October 14, 2011
The U.S. economy is likely to experience a period of stagflation worse than the 1970s, which would cause bond yields to spike, commodity bull Jim Rogers told CNBC on Friday. Rogers said governments were lying about the inflation problem and the recent rally in Treasurys was a bubble.
“As the inflation numbers get worse and as governments print more money and as governments have to issue many, many more bonds – somewhere along the line we get to the point when (bond prices) go down.”
Rogers view is at odds with others such as economist Nouriel Roubini who have been talking about a depression . Other economists have said the U.S. is experiencing a “balance sheet recession”, just as Japan did in the 1990s, and that means the U.S. risks a long period of falling prices and asset values.
In the case of Japan, despite massive monetary easing, government bond yields have continued to fall. On Friday, 10-year yields were close to just 1 percent. But Rogers is convinced that the U.S. experience will be different from Japan’s.
This article was posted: Friday, October 14, 2011 at 3:35 am