The Long Crisis

Posts Tagged ‘Shift to Asia’

Jim Rogers is a famous investor who often engages in hyperbole in order to vividly make his point. He is listened to with interest by many investors as Rogers has made his billions by being right about major trends ands by backing his insights with large trading positions. Now living in Singapore Rogers has shifted much of his investment focus to Asia. There is a good reason for this as he explains in the following quote.

“Throughout history, the center of the world has shifted to where the capital is, where the assets are. You don’t see any period in history where things are shifting to the debtors, and America’s the largest debtor nation in the history of the world.

Unless somethings are different this time, unless the world’s changed very very dramatically, the center of the influence, the center of the power, the center of the earth, the center of the globe, is going to be shifting towards Asia, because that’s where all the money is. Have you ever heard of anybody saying, ‘Let’s go to where all of the debtors are’? It just doesn’t happen that way.”

No doubt that he is right about no good for America will come from being the largest debtor nation on the face of this earth. Not only is the federal government in debt far beyond its ability to work out of it without serious consequences but state governments as well as local governments are faced with a growing inability to service debt and to provide services.

California has long been considered a bellwether state in the US. The debt related crisis occurring in California now is likely a sign of what is soon to come in many parts of the US. And as Jim Rogers says who will say “Let’s go to where all of the debtors are”. That statement doesn’t mean just people but capital investment.

In the near future unless conditions drastically and miraculously change for the better the United States is going to have a very tough time raising capital at anywhere near a reasonable cost. Money tends to flow where it is treated best. The US government’s reaction to the financial crisis in the US via bailouts and constant interference in what used to be free markets based upon capitalism is not encouraging. Capital flows will increasingly be from the US to other markets.

As Jim Rogers states the center of the world is shifting to Asia. For additional Jim Rogers opinions and forecasts visit Seeking Alpha.

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