I haven't seen any good Indian government for a long time: Jim Rogers...

http://economictimes.indiatimes.com/opinion/interviews/i-havent-seen...

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I haven't seen any good Indian government for a long time: Jim Rogers, US investor
By Biswajit Baruah, ET Bureau | 27 Jan, 2014, 08.53AM IST
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Recent opinion polls indicate Bharatiya Janata Party leader Narendra Modi is on way to become the next prime minister of India. Legendary American investor Jim Rogers says Modi can make a difference to the country, but adds quickly that no Indian politician has made things better in the last few decades. Rogers, who heads Rogers Holdings and Beeland Interests Inc, says any more tapering of the monetary stimulus programme by the US Federal Reserve can shake emerging markets, including India. In an interview with ET's Biswajit Baruah, the commodity guru talks about the direction global interest rates will take, and the sectors and commodities he is betting on in 2014. The general elections are just a few months away. Markets are betting on a pro-reform, pro-growth government at the Centre. As a foreign investor, how are you assessing the situation? Elections are good for the people of the country. One gets the option to get rid of those who did not perform well in their jobs. People generally get excited when there are elections, as this helps them to bring in new people with new blood and new ideas that will be favourable for the economy and the stock markets. Foreign fund houses such as Goldman Sachs and CLSA view Bharatiya Janata Party's prime ministerial candidate Narendra Modi to be a positive for the Indian stock markets. Do you also have the same view? I hope Narendra Modi brings some positive changes in India. People like him can make a difference, and there might be big stock market rally. But, in the last few decades, no Indian politician has made things better. The Indian currency is still not fully convertible, and it is very difficult for foreigners to invest in Indian financial markets. Though markets may rally for a while, I do not expect things to get better. The Aam Aadmi Party ( AAP) has banned foreign direct investment ( FDI) in retail in Delhi and has announced some populist measures. Do such political moves worry you? To eliminate or impose restrictions on foreign investments is not a good idea. India's neighbour Burma (Myanmar) was one of the richest countries in 1962 but it threw the foreigners out, and, this year, it is one of the poorest countries in Asia. This will not be good for India, if they are serious about it. I do not know people may elect these parties, but as a foreigner, I cannot tell whom to elect. The UPA government has announced a slew of reforms over the last one year. How successful, do you think, the government has been in implementing reforms? I have not seen any good Indian government for a long time, as India's debt situation continues to mount, higher inflationary pressure persists and balance of trade continues to get worse. I have not seen any politician making good decisions for the economy in a long time. With the US economy showing signs of a recovery, do you expect more tapering announcements from the Federal Reserve? The Federal Reserve will announce more tapering as the year goes ahead. I do not know the exact timing when they will start tapering again. The Federal Reserve thinks that the economy is doing better, and they can build some tapering. Eventually, the US markets and the world markets will go down a lot when the Federal Reserve gears up for tapering. Remember the people in Fed are just bureaucrats and academicians, they do not know much about the real financial world. When markets start falling on tapering, the Fed will get scared and start printing more money. All this is bad for the global economy, as printing of money has never worked in the long term.
"I hope Narendra Modi brings some positive changes in India. People like him can make a difference, and there might be big stock market rally."

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I haven't seen any good Indian government for a long time: Jim Rogers...

http://economictimes.indiatimes.com/opinion/interviews/i-havent-seen...

Most of the major central banks have announced stimulus packages to boost their economy. What are your concerns about this artificial liquidity? For the first time in recorded history, central banks of all major countries are printing money. There is a gigantic artificial ocean of liquidity, which is rising. We all are floating on the ocean of liquidity and thinking that the economic situation is getting better. Yes, things are getting better for the people who are actually getting money. But this process is building a lot of debt, which will eventually end. One should remember, it will be bad for all. The European markets have shown strong recovery over the past couple of quarters. Do you think the European economy is reviving strongly? The whole world including Europe is in a sea of liquidity. But I think the situation is better in Europe. Every country in Europe is going to have higher debt this year compared with last year. The situation is much worse not better. We feel good because there is an artificial sea of liquidity. But the underlying situation is getting worse all over the world.

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I haven't seen any good Indian government for a long time: Jim Rogers...

http://economictimes.indiatimes.com/opinion/interviews/i-havent-seen...

Do you think emerging markets including India can come under pressure when the Federal Reserve considers the second round of tapering later this year? The interest rates around the world are going higher. If the US considers further tapering, then, I think, global markets will eventually have to suffer. If you take this whole ocean of liquidity out of the financial markets, somebody is going to suffer. When the US starts tapering, the less developed markets will suffer first. The flows into emerging markets will come under pressure. Whether the Federal Reserve is going to taper for second time or third time, the markets around the world are going to suffer. What is your outlook on global interest rates? In which direction are they likely to move? The interest rates are going higher in most countries. Countries like Turkey, Indonesia and India had advantage of low interest rates. But these countries are going to suffer because the interest rates are going to be higher and there won't be any cheap money. Then China is also cooling off, there are many things happening around the world. The underlying situation is getting worse with interest rates going higher and printing of money. Which are the sectors you have considered to place your bets in 2014? I am bullish on agriculture, I am bullish on airlines. The Chinese government had said in late November that they are going to spend big money over the next 10-20 years in railroads and pollution control measures. Apart from China, there are many other countries that will spend in these sectors. Water is another sector where I am bullish. China, India, America all have water problems.

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