Introduction
Jim Rogers grew up in Alabama and started out in business, aged six, selling peanuts and soft drinks at baseball games. He was educated at Yale and Balliol College, Oxford. After he co-founded the Quantum fund in 1970, the fund surged by 4,200% over the next decade, while the Standard & Poor’s index rose by 47%. Having earned enough money to “retire” at the age of 37, Rogers has since worked as a professor of finance at Columbia University, columnist, author, and a contrarian investor. In the early 1990s he traveled 100,000 miles through six continents on a BMW motorcycle and ended up with a portfolio of investments in some of the world’s most unexpected markets. In 1998 Rogers became bullish about commodities, predicting an enduring commodities rally and later launched the Rogers International Commodities Index. Believing that the future belongs to Asia, he sold his mansion house in New York’s Riverside Avenue in 2007 and now lives in Singapore, partly so that his two young daughters can learn Mandarin.
Why do you think capitalism appears to be working better in Asia than in Western democracies at the moment?
It is because in Asia they’re fresher at it and they haven’t yet had the chance to get corrupted and corroded. In China, they still call themselves Communists. They didn’t have a stock market 20 years ago, nor did Vietnam. Thirty years ago Mao Tse-tung was still running China; Indira Gandhi and Nehru were ruining India; East and West Pakistan had just had a big split; Vietnam had been destroyed by war. So, 30 years ago Asia was not in the game.
Is the current financial crisis a tipping point, with developed nations losing their status as financial centers and Asian centers taking over?
Yes, definitely. This is a period that we will look back on and say, “Oh, yes, that’s when it all really changed.” The money now is in Asia. The largest creditor nations in the world are China, Japan, South Korea, Taiwan, Singapore, and Saudi Arabia. Forty years ago none were in Asia. Experience tells us that; money is not dumb. It goes where the money already is; everybody follows the money. That’s why New York became the world’s financial center: because America had the money, the balance of trade, the reserves, and the economy. But America doesn’t have the money any more and nor does the United Kingdom.
If Asia is poised to take over as the world’s next financial center, which city do you think is going to be dominant?
No single financial center has emerged in Asia yet. Singapore and Hong Kong are working at it, and they both have a lot going for them. Hong Kong has a negative, which could turn out to be a positive, in that its neighbor is China. China has a blocked currency, so it cannot emerge yet. Seoul is saying that they want to become one, but they still have a host of unbelievable regulations, and even the Koreans themselves aren’t on top of these regulations. You can’t have a financial center without a free flow of capital. There’s no free flow of capital in South Korea right now.
Do you believe Singapore or Hong Kong more likely to emerge as Asia’s leading financial center?
I think it’ll be Singapore, at least in the medium term, because no one really knows what’s going to happen with Hong Kong and China. Dubai says it wants to, but Dubai is essentially a short-sell now. There’s also Tokyo. Over the last 40 years, Tokyo should have been emerging as a financial center. On paper it looks like it ought to be the world’s financial center. The trouble is that, for whatever reason, the Japanese just don’t want to open up to the outside world and keep doing ludicrous things, like having their interest rates at almost zero.
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