Jim Rogers: Recession Coming in 2013, 2014

Jim Rogers continues to reiterate his economic outlook going forward, which isn't a pretty one in his estimation, and he's surely right.

In an interview with Breakout, Rogers said about every 4 to 6 years America has gone through contraction and slowdowns since the beginning of the nation, and that isn't likely to change in light of the lack of results from endless simulating from central banks around the world, including the Federal Reserve in the U.S.

"Every four to six years since the beginning of the Republic we have had slowdowns in America," Rogers noted. "It's always happened and it's going to happen again."

Rogers said he sees 2013 and 2014 being difficult years, and recommends investors to plan accordingly.

In the third quarter in the United States, the growth rate was significantly downwardly revised from 1.7 percent to 1.3 percent, signaling things are already slowing down, with little to show that it will change any time soon.

Rogers said, "2013, 2014 you should be very worried and you should prepare yourself."

The global economy also looks weaker than anticipated as the International Monetary Fund (IMF) also downwardly revised its global economic growth numbers from 3.6 percent to 3.3 percent.

Some areas Rogers sees as important to invest in are gold and silver, as well as his main focus now: farmland. He recently invested in farmland in Australia, and continues to look for other farm assets to own.

Along with agriculture, which Rogers sees as being one of the top performers for years ahead because of the need to boost food production; saying that there is no more land being grown while the global population continues to rise.

Because of the turmoil in the markets, Rogers is long some currencies, including the U.S. dollar, which he has called a "flawed" currency in the past.

There he's investing in the U.S. dollar not because he sees it as being strong, but because he knows with the coming turmoil that investors will flock to it because of perceived safety. So he's investing in the U.S. dollar in relationship to the inevitable migration of capital there, which will push the value of it up in the short term in his estimation.

IMF's Lagarde Wants Less Austerity

With the need for even more austerity in Europe, along with the abandonment of Keynesianism and socialism, it's pathetic to see IMF Managing Director Christine Lagarde say that the austerity measures European officials are attempting to require in order for nations to receive aid - are "harsh."

The usual ignorance surrounding economics by Lagarde and others is evident in the ongoing idea that actually dealing with the unsustainable debt problem in a practical manner would result in it hurting nations like Greece and Spain, which continue to attempt to extract more money from the eurozone while doing very little to meaningfully cut back on debt and spending.

How does cutting back on government spending present problems for growth? It doesn't if your a market economy and embrace real capitalism (not crony capitalism).

But when the idea that government has a right to interfere in economies is part of the mix, it creates outrageous problems like the sovereign debt crisis now faced by Europe. To think that government spending actually has a positive, long-term effect on any economy is thinking from a day before the fall of the Soviet Union and socialism. To attempt to revive it through out of control government spending is doomed to failure, and calls for anemic austerity measures is a way to allow this failing economic dinosaur to last a little longer, while threatening to take down the eurozone with it.

Lagarde wants to have these irresponsible countries, including Portugal with Greece and Spain, to have another two years to deal with the problems. But since the reality is they have done little but talk austerity as the money keeps pouring into them, all that will do is result in the debt load of the countries climbing even more. The region simply doesn't have people with the courage to take the needed steps that would heal the damage done for the socialist, Keynesian cancer spreading across the eurozone.

No economic radiation or chemotherapy will help the situation, neither will cutting out the source of the cancer. It's too late, as the entire area has been infected with the financial cancer, and the patient will have to allow itself to die before any chance of recovery begins.

That's because there are none who have the will to take the needed steps to ensure a long-term economic health recovery to the countries there.

The idea that austerity measures are a risk rather than a long-term cure only shows the lunatics are running the asylum, and whether anyone takes the needed steps or not, the economic conditions will force them to be taken in one form or another in the not too distant future.

What will come out of that will be the final death of socialism and Keynesianism (other than a few deluded dreamers who will always adhere to the failed theories and systems), which could result in a gravitation towards real free markets and capitalism, which offer the only hope for long-term economic success for the world.

Greece Won't be Repaying Debt

For those who really understand what's happening in the euro zone, it isn't surprising in light of the visit by German Chancellor Angela Merkel to Greece, that it highlights the fact that Greece won't be repaying its debt anytime soon, which according to the IMF, will climb to an astounding 171 percent of gross domestic product (GDP) in 2012 and 182 percent in 2013. 

The IMF adds that Greece won't be able to pay the five-year debt reduction target that was the foundation behind receiving the $130 billion euro bailout. The original goal of cutting the debt level of the country to 120 percent of GDP by 2020 is now considered an impossibility by the IMF. It says the existing debt will now need to be restructured. Some economists saw this coming even before the bailout was put into effect, and many in Greece continue to demand that the austerity measures required to receive the money be, for the most part, rescinded.

 Talking to CNBC, former deputy minister of economy and finance, Peter Doukas, said, "The Greek debt is not repayable at this point. The economy is too weak to afford a 300 billion euro ($387.9 billion) plus debt." "Perhaps now isn't the best time to talk about it, but very soon we're going to have to talk about rescheduling of Greece's official debt. It simply isn't repayable," Doukas added.

 Doukas concluded, "There's going to be an official debt haircut or restructuring or rescheduling of sorts. My feeling is that it needs to go 15 years further in terms of maturity and a cutting of interest rates by at least 1.5 percent." Personal incomes have plunged by 25 percent in Greece, and unemployment among young people has soared to 55 percent.

 The question now is if Greece can in any way be trusted. The outrageous obsession by some in the euro zone to keep the failing and tenuous region together appears to at this time, be willing to be done at any cost.

But Greece and other economically failing states have exposed the soft underbelly of the agreement, and it's only a matter of time before some of these states are required to take real austerity measures in order to get their loans, or they'll be forced to go back to operating economically using their own currencies.

 At this time the will to save the European Union remains strong, and some leaders will continue to take the misguided and immoral steps to keep it together no matter who it hurts. That can only go on for so long before outrage from the productive workers and markets that are more free than the failing socialists governments weighing on economic Europe, rise up and rebel against those parasitical states that continue to drain the coffers of the region.

 Those wanting to use Europe as the stepping stone for a new world order know this could set them back for many years if it fails now. They are doing everything to ensure it doesn't, but the fallout from those efforts could trigger even more problems than the fall of the EU, euro and euro zone would bring.

At this time is appears it doesn't matter to those attempting to lead this attempt at a global coup.

Spain on Verge of Being Bailed Out

Spain moved one step closer to being bailed out after the German Parliament voted to allow the plan to go forward on Thursday, and then the finance ministers of the 17 member countries using the euro gave their approval to the terms offered in the bailout, which stands at an offer of just under $123 billion.

As usual in the news cycle, Europe's horrendous economic problems flow out of the eye of the public for a week or two before again appearing in the news, reminding everyone listening of the dire circumstances continuing to unfold there.

Reminders of the economic turmoil in the region hit the stock market, led by the banking stocks getting hammered, as they are the most vulnerable initially to such news.

The KBW bank index (.BKX) dropped 1.9 percent, ending the week down 2.3 percent. All the major American banks closed down on Friday.

Gold and silver on the other hand were able to finish slightly up on the day, as growing anticipation of another round of quantitative easing is slowly pushing the price of the two precious metals up even as bears attempt to pull them down.

There isn't enough conviction on either side of the trade to allow for major moves lately, and so both metals have been trading in a narrower range lately until more clarity emerges. The failing global economy will pressure the Federal Reserve, Ben Bernanke, and other central bank officials in certain parts of the world to take steps. It's only a matter of when, with each passing day of bad news gradually turning the sentiment in that regard.

Gold and silver should gradually move up until we're hit with the first big announcement. This one helps, but it'll take one more big push to send gold and silver prices soaring again. Most think it's likely to happen in the latter part of August, but it could easily happen earlier as negative economic news continues to mount.

One of the major obstacles for gold and silver is when announcements like this come out of Europe the euro takes a big hit against the U.S. dollar, keeping the prices temporarily in check. That happened again Friday when the euro dropped to about a two-year low against the U.S. dollar, falling as low as $1.2143.

For Spain, the 10-year bond soared to new highs as measured by the introduction of the euro, now bringing yields of 7.3 percent; a number experts see as unsustainable.

The Spanish government also slashed its economic growth projection, revealing the certainty Spain will continue to be in a recession at least through 2013, and quite probably beyond.

For the Spanish banks and the bailout money, there will be assessments of the needs of the banks in the country, and from their stress tests applied to guide the allocation of the funds. That should be completed sometime in September.

How much of the available funds that will be used by the Spanish won't be known until that time.

While the IMF has no administrative or official relationship to the funding proposal, it did say they are available to give "independent advice" concerning the bailouts of the Spanish banks, and if there are no objections, will publish reports concerning the progress the financial firms make toward recapitalization.

The reports won't point out any specific banks, but will focus on the overall progress of the banking industry in Spain.

United Nations Wants US Dollar Replaced, Control all Currency through IMF SDR's

A United Nations report today called for the removal of the U.S. dollar as the global reserve currency, to be replaced by special drawing rights (SDRs) from the International Monetary Fund.

It called for “abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.

“A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency,” the report added.

The conclusion of the United Nations was the new currency system shouldn't be based upon a basket of currencies, but SDR's which would be controlled by the IMF.

IMF: Global Economy At Risk - Contradicts Bernanke

Although his name wasn't mentioned, Ben Bernanke essentially received a rebuke from one official from the IMF, who said risks to the global economy have 'risen significantly.'

While it could be a coincidence, it's doubtful when taking into account it came a day after Bernanke's irresponsible comments that the U.S. economy is doing okay, although it'll take some time to recover strongly.

IMF deputy managing director, Naoyuki Shinohara, said this, “After nearly two years of global economic and financial upheaval, shockwaves are still being felt, as we have seen with recent developments in Europe and the resulting financial market volatility. The global outlook remains unusually uncertain and downside risks have risen significantly.”

So to say America is puttering along at a decent pace in light of this is ludicrous, and ultimately dishonest of Bernanke, who knows better, and is still trying to salvage his legacy, which is sure to be horrid for what he's done to the economy and debt load of the United States through his policies at the Federal Reserve.