Jim Rogers, a top global investor and co-founder of the Quantum hedge fund, yesterday said he is skeptical about the reported improvement in the US job market and that the latest round of quantitative easing will not fix the US economy.
The US jobless rate dropped to 7.8 percent last month, the lowest since US President Barack Obama took office in January 2009, according to a report released on Friday by the US Department of Labor.
The labor agency also revised previous numbers to show the US economy created 86,000 more jobs in July and August than first estimated.
“I have learned not to take advice from the government, especially the US government, which frequently misleads its citizens,” Rogers said in a media briefing in Taipei.
There is an election coming in the US and the administration wants to win, he said, adding that most other institutes believe US unemployment remains worse than the official statistics suggest.
In its quarterly update of the World Economic Outlook, a survey of the global economy, the IMF yesterday raised the US’ growth forecast slightly to 2.2 percent this year from 2 percent, but put growth in the world’s largest economy at 2.1 percent next year, down from the 2.3 percent it had predicted in July.
Rogers, who is based in Singapore after selling his New York apartment in 2007, said that even if the reported drop in the US’ unemployment rate is true, it has nothing to do with the US Federal Reserve’s third round of quantitative easing that was initiated last month.
“Printing money has never worked [in stimulating economic recovery] throughout history,” he said. “Sometimes it worked in the short term, but it’s never worked in the medium or long term.”
Rogers cited Zimbabwe as an example, saying that if printing money could ameliorate debt, the cash-strapped African country would be a wild economic success. By early 2009, the Zimbabwean dollar was rendered effectively worthless as the government issued bills in denominations of up to 100 trillion dollars in a bid to rein in debt problems, which instead heightened inflation and poverty.
It is better to admit one’s mistakes and accept the reality of the situation so things could be improved once the worst part is over, he said.
Rogers, who believes Asia will drive the world economy in the future, said China is right in trying to slow its economy down for the past three years because of its inflation and property problems.
“It is the right thing to do [for China] as economic conditions in Japan and the West slow down,” he said.
Rogers has touted the value of investments in agriculture and precious metals, although he has been very clear that he feels silver is a much better investment than gold at the moment.
Rogers last visited Taipei in 2008 and met with President Ma Ying-jeou (馬英九) during both visits.
He said he did not settle in Taipei because the government insists on using traditional Chinese, whereas the rest of the world uses simplified Chinese.
“I want my children to grow up knowing what most other people know,” he said. “The Chinese language is going to be the most important language in my daughters’ lifetimes.”