The law passed anyway, and many countries retaliated with their own tariffs. Exports and imports plunged by more than half. Many now blame the act as a major cause of the severity of the Great Depression.
The moral of the story? Don’t ignore the economists. They know what they’re talking about. Unfortunately, Rogers says, “Even if the economists say it’s wrong, the politicians will do it anyway.”
As a result, “a lot of what’s going on is because of the American government. They may wind up eliminating investment in America.”
The best approach to an ailing economy is a hands-off one, because if the government steps in and starts regulating, the effect will only be a temporary one that would eventually create an even bigger bull market.
“If you drive down the price of rice, farmers just won’t produce more rice, because it’s too cheap. Supply and demand will be worse than it is now,” Roger says.
He doesn’t foresee that things will improve with the next presidential administration, either.
“Neither of the candidates understands the dire straits the world is in,” he says. “No matter who wins, we’ll be worse off, unless you happen to be friends with or in cahoots with those who win.”
Living in Asia
Rogers left New York and moved his family to Singapore last year, based on his belief that Asia has a strong future ahead of it. He says Americans and the rest of the world need to let go of how they view some countries there – for example, a Vietnam ravaged by war or an India ruined by Indira Ghandi.
“That’s not Asia anymore,” he says.
He believes so much in the changes Asia is going through and the work ethic and dedication of its population that he’s raising his daughters to speak Mandarin Chinese, because he wants them to be prepared for life in the 21st century. Being there to witness these changes has only affirmed his view.
Rogers is known for making some bold predictions that have come to pass, including sounding the alarm a few years ago that America was headed for a recession. He’s got some predictions this time around, too, but it’s a just little good news and mostly bad news, at least in the short-term.
The good news? “No bull is indefinite.”
However… “The recession will probably last longer because the Central Bank is making big mistakes. I can’t believe how stupid they are.”
“I’m not terribly optimistic that it’s going to end anytime soon. We’ll have problems for awhile.”