Jim Rogers, a successful hedge fund manager who was once partner with George Soros and amassed a 4,200% gain in 10 years, is predicting the downturn of the US economy. Last month, Rogers spoke with Bloomberg TV about his belief that it was a 100% certainty the US economy would enter a recession within the next 12 months.
While most analysts and businesses remain more optimistic in the recovery of the US economy, Rogers cited the historical trend in the US for recessions – namely, that they typically occur “every four to seven years for whatever reason”. Reinforcing his contention, he also noted that it has been nearly 8 years since the last recession, and since that time debt levels have escalated considerably.
Furthermore, Rogers contends the outlook for growth in the US economy is not as rosy as it would appear, with payroll tax data suggesting stagnation. Amongst catalysts, Rogers did not indicate any particular driver that was likely to prompt a recession, but did speak about the underlying concerns in macroeconomic growth that have kept markets on edge the last 12 months.
However, despite Rogers holding a negative outlook for the world’s biggest economy, he argues that the value of the USD may rise and formulate a bubble as other economies feel the implications of a slowdown, and markets are rattled across the world.
With an impressive history behind him, Rogers certainly has the experience and knowledge to sense an emerging trend in the market – whether this prediction eventuates however, remains to be seen. As a trader though, whatever happens, you don’t want to be caught off guard.