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Introduction
Jim Rogers grew up in Alabama and started out in business, aged six, selling peanuts and soft drinks at
baseball games. He was educated at Yale and Balliol College, Oxford. After he co-founded the Quantum
fund in 1970, the fund surged by 4,200% over the next decade, while the Standard & Poor’s index rose by
47%. Having earned enough money to “retire” at the age of 37, Rogers has since worked as a professor of
finance at Columbia University, columnist, author, and a contrarian investor. In the early 1990s he traveled
100,000 miles through six continents on a BMW motorcycle and ended up with a portfolio of investments
in some of the world’s most unexpected markets. In 1998 Rogers became bullish about commodities,
predicting an enduring commodities rally and later launched the Rogers International Commodities Index.
Believing that the future belongs to Asia, he sold his mansion house in New York’s Riverside Avenue in 2007
and now lives in Singapore, partly so that his two young daughters can learn Mandarin.
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Is the current financial crisis a tipping point, with developed nations losing
their status as financial centers and Asian centers taking over?
Yes, definitely. This is a period that we will look back on and say, “Oh, yes, that’s when it all really changed.”
The money now is in Asia. The largest creditor nations in the world are China, Japan, South Korea, Taiwan,
Singapore, and Saudi Arabia. Forty years ago none were in Asia. Experience tells us that; money is not
dumb. It goes where the money already is; everybody follows the money. That’s why New York became
the world’s financial center: because America had the money, the balance of trade, the reserves, and the
economy. But America doesn’t have the money any more and nor does the United Kingdom.
If Asia is poised to take over as the world’s next financial center, which city do
you think is going to be dominant?
No single financial center has emerged in Asia yet. Singapore and Hong Kong are working at it, and they
both have a lot going for them. Hong Kong has a negative, which could turn out to be a positive, in that its
neighbor is China. China has a blocked currency, so it cannot emerge yet. Seoul is saying that they want to
become one, but they still have a host of unbelievable regulations, and even the Koreans themselves aren’t
on top of these regulations. You can’t have a financial center without a free flow of capital. There’s no free
flow of capital in South Korea right now.
What lessons do you think the developed economies can learn from the
banking crisis? How should they be reforming their financial systems to
ensure they can recover?
The lesson that they should learn is to let the market work. During the past 15 years, in the United States
especially, they refused to allow the market do its work. Alan Greenspan swore every day that he believed
in market forces, but every time there was a problem he over-rode the market. If he had allowed “Long-
term Capital Management” to go broke, we would not have had these problems now. That allowed people
at Bear Stearns and Lehman’s, who were incompetent before, to carry on. Instead of licking their wounds
and learning how to drive cabs, they went off looking for the next fish to fry. At the time everybody thought
Greenspan knew what he was doing. But if you look back at some of the things he said, we now know
he was a fool. Through his policies, he goosed up a consumption and a housing bubble. He said, “The
derivatives markets are great. They’re a fabulous thing to help the financial system.” He came out and said
all these things out loud, officially, under oath.
What is the commercial bank of the future going to look like do you think?
They are going to take deposits and make loans to people they know, and they’re going to make a living.
Securitization will come back someday but, if and when it does, it will be on an entirely different basis. It will
be pretty straightforward and transparent. One thing that was lacking in the market before was transparency.
Nobody could see what they were buying or selling. Some of these derivative instruments had offering
circulars of over 1,000 pages, which I doubt anybody read, including the people who wrote them. Nobody
knew what was in this stuff.
Were the people who bought those things greedy or naive, or both?
Well, I guess they were certainly naïve. I hope they were naïve, maybe they were just crooks. Greedy? Well,
everybody was out there trying to make as much money as they could. The first securitizations were fine.
Given Obama’s economic policies, are you worried about the future of
America?
The hope is that he didn’t mean it, that it was just in the heat of campaigning. Or, even if he meant it, that
somebody will pull him aside and say, “Look, Mr Obama, this would be a disaster.” And that he would listen.
But who knows? Of course I’m worried. This is one of the reasons that markets kept falling in the build-up to
November’s presidential election. Everybody knew Obama was going to win and everybody knew what his
policies were.
More Info
Books:
• Rogers, Jim. Investment Biker: Around the World with Jim Rogers. Chichester, UK: Wiley, 1994.
• Rogers, Jim. Adventure Capitalist: The Ultimate Investors’ Road Trip. Chichester, UK: Wiley, 2003.
• Rogers, Jim. Hot Commodities: How Anyone Can Invest Profitably in the World’s Best Market.
Chichester, UK: Wiley, 2004.
• Rogers, Jim. A Bull in China: Investing Profitably in the World’s Greatest Market. Chichester, UK:
Wiley, 2007.
• Rogers, Jim. A Gift to my Children: A Father’s Lessons for Life and Investing. Chichester, UK: Wiley,
2009.
See Also
Viewpoints
• Viewpoint: Bruce Misamore
• Viewpoint: Frank Feather
• Viewpoint: Hamish McRae
• Viewpoint: Linda Yueh
• Viewpoint: Mark Mobius
Country Profile
• China
• Hong Kong
• Singapore