David Edwards
Renowned investor Jim Rogers, co-founder of the Quantum Fund alongside George Soros, has issued a dire warning about the economic risks posed by U.S. trade policies under President-elect Donald Trump’s “America First” agenda. In a recent interview with The Financial Chronicle, Rogers criticized trade restrictions targeting countries like China and India, arguing that such measures could destabilize the global economy and backfire on the United States.
“Mr. Trump’s ‘America First’ policy will hurt not just China, but the whole world. Trade regulations are not good for anybody. It is not good for the world and for his own country,” Rogers stated.
Rogers highlighted two pressing challenges for the U.S. economy: inflation and mounting national debt. While central banks continue to cut interest rates, he noted that inflation remains unresolved and could worsen in the context of a trade war. “The U.S. already has an economic problem, which includes inflation. Though central banks are cutting rates, the issue of inflation has not been resolved yet. It will come back with the trade war more aggressively,” he warned.
Rogers further predicted that missteps in addressing these issues could lead to a catastrophic economic downturn. “The U.S. has a huge debt. When Mr. Trump will try to solve economic problems, he will make mistakes, and that is bad for the world. It will affect the entire world, and we will see the biggest recession ever.”
Advocating Alternatives
Instead of restricting trade, Rogers urged the U.S. to focus on reducing spending and curbing its national debt. “America should work on cutting its spending and debt. It should not restrict trade with China, India, or any other country. Restrictions on trade will make the situation worse,” he advised.
Turning his attention to investment strategies during economic turbulence, Rogers emphasized the value of commodities such as gold as a hedge against uncertainty. “When turmoil comes, usually investors look for a safe haven … But the dollar is not a sound currency. In periods of recession, commodities like gold do well. People invest in commodities like gold to protect themselves,” he explained.
Track Record of Warnings
Jim Rogers has consistently sounded alarms about potential economic crises. In February 2018, he predicted that the next bear market could be “the worst in our lifetime.” More recently, in June 2023, he reiterated concerns about an economic downturn surpassing the severity of the 2008 financial crisis. His warnings often point to rising global debt, economic bubbles, and the diminishing role of the U.S. dollar as the world’s reserve currency, exacerbated by mounting U.S. debt and the increasing use of financial sanctions.
Rogers’ message serves as a cautionary tale for policymakers and investors, underscoring the importance of prudent fiscal management and the need for resilient investment strategies in the face of economic uncertainty.
