Jim Rogers: We Need a Big Stock Pullback
By: Julie Crawshaw [link]
Commodities bull Jim Rogers says he’s still hoping for an old-fashioned selling climax, the kind where everybody says, “Get me out at any price, I never want to buy stocks again as long as I live.”
Unfortunately, Rogers complains, that hasn't happened because government bailouts keep getting in the way.
He also takes issue with economist Nouriel Roubini, who has suggested that regulators close markets for a week or two to give panicked investors a “time out” to recompose themselves.
That’s just crazy, says Rogers.
"The world is desperate for liquidity and you’re going to close the markets? That's totally insane,” Rogers told Bloomberg News.
“What you need is to let market clean itself out,” Rogers says. “Let them liquidate. Let the market start over.”
Rogers continues to be especially bullish on gold and agricultural commodities.
He says the United States and other Western economies are headed for an “inflationary nightmare” because policymakers “don’t know what they are doing.”
Roubini is not alone. Billionaire George Soros has predicted a hedge-fund bloodbath in which two-thirds of funds operating today would shut down.
Soros stopped short, however, of saying it would close stock markets.
Yet private equity investor Jon Moulton of Alchemy Partners believes a coming tidal wave of hedge fund collapses will force regulators to close markets at some point during the next three months, and for up to two weeks.
“We estimate 60 percent of the capacity of UK hedge funds will go this year, through bankruptcies and redemptions,” Moulton told the Business Times Online.
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