Wondering what might lie ahead in 2012?  Check out this article, which details why the coming financial meltdown will be worse than 2008.  The author does a great job analyzing the European Union debt crisis, in particular.

Another month, another one of the PIIGS makes headlines for its impending financial meltdown.  (PIIGS stands for: Portugal, Italy, Ireland, Greece, Spain.)  This time it’s Italy, bumping Greece out of the news for the meantime.  The problem is, Italy’s situation is far more dire when viewed through the lens of the global economy.  The fact that Italy is Europe’s third largest economy alone would account for that fact, without even factoring in the growing strain all of these recent bailouts have placed on the EU.

Let’s back up for a second and see how we got here.

In general, the entire PIIGS crisis can be summed up with the following statement: the countries in question borrowed more money than they were making.  In slightly more technical terms, they borrowed too much relative to their Gross Domestic Product (GDP), to the extent that they are now unable (or having serious difficulty) meeting their fiscal obligations.

How did Italy get into this mess, specifically?  This article, titled “Italy’s Debt Crisis: Doomed by Corruption, Bloated Bureaucracy and Poor Productivity,” is a good primer on the basic reasons, and I’ll attempt to sum them up here:

1) First and foremost, perhaps as the general and foundational reason behind Italy’s woes, is the fact that it’s overspent by 1.9 trillion euro, or 120% of GDP.  

2) Corruption is widespread, with Italy’s Mafia accounting for nearly 16% of GDP.  (Obviously, this economic output isn’t necessarily optimized to aid the country’s growth.)  Tax evasion isn’t just limited to the criminals, as ordinary citizens have seemingly embraced it as a national pastime.

3) Bloated bureaucracy is an enormous cost unto itself.  Italy’s politicians earn 140,000 euro a year on average, and are driven around in executive cars (Audis, Maseratis, etc.) that cost the country 2 billion euro a year.

4) Italy’s education system is extremely poor, with only one of the world’s top 200 universities located in Italy (University of Bologna).  To underscore this, Italy’s unemployment rate for youth between the ages of 15 and 24 is a staggering 30%.

As you can see, many of Italy’s problems are systemic, and have gradually led the country into a worsening position financially.  The irresponsible government spending is really only the tip of the iceberg.

So where do things stand as of today?  Italy’s borrowing costs have rapidly increased over the last several weeks, hovering around 7% as of the writing of this article.  These government bond yields are a good yardstick for determining how unstable things have become, and it’s interesting to note that the other three EU nations that required bailouts (Greece, Portugal, Ireland) had also reached the pivotal 7% mark when they received emergency assistance.  These higher yields reflect investors' declining confidence that Italy can and will repay the debt.  Thus, they are seeking a higher premium for taking the risk of buying these bonds.

The outlook for Italian citizens is grim.  This past weekend, austerity measures were proposed that would result in a familiar combination of remedies -- spending cuts and tax increases – with the goal of balancing the budget by 2014.  Expect Italians to vehemently protest these measures.

External to Italy, I expect things to worsen significantly as we head into 2012.  The previous bailouts of EU nations have cost billions, and ultimately have done little to stem this contagion.  How much more money will the EU have to conjure up (read: print) in order to save Italy?  Not to mention the possibility of Spain and other countries requiring similar assistance in the near term.  

I cannot understate the severity of the aftershocks the collapse of Italy would cause for both the global economy and the US in particular.

Let’s walk through a possible vignette on how things could get ugly quickly if Italy goes down (keep in mind, this is a highly simplified example, and only one of many possibilities that could arise):  Italian bonds are bought and held by a wide variety of institutions around the world.  Let’s assume a host of Italian banks hold these bonds, and are informed by the Italian government that many of them will either only be paid back to a partial extent, or perhaps not paid back at all.  Several of these Italian banks would then presumably go insolvent, especially if they have high exposure to the bonds.  The same goes for other EU banks holding those bonds, as well as EU banks that had other types of holdings with the Italian banks that are suddenly failing.  Several of these EU banks would then go under, as well.  Here in the US, banks holding Italian debt, and/or invested in any way in the Italian and/or EU banks that are going insolvent, would also be subjected to potential insolvency.  As the EU collectively attempted to inject monetary assistance into the system, the very stress that cost would create would likely exacerbate the matter and trigger even more bank failures, insolvencies, and related bankruptcies. 

In other words, an enormous chain reaction would be set off.  If you think of the global economy as a massive series of interconnected/interdependent nodes, then you can begin to envision how the failure of several of those nodes begins to propagate negative consequences across the entire network.

This scenario would not be pretty for your investment portfolio.  Recent market perturbations and EU/PIIGS anxiety have already spooked the average investor, and this is just a taste of what’s to come.  Now is the time to review your portfolio and determine how much exposure you have to the kinds of systemic risks I’ve discussed here.  Gauge how high your risk tolerance is and then make defensive adjustments as necessary.  If you have extra cash, you might also consider betting that a collapse will occur, and invest in options or other high leverage instruments.  

Last week's jobs report, while not astoundingly good, was generally regarded as a good sign, as over 100,000 jobs were added in September.  The unemployment rate was listed as holding steady at 9.1%.  The purpose of this post is to clarify that unemployment figure.

The 9.1% refers to the number of people who actively sought/applied for a job in the given month, but did not secure one.  Thus, we can say that of every 10 Americans who can work, approximately one of them is looking for work and unable to find it.  That's bad enough, and one of the highest unemployment rates in recent memory.

But I don't think it's the most important figure being measured.  That one equates to 16.5% -- or the number of people out of work, including those who had sought work and/or have now given up, and are not counted as an "active" job seeker.  (This higher figure is also referred to as the "underemployment" rate.)  So with this number, we can say that if we brought 100 Americans into a room, about 16 of them would be out of the work force and/or not bothering any longer to get back into it.

That's a frighteningly high number.

Not surprisingly, the government doesn't advertise this number.  Obviously, they're incentivized to report the lower number, but it's done a disservice to the rest of us trying to grasp the scope of this problem and left most Americans unaware of how bad things have really gotten.

The next time the government releases these metrics (November 4), make sure to check the underemployment rate and not just the unemployment rate.

Last week, the Federal Reserve announced the next step it planned to take to intervene in the economy and attempt to aid in its recovery.  This step is called "Operation Twist."  I want to briefly discuss it here so you understand what's actually being referred to when you hear this term.

US Treasury bonds range from short term (such as 2 year notes, though there are even shorter terms than that) to long term (30 year Treasuries).  The bonds have price and yield characteristics that move opposite each other (picture a seesaw -- when a bond's price rises, its yield falls, and vice versa).  These characteristics can be plotted along what's called a "yield curve," which under normal circumstances, depicts low yield for short term bonds and high yield for longer term bonds.  The reason for this is, if you buy a short term bond, the duration of time over which you're risking your capital is brief, and therefore lower on the risk scale -- thus, you don't get much yield back for it.  On the other hand, if you risk your capital over a long period of time, say 30 years, you would normally be rewarded for it by receiving a higher yield.

That's under normal circumstances.  We are not operating under normal circumstances.

The Fed has already used various monetary policies to push down interest rates to the 0-0.25% range, which influences the rate at which banks lend to their customers (and which has resulted in historically low rates for borrowers today).  The problem is, there still isn't as much borrowing going on as the government/Fed would like.  The reasons for this are not the point of this article -- suffice it to say that borrowing remains below target.

Enter Operation Twist.  Picture that yield curve again, with the line sloping upward from the 2 year note to the 30 year bond.  If you could grab each end, like a dishrag, and twist it (like you were ringing it out), you'd flatten out that curve.  Yields on 2 year notes would rise; yields on 30 year bonds would fall.  That's the objective behind this policy move.

So how does the Fed accomplish this?  Simple.  The Fed has a certain number of 2 year notes on its balance sheet.  It sells them in the open market.  This increases the supply of 2 year notes, diluting demand and thus lowering the value/price of the notes.  As the price falls, yields rise.

With the money it receives from the sale of the 2 year notes, the Fed enters the 30 year bond market and buys those Treasuries.  As it buys them, supply drops, increasing demand and thus increasing the value/price of those bonds.  As the 30 year prices rise, their yields fall.

Ultimately, as the 30 year bond yield falls, the eventual interest rate you or I might receive on a 30 year loan (read: mortgage) should fall, as well.  At least that's the hypothesis.  Whether banks actually lower the rates any further than they already have (as opposed to just pocketing the wider margin), remains to be seen.

But in the abstract, what does all this really signify?

Desperation.

The government, using the instrument of the Fed, is desperate to juice the economy, by stimulating more borrowing and consumption on the part of the consumer.  Specifically, juicing the housing market has all kinds of (temporary) positive effects on the economy, since so many industries benefit from home construction/remodeling/etc.  Of course, I'd thought we'd already found out in 2007-09 what happens when a housing bubble bursts...but hey let's face it, we don't learn lessons too well around here.

The key point is to see past the fancy jargon and terms of reference that the government and the Fed will throw at you, which only serves to obscure the often negative reality involved, and to understand what is actually happening and how it affects you.

As our economy continues to struggle, with both parties in our political structure pointing the finger back and forth, I thought it might be helpful to dredge up an old article I wrote back during the 2008 Presidential campaign season (located on my previous blog, "Austrian School"), titled "Your Presidential Candidate Doesn't Matter (Subtitle: You'll Be Worse off Economically in 2016 No Matter Who Gets Elected)."

Now, I hate to jump the gun by five years, but I'm starting to feel like I was more right than I even imagined in the first place.  I suspect that if you had read this article of mine when it was first published, at the very least you were a bit skeptical...but now here we are, worse off than we were then, and all signs pointing downward.

While I encourage you to read the whole article, I did want to share and comment on a couple of excerpts here.  To begin:

To quickly summarize: when inflationary policies are instituted, and money is created out of nothing, that money flows to entities that can utilize it before its price-raising effects seep into the larger economy. These entities (investment banks, corporations, the wealthy) can invest it or capitalize it in a fashion that is advantageous to them, such as by investing in real estate, stocks, derivative investments (options, collateralized debt obligations), or anything else for that matter. Then when the added money trickles down to the consumer (read: you and I), we are left with one thing: higher prices. Less purchasing power. Smaller paychecks. Whatever you want to call it, it's not good.

I like this paragraph because it captures, in essence, this prescription we've received of more government borrowing/money printing/spending (through Quantitative Easing I [February 2009], Quantitative Easing II [November 2010], and Operation Twist [September 2011]), which so many of us take for the beginnings of an economic recovery.  Unfortunately, it is actually the poison that will eventually do us in.  It LOOKS good -- "Great! The government is actually doing something, they're helping us out."  It SOUNDS good -- "This government spending will create more construction/infrastructure/etc jobs."  It FEELS good -- "We've GOT to do something, we can't just do nothing."

But it is NOT good, and it will turn out very badly as time goes by.  Briefly said, it will ultimately achieve only the following:

1) Add to the national debt, burdening us with increasing interest payments over time in order to service that debt.
2) Contribute to devaluation of the currency, weakening the value of each dollar, lowering our purchasing power, and leading to a lower standard of living.
3) Crowd out more jobs than it creates; for every job created by the government, the fact that it had to borrow/spend to create it destroys 1+X jobs (we'll never know what the X is).

I also wanted to highlight this excerpt, the closing paragraph of the August 2008 article:

Allow me to proclaim with even more emphasis the following: no matter who becomes President - Barack Obama or John McCain - your economic situation will be worse after the presumptive two terms that individual will serve. By worse, I mean some combination of the following conditions: less home equity, devalued investments in stocks and bonds, lower purchasing power, less available savings, more reliance on credit to buy the essentials, you name it. It won't be pleasant.

Gloom and doom.  Yeah, I know everyone is tired of it, but it's way past the time to face facts.  The government does not have a shred of a clue how to fix the economy, aside from their misguided appropriation of our wealth and the subsequent redistribution of it.  And we see where that has gotten us today.

Actually, it's got to be somewhat unnerving for those who have put so much faith in the government's ability to aid an economic recovery, to see the ineffectiveness of these policies.  I honestly don't know how anyone could actually believe at this point that the government has a viable approach for fixing the problem.  Every policy has failed, and indeed has worsened the conditions under which we're subjected to economically (rising inflation, higher national debt, etc.).

I hate to say it, but at this point in looking ahead to the 2012 election, it really matters not who ends up President.  There is no political will nor ability to compromise on the big issues and problems to suggest that the economy will once again prosper and thrive.  The election season and campaigns will roll on with theatrical flourish, and you and I will continue to witness a declining standard of living.

Followers of this website know that along with Nassim Taleb, Peter Schiff is the other market and investing guru that I follow closely and have a deep respect for -- and so you wouldn’t be too surprised how happy I was to hear that he was given an opportunity to testify before Congress on the current economic conditions.  The testimony occurred back on September 13, and you can watch part 1 and part 2 of his testimony on YouTube.

Basically, Schiff sticks right to the same message that he’s been touting for years, and that he used as a platform for his unsuccessful Senate run in 2010.  The major points you’ll hear in the testimony:

-- The government is a net destroyer of jobs.  For every job we see created in the tangible sense, we have no way of estimating how many jobs were destroyed or stopped from being created due to the burden of higher government spending, debt, taxes, regulation and overall intrusion into the economy.

-- Stimulating the economy with more borrowed or printed money does not make for an economic recovery; rather, it lays the foundation for greater economic pain down the road, by acting as a “sedative” that delays the necessary corrective forces in the market, thus exacerbating them when they finally run their course.

-- Speaking as a businessman (Schiff owns and runs Euro Pacific Capital), he emphasizes the fact that he has been discouraged from hiring new workers due to the high-tax, high-regulation environment our economy is subjected to.  Schiff goes so far as to point out that he has now resorted to opening new offices/branches overseas (he mentions Singapore and the Caribbean) in order to escape the tax and regulatory burden here in the States.  Effectively, these are jobs the government has driven out of the country through various misguided laws and policies.

Of course, these are just a few high points from the testimony.  If you enjoy following Schiff, or want to hear an alternative argument as to how to truly stimulate the economy as opposed to the ones consistently put forth by the government, then I recommend you take a look at the video clips contained in this post.

Before you read this post, read this article here.

So the question is, did you end up like the turkey over these last two weeks or so?

It's really incredible when you step back a moment and look at what the market has done since late July.  Consider the following:

-- Starting July 22 (a Friday) through today (August 11), the Dow Jones has gone down 11 of the 15 trading days in that time frame.

-- The Dow has declined 12.5% since July 21's point (12,724) to today (11,143).  Whether the market can hang on to today's sizable gains (+412) remains to be seen in this volatile environment, so we could easily head lower than 11,143.

-- In the last 15 trading days, we've seen three days of triple digit declines: Aug 4 (-513), Aug 8 (-635), and Aug 10 (-520).  Experiencing even one of these kinds of days would be considered a rare event, much less three in a span of five trading days.

Many people went into July 22 thinking they had a "conservative" or "moderate risk" portfolio.  After 12.5% (or higher) losses, many of those same individuals now realize they had high risk portfolios all along.  The problem is, no one told them that when their portfolios were constructed.

Worse yet, a good number of these individuals were planning on living off of these investments within the next couple years.  Undoubtedly, those plans have now been delayed, perhaps for some time as the economy and markets struggle to find their footing.

Isn't it funny how the market can take 12.5%+ from your portfolio in a matter of a few days, but it never seems to put 12.5% into your portfolio in a matter of a few days?  Of course, I'm sure you've heard it a million times before, but it bears repeating: once you lose 12.5% you have to make back an even greater percentage just to get back to even.  This often equates to needing a couple of years to earn back what's lost in a couple of days.  To me, that sounds like a very high risk proposition.

This is exactly why Nassim Taleb, author of the "The Black Swan: The Impact of the Highly Improbable" advocates a "barbell strategy" approach for the individual investor's portfolio.  In short, instead of trying to construct a medium risk or conservative portfolio, one should split their assets into an 80/20 allocation: 80% in extremely safe (relatively speaking) instruments like CDs, money markets, or cash; and 20% in very high risk investments such as options (or other securities that have a high payoff potential).  Of course, this 80/20 mix can be tailored for what fits you best, but the general principle remains the same.

Again, think of the markets the way the turkey should think of Thanksgiving.  Given that premise, if you have any flexibility at all, take a closer look at how you can construct a portfolio that is more robust to these market fluctuations and perhaps even benefits from them.  Click on the Black Swan or Nassim Taleb categories in the right hand column to read more about this subject.

“Printing money doesn’t deliver a triple-A rating.” -- David Beers, S&P Head of Sovereign Ratings

So the inevitable finally occurred this weekend -- Standard & Poor’s (S&P), one of the the three major credit rating agencies, downgraded the United States’ AAA rating to AA+.  Since the decision was announced, there’s been much wailing and gnashing of teeth at the audacity of S&P for insinuating the US should no longer hold the highest rating possible.  “How dare they” has pretty much been the refrain the last couple of days.

I say, what took them so long?  I mean, let’s face it -- the long term fiscal outlook for the US is awful, simply put.  Consider the following:

-- There’s virtually zero chance the US will ever pay back a single dime on the principal it owes on the national debt.  If I told you I had a couple of credit cards, I max them out all the time, and I never do anything but make the minimum interest payments every month and never pay into the balance, how eager would you be to lend money to me?  Probably not so much.

-- The US has $14 trillion of debt today, but this doesn’t take into account the trillions more coming due at the end of this decade and beyond for all the entitlement programs (Medicare, Medicaid, Social Security).  (I’ve read everything from approximately $50 trillion to over $200 trillion as the total cost of these programs.)  If the Congress and President can barely agree on how to cut $2 trillion (as part of the debt ceiling deal), then what are the chances they can deal with these enormous long term debt obligations?

-- The US economy is headed in the wrong direction, and perhaps permanently so.  The option of growing our way out of the debt problem, by being more productive and increasing the nation’s Gross Domestic Product (GDP), is looking more and more like a pipe dream.  Job growth is stagnant, with nearly one out of every two unemployed persons out of work for six months or more, and the eventual need to raise taxes will stifle job growth even more as businesses retrench.  Since our “productivity” relies heavily on consumer spending, a slowing economy and more limited borrowing ability (as a result of the credit downgrade) will further hamper any rise in GDP.  As GDP remains level and debts rise, our overall debt-to-GDP ratio will soar, a key aspect of the S&P decision.

To back up for a second, it’s important to understand what S&P is actually rating.  The grade they assign indicates the likelihood that the entity issuing the debt will pay back the obligation. At the same time, the rating tells the debt purchaser how much risk it is assuming in the transaction.  So the rating is intended to synopsize the long-term debt outlook for the entity being rated.  As the rating declines, debt purchasers can demand higher yields (interest rates) on the debt in order to compensate for the higher risk associated with the debt issuer, thus making it costlier for the issuer to borrow money.

What does this all mean to us as individuals in the US economy?  Well, as the US government’s borrowing costs rise, banks will raise their interest rates commensurately to keep up with the trend.  When banks raise their rates, this will affect everything from mortgages, to school loans, credit cards, personal loans, car loans and so forth.  You will eventually pay more interest to borrow money compared to today.

The credit downgrade signifies a sad day in our country’s history.  Once a great economic power, we’re now left in a position where our debt instruments are no longer considered the safest available.  We held that status for 94 years (since 1917), and never held a rating below AAA -- until now.   Some will have the urge to blame this development on the President, or his predecessor, or this Congress -- but the bottom line is the problem has been fomented over numerous decades.  Only now are we seeing a symbolic representation of this decay in our fiscal position as a nation.

Unfortunately, it probably won’t stop here.  With our long term debt outlook deteriorating year over year, S&P has indicated more downgrades may be coming.  With our debt-to-GDP ratio  projected to hit 101% ten years from now, such a development would warrant another downgrade, this time to AA status.

The best advice I could give right now is to liquidate as much debt as possible, as quickly as possible (assuming you have any).  While the downgrade’s effects could take years, you won’t be able to time when those effects hit, so you need to be protected well in advance.  In addition, as always, review your portfolios for exposure to assets that would most likely be weakened by the downgrade, such as the US dollar and US Treasury bonds, and hedge or short (bet against) these positions appropriately.  Again, the effects won’t come overnight, so you have to decide when the timing works best for you and your particular situation.

What are your thoughts on the downgrade?  Please leave a comment below or contact me directly.

The US housing market is generally regarded as the proverbial stack of dynamite waiting to further blow up an already troubled economy.  Examining the details behind why that's the case is always eye-opening, and today's article from Barron's magazine titled “The Next Mortgage Bombshell” (appearing on Yahoo Finance) was difficult to stomach.  Reading this kind of material makes one wonder how the inevitable will ultimately affect our economy and the markets.  The bottom line conclusion is, it can't and won’t be good, no matter how you slice it.

Before I get into specifics about the article and some of the more harrowing data points it exposes, it's important to step back a moment and put the housing market troubles in context.  Since the first wave of mortgage meltdowns subsided in 2009, the economy appeared to steady itself for a while, as the stock market soared beginning in March 2009 and only recently began to stumble.  After this 2-year relative period of calm, the overall macroeconomic outlook once again appears bleak, with gloomy data rolling in on everything from manufacturing, to unemployment, to growing inflation.

Eerily, this is all occurring without any significant spike in the mortgage mess.  (Admittedly, moribund home sales figures and new housing starts have probably contributed to the overall economic malaise.)  The fact that the economy has begun sputtering again, without the next major meltdown in housing even occurring yet, bodes very badly for what lies ahead.  The next wave of foreclosures and mortgage defaults has sweeping implications, on everything from bank sector strength, to consumer spending (people will retrench and ratchet up savings as their home equity dwindles), retail sales (people will be buying less), and unemployment (numerous industries are tied to the housing industry and will lay off workers).

“The Next Mortgage Bombshell” focuses on the three major private mortgage insurance (PMI)  companies -- MGIC Investment, Radian Group, and PMI Group -- and the challenges they face as mortgage defaults continue to mount.  Private mortgage insurance allows individual homebuyers to purchase homes without the traditional 20% down payment.  The insurer covers the first 25% of the loan as well as interest accrued.  MGIC, Radian, and PMI Group are all beginning to reveal signs of being unprepared for the growing number of foreclosures, and need for external relief in the form of government aid (read: taxpayer bailout) is all but guaranteed.  

All that said, consider these stark realities as discussed in the Barron's article:

-- All three PMI companies’ stocks were valued at $50 or above in 2007; all of them now trade under $7 a share.  This drop represents a serious loss of shareholder equity.

-- Triad, a fourth PMI insurer, is currently paying only 60 cents on the dollar for its claims, deferring the other 40 cents to IOUs.  Clearly, the company underestimated the required reserves for covering its claims, and it’s doubtful they’re the only ones who guessed too low.

-- In Radian’s portfolio, 52% of its loans are past due for at least the last 12 months, as compared to the usual 10-20% in prior years.  (The other two companies are nearly as worse off.)  The longer the past due period, the closer the loan is to foreclosure.

-- MGIC, Radian and PMI Group have established reserves totaling 51%, 44% and 43% respectively of the expected loss claims coming their way.  To say they’re unprepared for the onslaught of defaults would be an understatement.

All of this underscores the ridiculously high premium that was and continues to be placed on homeownership in America.  The “American dream” misnomer/fantasy -- encouraged and manufactured by the housing industry, banking sector and the government -- has warped into the “American nightmare” for millions of homeowners who were simply unprepared for the financial shock of a precipitous drop in home value and loss of equity.  The concept of homeownership needs to once again embrace basic financial principles, such as the 20% down payment and mortgage payments of 25% or less of household budget.  Unfortunately, as our standard of living declines, fewer and fewer Americans will be able to afford these kinds of figures -- until home prices fall to levels that are once again affordable and aligned with personal incomes.  This process, whereby the market will reshape home prices and dictate new supply and demand characteristics, is a painful yet necessary reality we must now face.  We are at the beginning of that process now, with a long way to go.

One of my favorite market pundits to follow and keep track of is Jim Rogers.  Rogers partnered with George Soros to form the Quantum Fund in the 1970s, and enjoyed a large measure of success from this endeavor.  Rogers continued to grow his wealth largely through the commodities markets, and established another fund in 1998 called the Rogers International Commodities Index, or RICI for short.  He's an extremely successful investor worthy of your attention.

Anyway, Rogers has written a bunch of books, on everything from his trip around the world in a custom Mercedes, to investing in China, and commodities investing.  I've read some of these books and enjoyed them, but perhaps most of all I enjoy seeing Jim Rogers get on TV and level no-nonsense, common sense critique at the government and especially the Federal Reserve for their handling of the economy and 2008 financial crisis.  Some of Rogers' YouTube clips are so priceless I've watched them numerous times over for the humor value, as well as the underlying insights he shares.

One of my favorite facts about Rogers is that, in 2007 he packed up his wife and daughters and moved to Singapore, while mandating his daughters learn the Mandarin language.  When asked about this -- and this is one of my favorite (paraphrased) sayings of his -- he replies that as much as Britain was the place to live during the dawn of the 19th century, and America was the place to be during the 20th century, so East Asia will be the same for the 21st century.  Of course, China's meteoric growth rate (however inflated) and the highly business-friendly policies of locales like Singapore and Hong Kong have fueled much of this growth, while the US has moved aggressively in the opposite direction by over-regulating and stifling companies based here with high taxes.

All that said, today I read a few articles highlighting Rogers' disdain for the current economic recovery policies, his famous opinion on the Fed (shut it down), and his continued optimism on China.  While I believe this is good reading, I still encourage you to search YouTube for clips of Rogers.  You'll thank me.

This article revolves around Rogers' opinion of the Fed and the economic recovery efforts.

This article covers his opinion on China and shorting US bonds.

This one discusses why the dollar will collapse and the benefits to owning commodities.