[Namsan Ddalggakbari] Jim Rogers' Post-Corona Crisis Warning

Global Economic Lockdown Policies Likely to Cause Greater Damage
Excessive Currency Printing... Excessive Liquidity
Will Result in Overborrowing and Inflation
Liquidity-Driven Market Overheating Leads to Crash
Bubble Market Collapse Could Happen Anytime

[Asia Economy Reporter Naju-seok] The world remains in chaos amid the COVID-19 pandemic. Although the development and distribution of vaccines seem to offer a glimmer of hope, the path to restoring normalcy is still slow. Perhaps the world can no longer return to the way things were before. When the direction of the world is uncertain, we often seek the wisdom of sages. Jim Rogers, known as one of the world's top three investors, shares his thoughts on the worst recession of a lifetime in this "Era of Great Transformation."

Rogers predicted that recovery time would vary depending on the responses to COVID-19. He foresaw severe damage from the extreme "lockdown policies" adopted by countries for quarantine purposes. He stated, "One thing is certain: we will never return to the previous era of prosperity," and predicted that the impact on countries that completely locked down their cities would be immeasurable going forward.

Rogers also expressed strong distrust in the policy responses of various countries. He pointed out that the response was essentially "doing nothing," arguing that measures like "lockdowns" led to worse outcomes. Of course, whether his judgment is correct is a matter for debate, especially since nearly 3 million people have died despite extreme measures worldwide. If "doing nothing" had been chosen, even more lives might have been lost. If one believes that "doing nothing" was better, it might mean that the cost of the measures taken by countries was judged to be greater than the loss of millions of lives.

For example, Rogers predicted that the global economy would face difficulties even after COVID-19. He anticipated a "double dip" despite vaccine distribution. He pointed out, "Ten years ago, companies that could not borrow from reputable financial institutions can now freely obtain loans from banks," adding, "Even companies in situations where they should never borrow can easily raise funds." The liquidity supply measures taken by countries in response to COVID-19 are now approaching the time when their costs must be paid.

Rogers forecasted that excessive liquidity supply would lead to overborrowing, overinvestment in facilities, and inflation driven by rising prices. He believed there is no world where printing money can continue forever.

He suggested that we might currently be in a bubble period. Central banks worldwide are printing large amounts of money, and liquidity is flooding the markets, sustaining a liquidity-driven market. He saw a high possibility of overheating due to vaccine distribution and other factors. The problem is that overheating will eventually lead to a market crash. Rogers explained, "Both skeptics of the overheated market and those who believe in the boom suffer great losses," elaborating as follows.

"A bubble market creates an 'OO boom.' For example, the 'Japanese stock boom' or the 'high-tech stock boom.' The first to suffer are those who do not believe in the boom. They short sell first and suffer devastating damage. Next, those who believe in the boom are wiped out. They ride the boom and lose everything at the peak of the overheated market. In other words, ultimately, everyone is wiped out."

Rogers also briefly mentioned Korea's future. He believed that if the Demilitarized Zone (DMZ) opens, opportunities will come to Korea. The potential is immense if North Korea's cheap labor is combined with South Korea's management capabilities and capital. However, the issue is that he discussed Korea's opportunities based on the premise of North Korea's reform and opening. Therefore, there remains room for interpretation regarding how highly he evaluates Korea as an investment destination. In the "Era of Great Transformation," Rogers also mentioned Iran and Russia alongside Korea as attractive countries.

It is important to note in advance that the "Era of Great Transformation" was written for Japanese readers. This explains the frequent advice directed at Japanese people. Many issues related to Japan, such as investment advice, tourism industry prospects, Japanese cuisine, immigration policies, and fiscal policies, are covered extensively.

Additionally, this book contains Rogers' reflections on various issues rather than a systematic presentation of future directions. While the introduction discusses the catastrophic consequences of inflation and a double dip, it offers a different analysis that the long-term future of the tourism industry is bright. The book reveals more of an investor's sensibility than a diachronic approach to the changing world due to COVID-19. It is difficult to find in-depth forecasts in this book. Depicting the world's future in this era of great transformation is left to the reader.

This content was produced with the assistance of AI translation services.