<a href=”http://www.numbersleuth.org/worlds-gold/”><img src=”http://www.numbersleuth.org/worlds-gold/gold.jpg” alt=”All The World’s Gold” width=”500″  border=”0″ /></a><br />From: <a href=”http://www.numbersleuth.org”>Number Sleuth</a>

To say that markets have been volatile in 2011 is an understatement. Uncertainty regarding the outcome of the ongoing European debt crisis continues to be the primary cause of market gyrations, yet other factors have come to bear as well, including the Arab Spring, the earthquake and reactor meltdown in Japan, monetary tightening and inflation in China, sovereign debt downgrades, and devastating floods in Thailand. In our opinion, all of these events have driven volatility, but not the overall market trend. We believe the overall market trend has been led by a push-pull relationship between the private sector trying to deleverage and the world government maintaining ultra-easy monetary and fiscal policy.

INTERNATIONAL. Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers has been talking about his 2012 predictions.

In a nutshell, he is neither too optimistic about the stock market for 2012 nor about what’s going to happen in the world in the next two or three years.

Speaking to Australia Financial News Network (AFNN) December 23, Rogers said: “The problems are going to continue to get worse until someone solves the basic underlying problem of too much spending and too much debt.”

He sees the biggest risk to global growth in 2012 as “too much debt…too much consumption…and the central bank in the US which keeps printing money.”

Rogers, seen as one of the world’s most successful investors, highlighted the scale of the problem to his host: The problem is that the measures America needs [to solve the crisis] would cause huge pain for a while, but, if we don’t take our pain now, and we wait until the market forces the pain on us, then it’s going to be systemic collapse.”

Refusing to get drawn into US politics, Rogers nevertheless provided a tacit endorsement: “Gary Johnson and Ron Paul seem to understand the problems that are facing America,” he said.

So what is his prediction for stock markets in 2012?

“I am short stocks around the world.  I’m short American technology stocks, I’m short emerging market stocks, and I’m short European stocks,” Rogers told AFNN.

“I’m not optimistic for the most part about stock markets.  I don’t own many stocks anywhere in the world.  The only offset for the caveat for me is that there is an election in the US, and in France, so wherever there are elections coming, and governments spend spend spend, and throw money out the window to buy votes, so some people are going to be much better off in 2012,” he added.

Speaking to the BBC‘s Martin Webber December 26, Rogers reiterated his opposition to printing money as a solution to too much spending and too much debt: ” You can debase currency, and history is replete with governments that have debased their own currency and ruined their own currency for hundreds of – well for thousands of years.”

“You can do that and everything is okay for a while, but eventually you have inflation, you have high interest rates, you have currency turmoil, you have people no longer trusting each other to invest with each other, and then you have the end of the system, and we have chaos, and it starts over again,” he added.

Social unrest, civil war and…a huge mess

Asked if it was right that government owned institutions [nationalized banks] were effectively buying government bonds, the investment guru said: “It is a recipe for disaster… It’s a Ponzi scheme, it’s a fraud, it’s a sham and we are all going to have to – we are already starting to pay for it.”

“Eventually one of two things has to happen. We have to get together now and ring-fence the problem and figure out how we are going to survive and start over. Or, in a year or two or three, the market is going to say, no more money, we won’t put up any more money. And then the whole system collapses, then you have gigantic chaos, social unrest, governments failing, civil war – huge mess,” Rogers predicted.

It’s not the euro

Going against mainstream investment thinking, Rogers denied this was a ‘euro crisis.’

“It’s not the euro. The world needs the euro or something like it to compete with the US dollar. We need another sound currency. The eurozone as a whole is not a big debtor nation. The eurozone has some debtor problems, some debtor nations, debtor states, but it’s not a big, big problem. The euro is good for the world. It needs to work,” he told the BBC.

But is it a euro crisis?

Rogers, nonetheless is having “serious questions” on what to do about the Euro.  “It certainly won’t continue in its current form in 10 years,” he told AFNN.

Monetary unions work by automatic transfers from productive regions to less productive ones. This is true in the US as it is true in every single nation with regional variations. No single currency has ever survived without some form of debt ‘mutualization’.
 
Only Germany can reverse the dynamic of a European decay,” billionaire investor George Soros wrote in August in Handelsblatt, the Dusseldorf-based newspaper. “Germany and other countries with an AAA rating have to approve some sort of Eurobond regime. Otherwise, the euro will implode.”

The eurozone, in its current form, is beyond repair. The euro was an idealistic idea dreamed up by politicians. The idea was flawed and could not have worked without swift fiscal and political union. Even Jacques Delors, the architect of the euro, accepted this fact in a recent interview with the Telegraph.

Bankers keep their Lamborghinis

Rogers also expressed limited sympathy for the Occupy Wall Street movement.

“I do have sympathy with the fact that they are saying, we shouldn’t have bailed out the banks. I would have let all those banks go bankrupt, as you’ve heard me say before, but beyond that, I don’t have too much sympathy with them” he told the BBC’s Webber.

“But beyond that I don’t have too much sympathy with them. You know, we all want a free lunch. I would like somebody to pay my bills too. I would like somebody to take care of me the rest of my life too,” Rogers added before launching into a rant:

“Listen it’s outrageous that the government took the money and saved the banks. Absolutely, they are right about that. It’s outrageous, totally outrageous that governments went and bailed out some banker so they could keep their Lamborghinis and their summerhouses”.

Occupy Wall Street has made it hard to ignore that the proportion of wealth amassed by a small elite in the United States has increased dramatically over the last three decades. Consider the following comparison.

Between 1975 and 2006, average family income grew 32.3% in the U.S., whereas it only grew 27.1% in France. When you remove the top 1% of earners from the calculation, however, the increase drops nearly by half in the U.S. (to 17.9%), and by less than one point in France (to 26.4%).

This means, incidentally, that the income of the American 1% grew by 1447.9% over that period—80 times more than the rest of the population. Few Americans realize or approve that the top 20% of earners hold over 80% of the nation’s wealth, while the bottom 40% hold only 0.3% of it.

Where the future is

“My children speak perfect Mandarin like a native… their future is in Asia, just as my future is in Asia.  Asia’s going to suffer… don’t get me wrong, when the largest two economies in the world, Europe and the US have problems, everybody’s going to suffer.  Asia will suffer less than the developed world,” Rogers told AFNN.

“If I were buying anything I’d be buying agricultural commodities,” he says.

“Going forward we’re going to have huge shortages of everything – including farmers – I think ag will be a great place for the next 10-20 years,” Rogers told CNBC yesterday.

“Yale did a study recently showing that investors made 300% more by putting money in commodities themselves rather than commodity stocks – that is unless you’re a great stock picker.”

About Jim Rogers

Jim Rogers has spent a career being one step ahead of mainstream investment thinking. Amongst his many accomplishments, Rogers was co-founder with George Soros of Quantum Fund. During his ten years with the fund, the portfolio gained more than 4,000%, while the S&P rose less than 50%.

Rogers retired from Quantum in 1980 and became a guest professor of finance at Columbia University Graduate School of Business and in 1989 and 1990, the moderator of The Dreyfus Roundtable, The Profit Motive with Jim Rogers, and a media commentator worldwide.

But ask Jim Rogers about his most important venture and he will answer without hesitation: fatherhood.

A Gift to My Children: A Father’s Lessons for Life and Investing (RandomHouse, 85 pages, US$16) is Jim Rogers’ love letter to his daughters, Happy and Baby Bee. Reminiscent of The Autobiography of Benjamin Franklin, which was also written by a father to his child, Rogers’ book is full of no-nonsense, unsentimental fatherly advice.

Among Jim Rogers’ best advice:

— Conduct your own research and trust your own judgment.
— Focus on what you yourself love.
— Be persistent.
— Broaden your horizons and see as much of the world as you can.
— The most important thing you can learn is how to think and question everything you hear.
— Study and learn from history.
— Master more than one language – and make sure one of them is Mandarin.
— Don’t panic.
— Take care of yourself and don’t neglect the sunscreen.

— Remember that boys need girls more than girls need boys.

Underscoring his convictions that future prosperity will come from China, Rogers’ two young children speak Mandarin.

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“He who does not bellow the truth when he knows the truth makes himself the accomplice of liars and forgers.” — Charles Peguy

If there’s been one overriding theme I’ve stressed from when I turned bullish on gold at just over $300 in the spring of 2003, it’s that the financial industry and most of those who report about it and the markets hate gold. I said it’s foolhardy to expect there ever to be a universally bullish view for gold, and that we should appreciate that there will always be forces whose desire is for gold’s price to be suppressed, lower than where it would be in a free market. Ironically, those who support such price suppression are the ones who call people like me and the good people at GATA tin-foil hat wearers, fanatics, or worse.
While most of those who may be bearish on gold now or have been so recently are legitimate forecasters who just see the cup as half empty versus my view of half full, there is one human being (as a Christian, I’m desperately trying to remember that we’re all God’s children, even though this person makes me think that God must experiment at times or at least have a good sense of humor) whom I have called the Tokyo Rose of Gold Forecasters and who has not only had the worst track record since the mother of all gold bull markets began about a decade ago but who also twists facts and tries to change his own history to conceal that he has been anything but bullish and that he has missed the greatest run in gold’s history. I’m speaking of Kitco gold market analyst Jon Nadler.
A few weeks ago, I issued this challenge:
http://www.grandich.com/2011/12/a-million-reasons-why-i-love-gold
While newsletter writer Dennis Gartman took the high road when I criticized him and we actually became friends over it (although I won’t challenge him to a round of golf at his own country club), Mr. Nadler once again tucked his head between his legs and resorted to twisting and turning in hopes that his past comments and predictions never received scrutiny. To see how delusional he becomes, one has only to read his December 15 comment to Marketwatch –
“… Nadler said he doesn’t make gold forecasts and has, for three decades or more, consistently advised a core 10% gold holding for anyone with assets worth protecting — a higher percentage of gold ownership than mainstream financial advisors generally recommend. “I merely try to point out that not all opinion about gold is wildly bullish and that should serve to put things into perspective for tempted investors” –
and compare it to what he really has said in his commentaries. To claim that he has always argued for a significant gold holding and to suggest that he was on the same side as those of us who predicted that gold would rise more than 500 percent but merely tried to temper excessive enthusiasm was as devoid of fact as it was when Baghdad Bob said Iraq was defeating the invading allies. Mr. Nadler has constantly used his daily column as a sounding board against higher gold prices and repeated as many negative comments about gold as he could find.
There have been others who have seen Mr. Nadler for what he is, and, more importantly, for what he isn’t as noted below:

•    http://www.buygoldco.com/nadler-bearish/
•    http://www.youtube.com/watch?v=Ghm3xAPYgSo
•    http://www.tomaveni.com/Commentary/Nadler-01.htm
•    http://seekingalpha.com/article/266717-how-reuters-dropped-the-ball-on-gold-story
•    http://www.hardassetsinvestor.com/interviews/1836-jon-nadler-gold-not-in-bull-market.html
•    http://www.youtube.com/watch?v=KnftNNaV76o
•    http://www.commodityonline.com/news/gold-might-fall-to-$500s-jon-nadler-12397-3-1.html
•    http://drschoon.com/articles%5CGoldBearsPredictingThePriceOfGold.pdf
Unfortunately, many in the news media never ask why Nadler has been so wrong for so long.
Mr. Nadler again misstated the facts in his December 29 column:
“… Bullion spot bid prices thus touched the $1,521 level and brought into question the subject of whether or not the $1,500 pivot point might be able to hold up against the swollen tide of liquidations. Just weeks ago, some were willing to bet their life’s savings on the belief that gold would not reach such a number — certainly not before printing a $2K record into the logbooks. Today the precious metal came to within $22 of touching that ‘Unholy Grail.’ Ooops. If and when $1,500 happens, we might suggest making a donation to charity, as a nice gesture of contrition.”
But the bet I offered Mr. Nadler was not for anyone’s “life savings” but for a million dollars, and it did not include a $1,500 downside target price for gold but rather a price of $1,000.
He did this sort of thing a few years ago when I offered him a $50,000 bet and challenged him to debate me. He declined even after Canada’s most-watched financial television network offered to host such a debate. You would think that he could have used such an audience to debunk me and those like me he disparages.
Enough is enough.
I hereby challenge Mr. Nadler again, this time raising my wager to $2 million — still not anyone’s “life savings.” I’ll increase the bet’s target price by $100: that gold will see $2,100 before $1,000. The winnings are to be donated to charity.
It’s a shame that someone can continue to be so wrong without being questioned. When Mr. Nadler resorts to misrepresenting me, it’s time for him to put up or shut up.
If Mr. Nadler’s forecasts have been so profitable to him and his readers, why wouldn’t he accept this challenge?
I have arranged for the law firm of Lomurro, Davison, Eastman & Munoz of Freehold, New Jersey, to hold the wagered funds in trust. My offer to Nadler is good until 12:01 a.m. ET January 9, 2012. And since my side of the wager is derived from my personal funds, Mr. Nadler’s $2 million match to my wager shall also be certified as deriving from his personal funds or funds derived from the assets of his immediate family.
Additionally, I announce that I’ll assign my winnings to the many charities I’m involved with, including but not limited to:
•    Ashley Lauren Association
•    Operation Warm
•    Fealgood Foundation
•    Athletes in Action
•    Fellowship of Christian Athletes
•    Good News International
•    James Volpe Foundation
My views on gold remain the same. The mother of all gold bull markets continues and, after the current correction, it shall once again bloody those bears who stand in its way as it rises to a new, all-time real high within the next 24 months.
 
About Peter Grandich
Founder, Grandich Publications, LLC. and Grandich.com
home of the internationally-followed blog, The Grandich Letter
Founder, Trinity Financial Sports & Entertainment Management Co., LLC
Though he never finished high school, Peter Grandich entered Wall Street in the mid-1980s with no formal education or training and within three years was appointed Vice President of Investment Strategy for a leading New York Stock Exchange member firm. He would go on to hold positions as a Market Strategist, portfolio manager for four hedgefunds and a mutual fund that bared his name.
His abilities has resulted in hundreds of media interviews including GMA, Neil Cavuto’s Your World on Fox News, The Kudlow Report on CNBC, Wall Street Journal, Barron’s, Financial Post, Globe and Mail, US News & World Report, New York Times, Business Week, MarketWatch, Business News Network and dozens more. He’s spoken at investment conferences around the globe, edited numerous investment newsletters, and is one of the more sought after commentators.
Grandich is the founder of Grandich.com and Grandich Publications, LLC, and is editor of The Grandich Letter which was first published in 1984. On his internationally-followed blog, he comments daily about the world’s economies and financial markets and posts his views on social and political topics.  He also blogs about a variety of timely subjects of general interest and interweaves his unique brand of humor and every-man “Grandichism” expressions with his experience gained from more than 25 years in and around Wall Street. The result is an insightful and intuitive look at business, finances and the world, set in a vernacular that just about anyone can understand. In his first year, Grandich’s wildly-popular blog had more than one million views. Grandich also provides a variety of services to publicly-held corporations on a compensation basis.
He is the also the founder of Trinity Financial Sports & Entertainment Management Co. [www.TrinityFSEM.com], a firm with a Christian perspective which he started in 2001 with former NY Giant and two-time Super Bowl champion Lee Rouson.  The firm offers services to celebrities, athletes and average folks.  Peter Grandich is a member of the National Association of Christian Financial Consultants, and a long-standing member of The New York Society of Security Analysts and The Society of Quantitative Analysts.
Grandich is also very active in Christian sports ministries including the Fellowship of Christian Athletes and Athletes in Action.
He resides in New Jersey with his wife Mary and daughter Tara