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article imageJim Rogers: Everything is coming together for China this century

By Andrew Moran     Jan 19, 2010 in Business
The Chairman of Rogers Holdings and Co-founder of the Quantum Fund, Jim Rogers, attemped to debunk Jim Chanos' remarks that China is in a bubble. Rogers also provided insight into the current state of the global financial system.
Digital Journal reported last week that Jim Rogers, author of “Hot Commodities,” criticized the analysis made by Jim Chanos, famous short-seller, that China’s economy could implode because it’s in a bubble. Rogers said people like Chanos “couldn’t spell China 10 years ago.”
Rogers is at again, according to China Daily, by debunking Chanos’ belief. Rogers explained that the Chinese economy is not in any imminent threat of collapse and added that business investors should stay involved with China.
“It is absurd to say China is in a bubble when the stock market is 50 to 60 percent below its all-time high. If you have a bubble you have things going through the roof. You have everybody screaming fire every day.”
Rogers added that Chanos’ comments that China’s real estate sector was 1,000 times worse than Dubai’s is just plain wrong because Dubai’s real estate market was built on pure speculation and China’s isn’t, “His remarks show a lack of understanding about Dubai and of China. Dubai's economy is built on real estate speculation, whereas China's is not. It is just part of the Chinese economy.”
Investors like Jim Rogers, Peter Schiff, President of Euro Pacific Capital, and Marc Faber, publisher of Gloom Doom Boom, have been cautious over the inflationary crisis that could occur in the United States and elsewhere because of the vast amounts of money being printed by governments all over the world.
“Whenever governments print a lot of money, you get inflation. That is the way the world has always worked. I am sure inflation is going to go to levels seen in the 1970s, if not higher. It is not necessarily going to happen this year, but certainly over the next few years. Governments around the world are going deeper and deeper into debt and this has got to be financed. Someone will have to pay higher rates eventually.”
The founder of Rogers Commodities Index added that interest rates have already gone up, even though the United States government is attempting to hold down interest and mortgage rates “but there is only so much they can do.”
Digital Journal also reported last week that Rogers believes a food shortage will occur within the next few years, which will force commodities to spike in prices. Once again, he reiterated his sentiments that he is investing primarily in commodities, “My investments have been mainly in commodities because if the world economy improves there are going to be shortages. If it doesn't improve, commodities are still the place to be in, as they (governments) are printing so much money.”
Rogers concluded that the pending economic crisis in the United State could force China to take over as the next economic superpower and that it basically mimics the situation in the 1920s and 1930s as the economic superiority shifted from the United Kingdom to the United States.
Nevertheless, if China does become the next economic superpower then, says Rogers, it will have done something no other nation has done before, “Great Britain was great once, Egypt also once and Rome once too, but China will have done it four of five times. After 300 years of decline everything is coming together for China in the 21st century.”
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