Investors should enjoy 2012, as economic stimulus measures will prop up markets this year, an election year, but economies will tank in 2013 and in 2014 when they can no longer grow on ultra-loose monetary policies and government borrowing, says international investor Jim Rogers.
In the United States and elsewhere, central banks have cut interest rates to near zero and have flooded their respective economies with liquidity to spur more growth and hiring, policies that critics brand as printing money out of thin air.
“This is an election year in the United States, and a lot of politicians want to be re-elected,” Rogers tells Opalesque Radio.
On top of monetary policy, governments have run up debts via stimulus programs, widening fiscal deficits in the process.
Sooner or later, economies will have to mop up liquidity and pay down debts, which will result in economic contraction in a year or so.
So enjoy 2012, because growth and rising stock markets won’t last.
“The overall situation is getting much worse because the debt is going through the roof for all of us,” Rogers says.
“You should worry about 2013, you should be very worried about 2014, but this year, more or less, is not going to be so bad.”
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