Billionaire investor Jim Rogers has warned of a looming global stock market meltdown that could become the worst in his life as equities across major markets hit fresh records.
At an event in Hong Kong on Saturday, Rogers, dubbed “King of Commodities,” called the situation “highly unusual” and advised investors to be prepared.
It often signals that trouble is looming on the horizon when almost everyone in the world is turning a profit, Rogers said.
He pointed out that the world has a massive amount of debt, especially the United States, and when debt becomes overly accumulated, someone eventually has to pay the price.
The US investor, who said last year that he had sold off his US stock holdings, mentioned that he only holds Chinese and Uzbekistan stocks.
Rogers said he might offload the Chinese equities he holds as well to profit from the significant gains.
Despite warning of the mounting debt issue in the US, Rogers said he plans to move all his funds into US dollars as the majority of people globally still view the greenback as a safe-haven currency.
Therefore, when a crisis hits, capital tends to flood into the US dollar, further driving up its price, he said.
However, once the dollar becomes overvalued, one must consider where to redirect their funds next, he said, adding that the yuan could become one of the destinations if it becomes fully convertible in the future.
When asked how Hong Kong could weather this crisis, Rogers stated that when severe problems arise in the US, the entire world will be affected, including the SAR. He said investors can choose to hold cash or short stocks, but they must exercise extreme caution.
Regarding whether AI investments have become overheated, Rogers pointed out that many new technologies throughout history have formed bubbles – electricity, automobiles, and the aviation industry being no exceptions. While these technologies did ultimately change the world, the related investments still went through rapid stock price surges and subsequent bubble bursts, he said, adding that this pattern will happen again with AI.
Rogers also reiterated his bullish outlook on the long-term development of Asia and China. He believes that many European countries are grappling with massive debt and demographic issues, and that the global economic center of gravity will shift to Asia in the future.
He revealed that both of his daughters are learning Mandarin and urged parents to have their children learn Chinese, as he believes Mandarin will become incredibly important in the lives and careers of the next generation.
