of oil has gone down a lot in the last few years, and since oil is the single most important factor in anything, production, life, you know, when the price of oil went down, and it has been gone down, that helps the measured inflation numbers, but many other things are actually up in price. Whether it eventually, I mean, eventually, it has always eventually been measured because prices go up so much, governments cannot lie about it or they cannot lie as much about it anymore. That is what history shows will happen. Whether it happens first or not, I don’t know. I would expect that what will happen is that when the next bear market comes, central banks everywhere will do everything they can to stop it. They will print, print, print, and governments will spend, spend, spend to hold, to support the markets, but eventually, it will get out of control because if you keep printing and keep spending, and maybe it’s different this time, but history shows that that has always led to inflation eventually. At the currency turmoil, you mentioned the right mark. Eventually, it gets into the currency markets too.

Torsten Jacobi: Yeah. Yeah, that’s a very drastic example of what happened to the right mark in the Weimar Republic, but certainly also had more different political spin to it. A lot of people believe that as long as the US is in that position to have the reserve currency, we won’t really see an impact on all the spending on the dollar. The dollar will fluctuate quite a bit and I think it’s part of a policy goal to make it cheaper, cheaper than other currencies around, but it won’t lose the status as a reserve currency for quite some time. Nobody knows about the next 200 years. What do you feel is the position of the dollar really status reserve currency or will Bitcoin or something else take over?

Jim Rogers: Well, I own a lot of US dollars at the moment, not because it’s a sound currency. As I said, the US is the largest debtor nation in world history. I own it because I would expect in the next turmoil, economic turmoil, market turmoil, people will people always look for a safe haven in a time like that and many people for historic reasons think the US dollar is a safe haven. It’s not, but people think it is. So I would expect that the US dollar will go up a lot. Next time we have a problem, it will get overpriced. It might even turn into a bubble itself. I hope that I’m smart enough to sell it at that time. You mentioned 200 years. Well, history shows that no reserve currency has lasted over 100, 150 years in history. It’s not the first time we’ve had a major currency as the world’s medium of exchange. So in the US dollars, who knows how long it will last, but I would suspect we’re getting closer to the end. Many countries are already looking for a replacement or a competitor to the US dollar. The US is the largest debtor nation in world history. It’s getting more and more overextended. So I would expect that the US dollars rain as the top dog will be coming to an end sometime in the next few years. And I don’t know what’s going to replace it. It might be the Chinese renminbi, which of course is absurd to say that now. The Chinese currency is a blocked currency. You can’t have a blocked currency as the world’s medium of exchange. But something has always come along. If we were sitting here 100 years ago and I said, oh, it will be the US dollar, people would have said, what are you talking about? But the US dollar did replace the pound sterling. As you know, over the past century, and something’s going to replace the US dollar. And I would expect it sooner than 200 years. I’d be great if it lasted 200 years. I’m an American citizen, but I don’t see how that’s possible with the state of the world as we know it.

We know you’ve put a lot of the X in the Asian basket, so to speak, right? So you moved to Asia quite some time ago. I heard you also invested in Chinese wine, for instance, something a lot of people here in the US have never heard of. Why do you think Asia is so much better positioned on then the old, the old West, right? So Europe or the United States? Well, I am a US citizen, a taxpayer and voter. But again, you look at history, no country stayed on top, either the currency or as number one. If you go back in history in the past couple of thousand years, most of the time it was China or India that was on top as the most successful country in the world. Certainly in the last few hundred years, Europe, Britain, Germany, other countries came to the top. But that has been rare in the last 2000 years, and it will probably be rare again going forward. I have no idea what will happen in the future, but as I look around, I see most of the West has huge debts, gigantic debtor nations everywhere, and debts getting higher and higher, demographic problems in some countries. I don’t see things on a dynamic upwards path. Maybe I’m wrong. As I look to Asia, I see lots of people, high savings rates, debt now, but nothing like debt in the West, and the demographic problems that are here are not as bad as the demographic problems in the West. So I would expect that it will be, I don’t particularly like saying this, but the 19th century was the century of the UK, the 20th century was the century of the US, and that’s what history has always done, countries come and go. I would expect the 21st century will be the century of Asia. That’s why we moved to Asia. I wanted my children to grow up knowing Asia and knowing Mandarin, Chinese, the language, to prepare them for the 21st century. Maybe I’m wrong, maybe it’s going to be Brazil, maybe it’s going to be Germany, but I would suspect it’s going to be an Asian country. Yeah, I think there’s a lot of this entrepreneurial strength, and as you say, the macroeconomic climate in Asia, that’s really strong. I think that’s something that really sets it apart from all the other continents and regions. One thing that might come to this as a saving grace of the US, and I don’t know if it’s going to be enough, but there is this belief that, I don’t know if you ever heard of Ray Kurzweil, he’s a futurist. He believes that there is something, not like the internet bubble, it’s not just a marketing thing, there is something fundamentally different happening in technology in about 20 years from now. While we ramp up to this, and he’s been saying this for a long time, so he didn’t just come up with it the last few years, he’s been saying this for at least 30 years, and he put a number on it. He keeps saying, and I’m reading a lot about that, is that when this technology actually boots up, we will see the biggest impact in terms of growth rate in the developed economy, so as more developed an economy is, as bigger can the impact be, and now China has been developed by now too, but as further out to you on, so different than what we see now, we see a lot of economies that are not as developed, they have to higher growth rates, but once this technology face kicks in, and that’s obviously a big if, we’ll see this reversing, and that could be like the saving grace with the dynamic that the US economy still has, where people have a certain amount of flexibility and have huge amounts of education. I think that’s a great combination that you see a lot in the US and to an extent also in Europe. I kind of missed that a little bit in Asia, maybe that’s just me, I went to pretty much every country in Asia over time, but you spend way more time, what do you see from a motivational perspective, what do you see in Singapore and maybe also in China that you feel like Asia is likely the most successful place in the world? Well, throughout history, education, people with education, that education has led to new developments, new technology, etc. The British became the most successful country in the world, they had a high emphasis on education before, certainly in the US, the US had a huge emphasis on education 150 years ago, and the US eventually became the most successful country in the 20th century. Certainly in Asia, there’s a gigantic emphasis on education, my kids go to school in Asia, and I will tell you that their, the level of education, the emphasis, the homework, the rigor, the demands, much, much, much higher than in the US where I went to school when I was a kid. This is certainly a different part of the world and looking at American education now compared to Asian education, I mean who knows if it’s going to pan out in 50 or 100 years, but I do know that education is much, much higher here, much more advanced here than in the US. Will that turn out the same way? I don’t know, it usually has educated people, but you know if you look at what’s happening in China, I mean the Chinese are certainly ahead of many countries as far as technology is concerned now, I mean in China they don’t even use money anymore, I tried to buy an ice cream the other day in China with money, they wouldn’t take it, they don’t use money, you can’t take a taxi in China with money, you know all the money is already on the computer, it’s already computerized, other countries are working on it, but Asians are ahead of us in many ways, if you look at 5G technology, obviously China is ahead of the rest of the world, so will it continue that the education pays off in Asia? Probably, it has in the past anyway, I mean I presume that Asians have the brains that everybody else does, but now in Asia there’s a much stronger emphasis and there’s a huge emphasis on saving and investing, you know the US is the largest detonation in world history, well most of the Asian countries still have high savings rate and everybody, every economist in the world will tell you you have to have high savings to have investment, I mean even Karl Marx knew you had to have capital to develop an economy, he got the rest of it wrong, but everybody knows you have to have lots of capital to develop an economy and a society, the savings rates in Asia are much higher than they are in the West and therefore the investment rate, I mean who knows, we will see, we can have this show again in 100 years and we will know, hopefully we will know the answer in 100 years, he keeps telling me we can live forever, we just have to wait another 15 years and then literally we will never age again, we can reverse age into whatever it is we want. I don’t know the person that you were telling, what was the name, the person’s name? Aubrey de Grey, he’s like the Elon Musk of longevity research, he’s gotten really famous and got a couple billion dollars of backing now and it’s quite an industry now, will it happen in 20 years, that’s another story. Where does he live? Silicon Valley, I think in Montview. Well there is no question that America has been a gigantic technological frontier, but as I say, the Chinese produce something like 10 or 20 times as many engineers as the US does now, I’m sure most of them are bad engineers, but some of them are great engineers, look at Alibaba, look at Tencent, you know, there are many great success stories, as I said, look at Howei, there are many great success stories in Asia now, the Indians and others produce lots of engineers. Listen, I’m an American so I hope it continues, but I also know what history shows and I can see what’s happening around me, I look out the window. I live in Singapore, Singapore is certainly much more advanced as an economy than most western countries. Oh, I love Singapore and you know, I was in Miami recently and I felt like it’s becoming a little bit like Singapore and I was really happy about that because most Americans are just, you know, they’re 50 years behind, our real infrastructure is probably at least 50 years behind what’s the standard, what’s up to date. One thing that a lot of people play with is they say, well, why don’t we bring successful people to the US, right? Why don’t we shoot for a big goal, say one billion Americans, Matthew Glaciers made that point. So we import the best brains from anywhere on the planet and wherever they want to come from and we bring our American values, you know, our entrepreneurship, the way how we see the rule of law, we did the freedom, and we put these two things together and we make America by far again the most dynamic place on the planet. Do you think there is something to it or America is doomed in its current mindset? I’m doomed. It’s a good strong word. I will just say again that history shows nobody has stayed on top very long, 100, 200 years is a nice long run as far as history is concerned. 150 years ago, the US did everything it could. We tried to get people to immigrate to the US. Some people, we gave people land. If they would come to the US, if they would come and work, we actually gave them land. I live in Singapore and you know the rest of that story. We became the most successful country in the 20th century. I live in Singapore and 50, 60 years ago, there were only half a million people here, but the government decided to attract educated, successful, smart people. Now, there are five and a half million people Singapore has become or certainly has been one of if not the most successful country in the past 50 years. I mean, it’s astonishing what has happened here and that’s because they tried to attract and did attract, as I say, smart, educated, successful people. They limited it. If you weren’t smart, educated, or successful, they wouldn’t let you come unless you want to be a bus driver or something. They certainly knew they needed bus drivers. But for the most part, the rest of the story is, I mean, I can look out the window and I can see what’s happened here. It was a swamp 60 years ago and now it’s astonishing. So yes, that’s a wonderful, wonderful approach throughout history. Countries which have done, followed that approach have succeeded and done well and countries which have closed off have done badly. History is full of countries which closed off and went into decline. So you’re exactly right. Everybody should do it. But politicians like when things go wrong, politicians blame foreigners. It’s very easy to blame foreigners. And so then they start talking about how bad the foreigners are. We don’t want them. We don’t need them. And you, countries go into decline. Yeah. It’s its internal strife, right? And then we see these immigration policies are result of that, which is, which is, you kind of do mean yourself. You have the ability to change the course of history and the future. But sometimes, you know, the population is not ready for it. When you see, when you see this competition that now is really stark between China and the United States, do you think it will only heat up further, which I think is what most people would expect? Do you see this as leading to a conflict in the next 20 years, like something of a cold war or a bit of a hot war also? Well, unfortunately, history shows that when things go wrong, politicians blame foreigners. Foreigners have different language, different skin, different religion, different everything, different food, different clothes. So it’s very easy to blame foreigners and they always have throughout history. So I would suspect that will continue. It doesn’t have to happen, but it nearly always has. You know, the U.S. and China work together for 20 or 30 years there and China succeeded America. It helped America a great deal. As the U.S. and China were not in competition or, you know, strong competition. So it can happen, but it usually happens the other way. And since China is obviously the biggest country and the most successful country around right now, American politicians are going to blame the Chinese. Is it good? No, it’s absurd. We could work together and become more and more prosperous together for a long time. I would suspect, though, again, history shows that’s not the way people work. When things go wrong, they blame the foreigners. And the Chinese are the easy foreigners to blame and America, not just America, but other countries too. And so it is often led to shooting wars, not always, but when things go wrong, it’s very easy and passions get stirred up and it’s often led to shooting war. Is it good? No, it’s absurd. Will it happen? It has throughout history. Yeah, a lot of people have this theory, former allies of the United States will eventually develop something of a superiority complex. They will rise up to a point where they feel like they didn’t get that fair share. Whatever that is, that is world GDP or they didn’t have enough for growth in their own company, in their own country, and they eventually will go to war with America. Most of the time that war, at least the last 100 years or last 200 years even, it seemed to be the better result for the United States. Do you feel this will continue or we will go through these wars, but we will see China being coming out as the dominant power and then probably also providing the reserve currency, as you said earlier in Mimi. Well, what you described has always happened. You know, as recently as 1910, the British and German royal families intermarried, went on holidays together. I mean, they were the fastest, fastest of friends, the British and the Germans. As recently as 1910, as I say, well, you know, the rest of that story, it didn’t last. And that has happened frequently in history. And yes, I can already see some American former allies, as you call them, already starting to ask questions and say, wait a minute, this is not right. Many countries are looking for a competitor to the US dollar for political reasons. I mean, the US, if they get angry at you, they put sanctions on you and you cannot use the US dollar. Well, many people will say, wait a minute, that’s not the way an international medium of exchange is supposed to work. So they’re supposed to be neutral. So they’re now looking for competing currencies. They’re starting to set up competing central bank or international banks, competitor to the IMF and the World Bank. So it’s already starting to happen in Asia. A couple of new free trade zones have opened up in the past few years. Trump withdrew America from the Transpacific Partnership. Well, everybody looked around and said, oh, let me China’s on top now. So little of China, an open field in Asia. And a few months ago, another free trade zone started, not including America with many of America’s allies. So it’s already starting to happen. People are asking questions and looking around. I’m not the only I’m not the only person who knows that America is a gigantic debtor nation now. I mean, other people know that too. So I can see people asking questions, people starting to start their own independent payers. Is it it’s not total chaos yet, but it can happen. And many other countries are look and back to what I was saying earlier, China is a huge trading nation for many nations in the world now. So as many people look around, they say, wait a minute, we make a lot more money trading with the Chinese than we do with the Americans. Simple economics. And it’s a simple fact. And that will continue. What is your sentiment on South Korea? Would you trust that market to continue to go up? Is that a country you would put some money in? Well, I would expect I would expect the 38th parallel, which divides North and South Korea to open up sometime in the next few years. And when that happens, the Korean Peninsula is going to be an extremely exciting place. It’s a country of 80 million people on the Chinese border, but they have gigantic amounts of cheap, educated discipline labor in the North with lots of natural resources in the North and in the South. They have lots of capital and management ability. So I would expect that Korea, the peninsula, once the 38th parallel opens to be a very, very exciting place for 10 or 20 years, perhaps the most exciting place in the world. I mean, it’s not going to be the number one country in the world for a century or so, like the US or other countries have been. But no, I expect very exciting places, things to come out of Korea. Not now. There are many problems in Korea and they’re not dealing with them very well. They have a terrible birth rate. They have many problems, but lots of protectionism. I mean, it’s unbelievable the regulations and protectionism that exist in Korea. But once the 38th parallel opens, I would expect Korea to be an extremely exciting place. Yeah, I’m fully with you. I lived through the reunification of Germany when I was younger. And I saw how well it worked out. Obviously, you have to manage your expectations, how well it worked out for people in the East as well as in the West. And it was this enormous boost, a shot in the arm for German GDP, Western German GDP for 10, 20 years almost. When you look at other countries that might be post conflict, this is not a perfect comparison, but South Korea and North Korea. But when you look at other countries that are post conflict, what else comes to mind where you feel like, well, this is a really interesting country, maybe not just to go there, but also to invest in? Well, as I said, I expect, I didn’t say, but I will say, the opening up of Korea is going to be different. In Germany, all of the most of the neighbors were poor. I mean, Poland, Russia, Czechoslovakia, none of them had any money, and they were all trying to, they needed money. They were trying to get money, including East Germany. In Asia, the neighbors, China, Russia, Japan all have a lot of money, and they all want to invest in Korea. Once this opens up, nearly every major South Korean company has a task force now studying what to do when it opens up. How do we invest? How do we develop there? I mean, you know, Samsung, I mean, you know, the Korean companies, many of them are already studying what to do, so I don’t see a shortage of capital coming in the Korean Peninsula, and they both North and South spend huge amounts of money on defense now, but they’re not going to spend money on defense in the future once the 38th parallel opens, so the Korean Peninsula will have a lot of capital and expertise, and the neighbors are not going to be competing. I mean, East Germany had to compete with Poland, and Czechoslovakia, and Russia, and everywhere else. It’s not going to be that case in the Korean Peninsula, so I don’t expect the problems that you experienced that will happen in the Korean Peninsula. Sure, there’ll be some problems, but there’s going to be a gigantic building boom, there’s no infrastructure, there’s no anything, so I would expect the Korean situation to develop differently from what happened in Germany. I’m fully with you. I think North Korea is, if it ever opens up and becomes part of one Korea, this is going to be an amazing success story by all accounts. What else would you feel is a good country right now if there’s obviously the if for the catalyst maybe that we need to make sure we know about that, but what other countries should investors look at that look really promising that might be just coming out of a war or a conflict over the last 20 years? Well, everybody has to stay with what they know, but I mentioned Korea, I mentioned Vietnam, it’s an obvious choice right there on the Chinese border with 90 million people, lots of natural resources, education. Colombia is a country where that interests me, it’s had a long civil war. I have learned in history that if you go to a country after a war or a civil war, you usually find great opportunities, everything is cheap, everybody there’s despair, there’s not much capital, not much anything. Colombia is like that now. Venezuela soon, I mean, I cannot invest in Venezuela because I’m an American, but other people can. I went to Venezuela a few months ago, but unfortunately, I cannot do anything there. I have learned that if you invest in a catastrophe, usually in a few years you look pretty smart and that’s certainly Venezuela at the moment. Venezuela, Colombia, Vietnam, Russia, I have investments in Russia and I was very pessimistic about Russia for decades. I am not so pessimistic anymore. There are countries around the world, I mean Cambodia, but that’s a tiny country, so it’s not what you can say about Cambodia. I mean, Rwanda in Africa, but only 11 million, 12 million people in Rwanda, so it’s not going to become China or something, but there are countries that have opportunities going forward. When you look at all these countries that are all over the planet, what is kind of your valuation matrix that you use in order to determine this? This country is close enough so you could invest into it again. We noticed saying we should invest when the blood is in the streets, but that is often too dangerous to even go there. It’s why the valuations are so low, but is there like a yardstick that we use? Obviously, I’m sure you might not be able to disclose all of it, but is there like a streaker source of the appliance? Well, this country is at the right point of time now. This is worth an investment, or we have to wait just a little bit longer? Well, just because a country has been a disaster, it doesn’t mean that you should invest there. If you’d invested in Cuba 50 years ago, you’d still be waiting if you’d invested in North Korea 50 years ago. You’d still be waiting. There has to be some change on the horizon or something that’s changing to make it better. I mentioned Rwanda. Rwanda was a disaster, but the fairly new government in Rwanda understands what you have to do to develop an economy and to develop a society. They had an unbelievable disaster. It’s just slaughtering everybody, but the new people seem to understand. You have to find some catalyst for change that will take place. I mentioned the Korean peninsula. What I said was when the 38th parallel opens, I didn’t say Russian to North Korea now. By the way, I cannot invest in North Korea now because I’m an American, but other people can. There are people, Russians, Chinese, pouring in there now because they see the opportunities, but there has to be some change that comes along to make it all happen. Otherwise, you might sit around waiting for decades. When you look at investment opportunities now, and I know you have really a broad spectrum of what you’re looking at, what is your expected return? Are you looking at say 20% a year or looking at 10X, 100X? Do you want to do better than the quantum fund at some point? What’s going on in your mind? What do you think is a realistic scenario? Well, I don’t have a number. That’s not in my way of thinking. If I find something that’s very cheap where there’s positive change taking place, it usually leads to great returns. Whatever the country, and it doesn’t have to be a specific industry. It could be an agricultural nation. If it’s changing, it could turn into great, great things for the country. I’ll use Russia as an example. Russia has gigantic assets, not much debt. Nobody would lend money to the communists. If I’m right, there’s a change in the Kremlin. They understand they cannot be the same as they were for decades, many decades. If that’s right with lots of assets, positive attitude, it could be a great success story. If you find the right companies, of course, you can make many times on your money. That’s my approach when I look at a new company or industry or country. That’s so refreshingly different than when you say you talk to VCs, right? So VCs have a very certain perspective. They are looking at what they want as a return. Remember from your book, correct me if that’s wrong, but I think I remember at the time you were saying when you find such a country that maybe it’s just past that catalyst or the catalyst in the works, you should look at consumer staples, right? So breweries or beverage, bottlers, those were good industries to capture that potential growth. Is that still the case? Well, of course, that is usually if a country goes from a disaster to prosperity, people participate and whether that’s restaurants or retail shops or whatever, you know, people wear better shoes and more shoes and more clothes, etc. No, that is clearly an obvious way to play, but it could be different things. It depends on what’s going on. If you look at places like Rwanda, it’s got gigantic tourist opportunities, so that may be a better way to play to look at tourism. Rwanda is trying to become an international air hub, believe it or not. I mean, maybe it’s airlines. It just depends on the circumstances in the nation as you look around. I mean, Columbia has gigantic advantages as far as marijuana is concerned. Marijuana likes stable temperature. They like to be the stable, you know, 12 hours of daylight, 12 hours of night. I didn’t know all this about marijuana, but you know, marijuana is now legal in Columbia, so maybe it’s marijuana. It depends. Each country is different and you have to assess the circumstances to decide on your investments. The first thing that I do when I go to the country is really ask around what is this USP, right? This is a unique selling proposition. What is this country really proud of? Which could be a product or could be a service potentially that could be exported. And also, what is the current trend? So when I say to, for instance, I go to Ethiopia and everyone wants to build a tower and wants to coown the tower like an apartment building right or an office tower. Many of these will never be finished, but for quite some time they already produce revenue. So that’s kind of my MO to get a feel for the local economy. But one thing that I felt hasn’t gotten a lot of opportunities and maybe I’m just not seeing it and you have incredible eye for this is currency speculation, right? So your former partner, George Soros, he had a lot of success with the British Pound and speculating against it. Do you see that still something you use for yourself as an investment opportunity to look into specific currencies? Well, that was over 40 years ago that I was Soros. You might as well ask me about my first wife. That’s not relevant to my life or anything I do over 40 years ago. But currencies are certainly an important investment class in the world. Currencies are bigger than most other markets of any kind that you can think of. So one must be aware of the currency, even if one doesn’t invest specifically as a currency investor, one has to know what’s going on. India, the currency is blocked. China, the currency is still blocked to some extent. Russia does not have a blocked currency. You have to understand these things because it’s going to affect you one way or the other and your investment. So one must understand currencies, but it may also lead to great opportunities for investors. I’m asking specifically about Turkey. It’s a country with very high interest rates, but also very high inflation. And I think the judgment on Turkey is all over the map. It’s from, oh my gosh, it’s going to fall apart and Erdogan is going to ruin it too. This is an actual economy that is ready to take off. And when I go there, see construction everywhere, the infrastructure is rebuilt, there’s a fantastic new airport, and the whole place looks like it’s coming together. What’s inverting Turkey, and especially the currency? Well, I wish you hadn’t asked because other people may now look, but it collapsed recently, the government collapsed, everything collapsed, and I’ve got it on my list of to do and to look at Turkey and get up to date, but that’s probably a great opportunity. Again, I have learned that when a country collapses or when there’s a disaster, it usually leads to opportunity. And Turkey’s on my list. I’ve been doing other things, so I don’t have an answer right now, except that if I weren’t doing other things right now, Turkey would be very, very high on my list. Have you ever invested in Argentina? I’m curious. I have invested in Argentina. I owned Argentina in stocks a couple of times. That’s another example that should be on my list right now. It’s like in some degree, it hasn’t had an immediate collapse like Turkey did a couple of weeks ago or a month ago, but no, Argentina is certainly that kind of company. I mentioned Venezuela before. What a nightmare, what a disaster, but I cannot do anything in Venezuela, but it’s the kind of place like Argentina where there are probably great opportunities for some people. From the recent reports on those where about a year or a month ago, a lot of people, even the extreme traveler community, so I just had Charles Valle on, he’s the most traveled person in the world, and a lot of the extreme travelers would stay away from Venezuela as much as they can. They would literally just go to the airport and that obviously makes it really tricky to even scout investment opportunities. How did you do it? You said you were there just a couple of weeks ago. No, no, I was in Venezuela a few months ago because it was a disaster and it was, it is a disaster. There is the bond market. There is a stock market. They’re sort of a currency market, not really, but at times Venezuela has been one of the most successful Latin American countries and it probably will be again, as I said before, I have learned in history, if you get involved in a country when it’s a disaster and you can find a reason that things might get better, one should invest. And if you have the staying power and the patience, you’ll probably make a lot of money. And that’s my view of Venezuela at the moment. Also, of course, the price of oil went down. Venezuela has gigantic amounts of oil. I think that Venezuela has the highest proven oil reserves in the world, or certainly among the highest. So there are lots of reasons to think about Venezuela, but there’s nothing I can do because I’m an American citizen right now. You have your own framework. We spoke about that just a moment ago. Do you feel other funds, mutual funds maybe, is there a way to access that amazing knowledge that you build and invest my own money into it through a vehicle? Is there someone that you say does great work or maybe you have your own investment vehicle that’s open to the public? No, no, I only invest my own money. I don’t give my money to other people. There are certainly good investors in the world. There are certainly mutual funds that are successful and that’s not my style. So for prospective investor, you’ve got to put the work in, right, in order to see these returns that are really of interest. Well, whatever those returns are, they’re probably their rate, right? So maybe a few hundred percent over the decade, for instance. Well, if you find, I mean, you don’t have to listen to me, history’s pretty clear. If you find the right companies, the right countries, the right sectors, you can make a huge amount of money. There have been times in history when agriculture has been in the, the farmers have been the kings of the world, have been other times when agriculture has been a nightmare. But it depends if you do your homework and you find the right industry and the right people, you might make a lot of money, huge amounts of money. Well, with that note, Jim, I really want to thank you for doing this. Thanks for taking the time. I really appreciate it. And I know your time is really valuable. Well, thank you. It’s been fun. I hope we can do it again somewhere sometime, someday. And maybe we’ll meet in Venezuela sometime if it’s ever legal for Americans. That sounds like a plan. Hopefully it changes. Or North Korea. Maybe I’ll meet you in North Korea someday. There will be, there will be another candidate indeed. If it’s, Jim, thanks a lot. I really appreciate it. My pleasure. Thank you. Thank you. Thank you. Bye bye. Bye bye. Bye bye. Bye bye.

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