Submitted by Taps Coogan on the 3rd of March 2020 to The Sounding Line.
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Legendary investor, author, and Chairman of Rogers’ Holdings, Jim Rogers, recently sat down with Kitco News to discuss his outlook on the global economy and the Coronavirus outbreak. Mr. Rogers, a resident of Singapore, is decidedly unconcerned about the virus, noting that people’s reactions are likely to do more harm to the economy than the virus itself. While he worries that those reactions may lead to a recession, the stimulative measures being announced around the world may first lead to “the last big blow-off rally.”
Some excerpts from Jim Rogers:
“(Investors) should probably be buying. I know (the sell-off) is attributed to the virus, but remember, the virus has been around for three months now and the virus has been spreading a lot of places. If you ask me what’s going on, the market got overbought, it went up 15%-20% with virtually no down days… and now we are having a sell-off. Of course, whenever there is a sell-off, journalists find a reason…”
“There is no reason for you to have any fear. That is the point I am trying to make. So far this year in America something like 20,000 or 30,000 people have died of the flu. I don’t see anyone panicking… because of the flu. Two or three thousand people have died of this particular flu… Living in Asia, yes the shops are empty. Yes the restaurants are empty because everyone is in panic, but very few people are sick.”
“…The virus is peaking. Certainly in China it’s peaking because they took draconian measures… They closed the whole place down which you probably couldn’t do in most countries… but the (economic) effects are going to go on… We’re overdue (for a recession). It’s been over ten years, the longest in American history without a recession… Even if the flu is over, the repercussions are going to go on for a while and it might tip us into a recession. We are overdue…”
“What you have in Asia and other places now are governments panicking, cutting rates, printing money, spending money. The US is probably going to do that too as they get more and more panicked. If you start seeing cases in New York or L.A. or places where the media is… they are going to cut rates. They are going to spend more money and print more money and that might lead to the last big blow-off rally.”
With yesterday’s massive bounce in markets, the largest single day point gain in Dow Jones history, it looks like Mr. Rogers may have a point. Undoubtedly, there are large risks in all directions and markets seem determined to move wildly both ways. Just a few days prior was the single largest point decline as well.
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