To prepare his own portfolio, Rogers says he is “shorting junk bonds and losing money.” When the day arrives that central banks’ house of cards finally collapse, he figures that the riskiest assets will get slam-dunked the worst. He is also starting to invest in the Russian stock market, particularly because it is the second most hated market in the world after Argentina.
One area of the U.S. economy that has bulls performing cartwheels is hydraulic fracturing, or fracking, business. Rogers is dubious. In the last two years, rig usage is down 75 percent while pumps are down 50 percent, he said. Besides, production from most oil shale wells tends to decline very rapidly after the first year or two.
“Even if the bulls are right, the folks in D.C. will spend the money faster than we can pump it,” he said.
Water remains a more attractive commodity, though Rogers added a caveat. “Don’t own it,” he warned. “Politicians will hang you in the public square. Find a way to transport, clean it or filtrate it and you will be a hero in the public square.”