What´s your outlook for 2012?
Well, my outlook for Europe is more or less the same as the world. The worlds got some serious problems, and we´re probably not gonna see great economy for some time. There are problems in the U.S., problems in Europe, problems everywhere.
So any country will go bankrupt?
Well, for me some countries already are bankrupt. For instance, I mean Greece is already bankrupt. They haven´t dealt with it. They´re just pushing it further and further out into the future. But these countries are bankrupt. You´re going to see more problems of that sort. Whether they actually declare bankruptcy in 2012 I don´t know. There are a lot of elections in 2012 in America, France, other places, so I´m sure they?re gonna try to cover this up as long as they can. We are going to have more economic problems in the next two or three years, more bankruptcies in the financial sector, more bankruptcies in the government level in the U.S. and in Europe. Whether it?s 2012 or not I don´t know.
It seems next year is going to be much worse?
You´re definitely going to show big trouble ahead, and make sure you understand in the next few years you´re going to continue to see financial problems, and they´re going to be worse. The world had a problem in 2002, which was worse in 2008, in which the debt was so much higher. The next time around whether it´s 2012, or 13, or 14, I don´t know, it´s going to be much, much worse still but the amount of debt that´s very, very, very high. So the same as everybody the next time will be worse in America. America has had economic slowdown and recession every four to six years beginning with the republic, so we?re certainly overdue at the end of 2011, 12, 13, sometime.
What can you tell me about Spain?
And the next time America has a problem the world will have more of a problem, but the world doesn´t have many bullets left. I mean they cannot continue to increase the debt by staggering amounts of money which is just not possible, and we cannot print huge amounts of money anymore. So the next time around, Spain, Europe, America, the world, are all going to be badly affected with more bankruptcies. I don´t know exactly who, when or where. Spain is not in bad shape as some countries. Spain is in bad shape. They do have a new government which says they understand the problem and says they´re going to do something.
Will the euro survive?
Let?s hope it does and then Spain will not go bankrupt. Within ten years I don´t expect the euro to disappear because of elections and everybody´s going to try to keep things together. But certainly by the end of the decade, I do not expect to see the euro, certainly not in the actual form. But too many political problems, too many economic problems for it to survive as we know it and it may just disappear entirely.
What about next years presidential election?
You know 2013 if we last, if we make it to 2013, 2013 is going to be worse. There´s an election in America in 2012. The government is going to extend as much money as it can to win the election, and the people who get that money are going to be better off because there´s a government throws billions of dollars out into the economy. Somebody´s got to get that money. But those people and their friends are going to be better off. But the overall situation continues to get worse because the debt goes higher and higher and higher, and the rest of us ultimately are going to be worse off. And certainly by 2013 when all of that extra spending for the election stops, 2013 is definitely going to be a very bad year in the U.S. and in the world.
Do you own gold nowadays?
Well, I own gold. I wouldn´t buy gold right now. Gold is just ? gold has been up 11 years in a row, which is very, very unusual for any asset class. So it´s in the process of correcting at the moment. I would expect this direction to on for a while, and I would expect that there will be chances to buy gold lower in 2012.
So how we protect ourselves in this environment?
Well, I´m not selling my precious metals, my own precious metals. I´m just expecting them to continue to correct, and if they correct I´m going to buy more. The lower they´ll go the more I buy more and more. But I´m most optimistic about agriculture. Agriculture is extremely depressed on an annual basis. We have shortages of everything developing. Many farmers are very old. The average age of a farmer is 58. In Japan the average age of farmers is 66. In Australia the average age is 58. I mean we´ve had our share of serious, serious problems in agriculture very serious shortages developing. Agriculture is going to be one of the most exciting areas of the world economies in 10, 20, 30 years.
What about emerging markets?
First of all, you ask about emerging markets. I have to set them short stock of emerging markets such as India and other countries. I am not sure about Chinese shares. Some parts of the Chinese economy are going to have a hard life. The government in two or three years has been trying to pop the bubble in real estate. So anybody who doesn´t know that Chinese real estate is going to have problems shouldn?t be investing at all. They should probably just be reading the newspapers. China´s been doing their best for two or three years to slow things down in real estate. It´s going to happen. It is happening, and that will cause a hard landing in properties but the other parts of the Chinese economy are going to continue to boom. If you´re in water or agriculture or many other parts of the Chinese economy, you don´t care if a lot of real estate people in Shanghai are going bankrupt. You´re making too much money and you?re working too hard. So some parts of China will have a collapse. Some parts of China will not be affected at all.
Would you buy financial stocks?
Bank of America has been in trouble the last couple of years and will continue to be in trouble, yes. Bank of America´s made a lot of premature decisions in the past five, ten years, and now they should go bankrupt. I think American bank stocks are going to continue to have serious difficulty. The stocks are not going to do much. They may continue to trade in training ranges. They´ll go up down, up down, up down, but they´re not going to go anywhere for a long time. America made a really terrible mistake in finance in the past 20 years, we?re going to pay for them. Those stocks will not be a good place to be for a long time to come. I have sold short one large American bank.
I would not think about buying, unless somebody´s a good trader . I would not think about buying American banks including Bank of America. Now, again, it could trade from five to eight or five to ten. But as far as going up a lot it´s not going to happen with Bank of America or other bank stocks.
