Why Jim Rogers is buying what everyone else is selling

What are you buying right now?

I am buying China, Japan, and Russia, all of which are Asian markets.

One reason I am not buying the U.S. is because the U.S. is making all-time highs. I prefer not to buy things making all-time highs. Japan is down 50% from its high, and Japanese Prime Minister Shinzō Abe said he will print unlimited amounts of money. He is doing things to make the market go up. He has also passed legislation to give tax incentives to invest in the stock market. He has persuaded the huge pension funds to buy more shares. Abe has done a lot of things that are good for stocks and the investment community.

I am not buying the currency USDJPY, +0.00% because he is running up huge debts and printing money, which is debasing the currency. In the short term, it’s good for investors. In the long term, it will ruin Japan. The population is declining, debt is going through the roof, and currencies are being destroyed. This is not good for Japan.

What about China?

China is the largest creditor nation and its stock market is 30% below its all-time high. The U.S. is the largest debtor nation in the history of the world and its stock market is at all-time highs.I don’t see a bubble in China yet, but if it keeps going up, it will turn into a bubble. Debt is building up in China internally that has never happened in decades. It will cause problems for them but it’s not at the tipping point yet. I hope there will be a significant correction so the market will return to a better level. It’s an incipient bubble.

What do you think of gold?

Gold GCQ5, +0.72% is in a correction, and the correction has gone on for four years. Although I am not buying gold, I am expecting an opportunity to buy gold sometime in the next year or two. For instance, if gold goes under $1,000, I hope I’m smart enough to buy a lot more gold.

When I say under $1,000, it’s not that I know what I’m doing, it’s just that typically 50% corrections are normal. Before this is over, gold is going to end in a bubble. In the past, when there are collapses of confidence in government or currencies, people flee to gold. Part of the problem is that many people consider gold to be holy. They are mystical about it. Some mystics are surprised that gold goes down at all. When the next problem comes, people will lose confidence in the government, central banks, and paper money. That’s when gold goes up the most. That’s also when the central banks will do anything to save the day.

What about Greece?

Greece is a sideshow that could turn into the main show because politicians keep making mistakes. What is best for Greece is to declare bankruptcy, stay in the euro, and start over. They will never be able to pay their debts. We’ve had states, cities, and counties go bankrupt, and they didn’t leave the U.S. They reorganized and started over. You don’t have to leave just because you go bankrupt. If Greece went bankrupt but stayed in the euro EURUSD, +0.0000% , we’d have a bit of a trauma but we’d move on. If they make Greece leave, it would turn into the main show.

Any final thoughts?

In 2008, we had a problem because debt was piled so high, but now the worldwide debt is much higher than it was then. In the U.S., the Fed’s balance sheet has gone up five or six times. Worldwide, all of these countries are talking about austerity, but they continue to run up higher and higher debt. Unfortunately, the world doesn’t have the luxury to lower interest rates much more. To pump up the stock market, all they can use is printed money. The next time around will be pretty horrible for all of us. I hope that you, your readers, and I survive.