Extreme Investing Beyond Frontier Markets (w/ Jim Rogers)
Grant Williams: Jim, great to see you again. Thanks for having me back. Jim Rogers: I'm delighted to be here, Grant. Well done. You and I are bouncing all around the world in different directions, and it's a fascinating world at the moment. So after the last time we sat and spoke, and you walked everybody through your framework and how you come up with your ideas, I just thought we could look around the world at opportunities and maybe pitfalls and places to avoid, and just kind of get a sense of how you see the world at the moment. Well, as you look around the world right now, Grant, you should be very worried. But go ahead. You ask the questions. And you can probably give me the answers too. Well, we were just chatting off camera and you said you'd just come back from China. So what took you up there and what are you seeing in China at the moment? Well, I'm in China a lot. I'm optimistic about the future of China. It will be the most important country in the 21st century. But I remind you that there will be problems. America, as America grew, had 15 depressions, had a horrible civil war, very little rule of law, massacres in the streets, went bankrupt. I mean the whole place went bankrupt a couple times, so America was a mess as we rose to power and glory. So China is going to have problems too. It's just the way the world works. In 2008, when the world fell apart, China had a lot money saved for a rainy day, and they started spending it when it started raining. This time, China has a lot of debt themselves. It's amazing how much debt has built up in China in just a few years. And so this time, while China's in better shape, or less bad shape than most of us, China's got a lot of debt, and they're not going to be able to help us like they did before. In fact, Beijing has said we're going to let people go bankrupt, which I hope they do. They don't do that in the West. The red Chinese, the communist Chinese are going to let people go bankrupt, because they're good capitalists. Americans won't let anybody-- and the Europeans won't let anybody go bankrupt so they can save the world. But China has said they will let people go bankrupt. It'll be a shock for the people who go bankrupt. It'll be a shock for the world. But it will certainly be good for China, and for the world, if they do let mistakes get cleaned up. But it will mean that they will not be able to save us as much as they did before. So the next time the world comes to an end, it's going to be a bigger shock than we expect. So when you're out there and you're talking to people on the ground, the thing that people in the West are fixating on recently is the currency. Do you get a sense from talking to the Chinese that this idea, and it's gaining some traction in the West, about a devaluation that supposedly needs to occur. Is that something the Chinese are thinking about or is it not really on the radar? The Chinese currency has been the strongest currency world between 2005 and 2015. So it deserves, and should have a correction now. I hope so. Will it be an engineered devaluation, as you put it? I doubt it. There are plenty of currencies that have been collapsing, the Canadian dollar, the Australian dollar. I mean are these devaluations or is this the market taking its course? In my view, it's the market taking its course. The Chinese are letting the market take its course more and more up there. The currency's down against the US dollar, but it's still up against most currencies in the world. It's still very strong against most currencies in the world because it has been so strong for so long. I would certainly like to see more market forces everywhere, including in China. If that happens, you'll probably see more fluctuations in the value of the currency. But the main thing that's happening, Grant, is that the US dollar is strong and will continue to be strong, because everybody's panicked about the world. And when there's panic, people look for a safe haven. Now, they think the US dollar is a safe haven. It's not. It is certainly not. I own a lot of US dollars, though. Not because it's a safe haven, but because people think it's a safe haven. And when the world falls apart, people will put their money into the dollar. That's going to mean the dollar's going to go up, so that means a lot of currencies will go down, including the Chinese currency, including the European currency, the British currency. Many other currencies will go down. Are they going down or is it just craziness in the dollar? In my view, it's craziness in the dollar. The dollar is going to get overpriced, and the dollar might even turn into a bubble, depending on how bad the turmoil is. If there's no place to go-- at the moment, people are also going into the Swiss franc and the Japanese yen. I mean, they're both just as bad as the US dollar, if not worse. Well, I can't say worse. But I wouldn't put my money into either of them. I wouldn't put my money in any of them, including the US dollar, except I do own a lot of US dollars, and I do own some Swiss francs. But when that starts happening, phew, the dollar's going to get overpriced. The Japanese have now suddenly said we don't want to play this anymore. We've let our currency go up enough. The Swiss are going to catch on eventually, one way or the other. But they bungled things so badly in Switzerland. So I suspect that the dollar will go up, which means that everything else will seem to go down. But it's really the artificial movement in the dollar more than anything. It's interesting, because something that's happened recently, which is surprising a lot of people is that both the dollar and the gold price are going up at the same time. A lot of people say, well, that can't happen. I know. It happens at times of great stress, generally. Do you see that as a sign that we're approaching some stress? Well, the first thing you have to understand is that what they said cannot happen, it can. Right, exactly. I assure you. And if they talk about a safe haven, there's no such thing as a safe haven in the financial world that I've found in my many years of investing. So anything can happen. There have been times in the past when the dollar and gold have gone up together. So it can happen and it will happen. Why it's happening? More buyers than sellers. I mean, I don't know why it's happening. I told you before. People looking for a safe haven. They think the US dollar's a safe haven. They don't know what else. They think gold is a safe haven. Therefore neither are a safe-- nothing is a safe haven. But that's what's going on. I'm not the only person who knows there's turmoil coming. And people are looking for ways to protect themselves. I am not buying gold at the moment. I'm not buying dollars, either, but I own plenty of both. The gold, as you know, the commitments of traders, the people who speculate in the futures markets, it's the highest-- the speculators are the highest owners of gold ever in the history of the markets. So that has always meant you better sell. Yeah, right. It's always meant that gold is going to-- whatever it is, wheat, gold, anything. So I'm not buying gold. I'm not selling gold, by any stretch, because I expect to own it forever, but I wouldn't think about buying gold at the moment. It's funny. You mentioned you're not the only person seeing turmoil coming, which is interesting to me, because I've noticed an elevation in the profile of the people who are saying that. You're one of the early guys talking about this. But we've had Stan Druckenmiller come out recently and say get out of stocks. We've heard Jeff Gundlach come out and say sell everything. A lot of people watch for what you say about these things. Are there any guys that you watch for, that you think are good? I wouldn't even watch me, much less somebody else. No, I certainly read the same press you do. I see when people, lots of people are thinking like I do. I usually don't like it when I see other people thinking like I do, even if they're smart people. But no, I see it. And most stock markets are down in 2016 all over the world, no matter where you go. The US stock market averages are not down, but underneath, most stocks are down. 2015, the aver-- the S&P, the Dow were all-- they looked great. But twice as many stocks were down on the New York Stock Exchange as were up. But everybody thinks, well, things are great, because look at the S&P. Well, look under the S&P, and you would say, oh my god, look what's going on here. We've got problems, and that's happening this year as well. Yeah, we've seen this market break out to a new all-time high, which surprised me and surprised a lot of people. Averages. Yeah, exactly right. But that's-- obviously, the headlines deal with the averages, and so you get this self-perpetuating myth about the health of the US stock market, when anyone paying attention, like you do and like many other people do, can see this deterioration in the internals in the breadth, along with some really bad data coming out of the US. It's happening in all markets around the world. And if you look at Japan, I mean, the Bank of Japan is buying ETFs. I mean, goodness knows how low the Japanese stock market would be if the Bank of Japan weren't printing money as fast as they can. Not only that, they're buying bonds, and now they're buying ETFs as well. I mean, I don't know who's left to buy in Japan. I don't know who's selling. Well, I know who's selling. The whole world is selling. Everybody. Everyone is selling, except-- to the Bank of Japan. This is going to end badly when it ends. So we sit here today. The UK cut base rates yesterday. And I was reading headlines saying this is the first interest rate cuts since 2009. And I'm thinking, well, they've been at 1/2 a percent for seven years. I mean, that's not really anything to shout about. What's your take on Brexit? Do you think it's a delayed action? Because everyone seems to think it's calmed. The storm's passed. Do you see a storm coming that's Brexit related? Well, no, of course there are going to be plenty of dislocations. I guess most people, including me, haven't sat down to figure them out yet. But we're starting to see some of them. Who was it today? Goldman Sachs or somebody said we're going to have to move people out of London. There are going to be consequences of what happened. Good consequences, bad consequences, some of them are going to be bad consequences. The UK-- I mean, the bad news-- the bad scenario is Scotland says, well, wait a minute. We don't want to play this game. Scotland pulls out. Well, Scotland takes the oil. It's Scotland's oil. They're not going to leave the oil behind. Scotland takes the oil. The UK already has a huge balance of trade deficit, a huge government deficit. Well, if they lose the oil, well, I mean that's the end of the balance of trade, that's the end of the government deficit. It gets worse, in other words. Then the city of London, of course, which is the only thing they have left-- That's going to start collapsing-- as far as income for the UK. So I mean, the UK becomes Portugal, becomes Poland, becomes-- You know, Poland, once upon a time, was the most powerful country in parts of the world. Portugal was one of the most powerful countries in the world at one time. The UK's not going to become Portugal this week, but that-- you start to see that kind of deterioration. Is that a reason to rush out and sell UK today? No. But that's what this could lead to, and probably will lead to, because you're going to have more people trying to exit. I mean, there are people in Italy who want to leave, leave Italy. There are people in Spain. I mean, all over Europe, there are people that want to leave, and then there are countries which want to leave too. So you're going to have more movements. Whether they're successful or not doesn't really matter, just the turmoil or the uncertainty of more and more people saying, hey, it's my time too. Some politicians are going to say, well, look at Nigel. He became famous and successful and he got what he wanted. Why don't I do it too? And they're going to try to do it. So you're going to have more turmoil. And does that mean you should go and sell short XYZ today? No. But the ongoing rolling consequences. We're already having economic problems worldwide. Japan's in recession. They will tell you. Parts of America, parts of Europe are in recession. And the way bear markets work is something happens. It's a shock. People get over it. Then something else, and you know. In 2007, Iceland went bankrupt. Yeah. Iceland? Who's Iceland? What do you-- who cares? Then Ireland went bankrupt and the next thing you know, Lehman's going bankrupt. But that's the way these things always work. They start on an outlier, a marginal company, marginal country, and then it leads, and then everybody says, oh, well, we knew that. We knew it was a bear market coming. Well, they usually don't. They shake it off until it's too late. You know, ironically, one country where nobody seems to want to leave is Russia. This is a place that when we spoke about it last time, it was really at the depths of the Russia situation. There was a lot of bad press, particularly here in the West, obviously, which is generally the case. But it seems to have weathered that storm. Where are you now? Because you were putting money to work in Russia back then. How's the last year been? Grant, I'm glad you remember, but I'm a little shocked. My three shareholdings are all making all-time highs. It's the sto-- I mean, I own shares of Aeroflot, going through the roof. Moscow Stock Exchange, going through the roof. PhosAgro, big fertilizer. I'm a director. Big fertilizer. Making all-time highs. I mean, how can this be? A country which is a disaster, which everybody hates. I own Russian government bonds in rubles. The yields are astonishing. And as long as the ruble doesn't collapse or disappear, which it's not doing, at least not at the moment. The yields are beyond comprehension. If I could just have those yields for the rest of my life, I'd be in hog heaven. You've made a career of doing this, going to places where everybody else is running out of the exits, and you go in with a much more balanced view and look for value. You know, it's something you've obviously found in Russia. The other place that you shocked me last time was Zimbabwe. How’s Zimbabwe going? Well, I told you last time there were so little, my investments, in the investments in Zimbabwe that I should've forgotten about them. But I'm just continuing to invest in a small way, a very small way. And nothing has happened there. I mean, if Mugabe dies, I might put a lot of money into Zimbabwe, because it does have great resources, and it could be a terrific place. But I mean, what could be worse than Zimbabwe? Russia. Right. Let's see, what else could be worse? Venezuela, maybe. Venezuela, I'm not investing in Venezuela. Colombia, I have a small inve-- but I mean, it's not nearly as disastrous as Zimbabwe or Russia. But what about places like Greece and Spain? I opened an account in Nigeria, but I haven't done anything, which I've never, ever, ever in my whole life thought about investing in Nigeria. I've opened an account in Kazakhstan. I'm trying to open an account in Rwanda, but it's just the market is-- it's more an afterthought than anything else. Not many places. But you know, this is fascinating to me, because this is what nobody does. Nobody just decides to try and open an account in Rwanda just in case, at some point, down the tra-- this is how you make money, right? Jim-- I was interviewing Jim Grant, and he said if you want to make money you have to go to scary places. Well, I'll tell you one reason people don't open accounts in Rwanda is it's very difficult. Yeah, I'm sure. It's complicated, much more complicated. The poor woman's been working on it for two weeks to get us an account in Rwanda. They don't even answer the phones. There's a lot, on their internet, that says contact us. Well, OK. We cont-- but nobody answers the phone. So however we're supposed to contact them. Anyway, we are progressing in Rwanda, but there's not much you can do. It's nice to talk about, and someday, someday Rwanda may be great, but even if we get the account open, it's not as though we-- But I'm fascinated to understand this. I mean, at what point in your process do you think, OK, well, let's open an account. Because you must have down more than a cursory look at it. You must be thinking, well, you know, I can see avenues of opportunity. They're not ready yet. But at what point in that process do you think, OK, let's get ready to do something maybe three years down the track, four years, whatever it may be. If Rwanda were actually liquid, I would be putting money there now. It's ready. Rwanda wants to be the Singapore of Africa, and it could well be. It could even be better than the Singapore of Africa down the road. I don't know why. I finally, after thinking about Rwanda for many years, two weeks ago I said let's get the account open. I'm not sure what clicked, except something clicked. I know a lady who's here, who lives here, a Rwandan. Maybe I ran into her. Maybe that's what it was. She had a little baby, so maybe that's why. I ran into her and maybe that's why I did something. But that's it, right? Sometimes it's just that gut feel that you know what, now's the time to just get real. Whatever it is, maybe just the fact that I ran into this lady and her new baby, so I said, well, why don't I go ahead and open the account. I mean, your career is full of those little chance moments. Grant, I wish I could tell you that I'm clever and smart and that this is all figured out and planned. It's mainly just accident. Most everything I do is accident. Yeah, you're not fooling anybody, Jim. Elsewhere in the world, the commodities space is something that you've spent a lot of time talking about in recent years. How does that look to you now? You've spent some time looking at sugar recently, and I read some stuff and you being-- Well, agriculture certainly is depressed. It was depressed last time I saw. It got more depressed. I am optimistic about agriculture. I'm not going to say it can't get worse. Sure. Because every time you say something like that, it gets worse. No matter what it is. It can get worse, no matter what you're investing in. But I still see wonderful opportunities, price-wise in agriculture, fundamental-wise in agriculture. But since I'm a hopeless trader, fortunately, I'm not going to worry about margin calls, because I'm not rushing out and buying a lot of sugar on 5% margin or something. There was a time in my life when I did that, but that was a long, long time ago. Now I'm doing other things. The fundamentals continue to get worse, but as I think you and I spoke about last time, I'm the single worst market timer in the world. I'm the worst trader. I know that about myself. I've learned it over the years that when I say, now's the time, I should wait another year or two. The problem is I do. I wait another year or two and I should wait another year or two, because I'm so hopeless and so early at most things. But fortunately, as I say, I'm not so leveraged or in such margin that I have to worry about most things. Well, having that latitude-- Not being a good trader has probably saved you a fortune because you don't try and trade these things. You look for an opportunity to get into a position, and it's a holding for you. It's not a trade. I don't know how to trade. Everything's a holding for me. Well, it's funny, because the idea over the last 20 years has been everyone's a trader. Nobody's an investor anymore. And the ETF phenomenon has just amplified that, where people can get in and out of entire sectors without ever having to do any work. Entire countries, yeah. Entire everything. Yeah, I mean, that's what people do. I heard someone talking today. We did a piece on-- with someone talking about Iran, and someone came up to at a conference I was speaking at and said, is there an Iran ETF? Well, no, there isn't. And if you want to invest in Iran, go to Iran and find companies to invest in. Well, there are a couple of Iran funds now. But there's not-- if there is an Iran ETF, I don't know about it. I've tried to open-- I had an account in Iran 25 years ago. It made, percentage-wise, a lot of money, and we tried to get it open again recently, but apparently, at least if she's right, the sanctions are still there against Americans. Now, the press is full of the fact that new era, no sanctions, come to Iran, et cetera, et cetera. So we tried. But unfortunately, she says you can't invest in Iran. So some kind of sanctions are still there. No, I would love to, but it's not easy. Well, one other place we talked about strange regimes, perhaps the strangest regime and potential changes-- you spoke at Brexit in Europe-- is the US with the current political cycle. As an expatriated American sitting here in Singapore, what do you make of this when you look back? Because there's going to be crisis and opportunity, whichever way this election goes. How do you see this whole clown show? If Mr. Trump does what he says-- I'm just saying what he says-- if he does, it means bankruptcy and war. I mean, trade wars. He is determined, he says, to have lots of trade wars. If he does that, that's always, always led to bankruptcy. One of the, I guess, the main lesson of history is that nobody knows the lessons of history. Right Nobody learns the lessons of history. Even if you know history, which most don't, we don't learn the lessons of history. But they've always lead to trade wars. And trade wars have often led to the real thing. Conflict, yeah. So if Mr. Trump does what he says, and he may well win, that's what happens. Now, if Mrs. Clinton wins, same thing, it just takes longer. She doesn't have a clue what she's doing, absolutely, no clue what she's doing. And she'll bank-- she'll tax us all and bankruptcy us all, sooner or later, sooner probably. Maybe a little later than if Mr. Trump wins. But either way, there's a bear market in your future. And the two people on the horizon, which apparently one of will win-- it's as I said before, these things start slowly, a marginal country, marginal companies, and the next thing you know we're in the midst of a bear market. There are always reasons. You can look back and figure it out, and those will be some of the reasons. Given that this bear market is approaching, and I think a lot of people now can see it, but they're still hoping that they can make a little bit more, because yields and returns are so low, they kind of want to stay in the game a little bit longer just to squeeze a little bit extra out of it. How are you preparing for this bear market? What steps you taking time to get yourself ready for what you see coming? Well, first of all, Grant, I'm sure I'm not going to get it right. I promise you. I don't know why you ask me. You should be short the US. That's the market that's still the highest. It hasn't gone down yet. One can have shorts in any place you want, but the Japanese market is down 70%, 75% from its all-time. The Russian mar-- who wants to short Russia? I'm long Russia. I mean, where are you going to short? Everything's collapsed. Maybe-- I'm not buying India. There was a recent remarkable development in India, but it's not enough to make me buy India. You have to be short and most markets are already down. There are very few markets that aren't down already in the world, except the averages in New York. Now, you can certainly short Europe, because it's going to get worse. You can certainly short the UK, because it's going to get worse. But the things that are still high, I'm sure your parents taught you to buy low and sell high. Well, the things that are high still happen to be the US, more than anything else. What about cash? Because people have a tremendous opposition to owning cash, particularly given the interest rate environment we're in. I often think about that. It's so hated, but we probably always should own nothing but cash. The problem is what cash. You know, if you'd owned Icelandic krona in 2007, you were brilliant. You saw the bear market coming. You were getting huge interest rates in Iceland. God, what a smart guy! And you lost your shirt going into cash. You have the right cash. At the moment, it's the US dollars. I've fumbled around with that and wonder-- we should all own cash because it's the most hated asset. It's more hated than Russia. It's more hated than Zimbabwe. It's more hated than everything. But then, which cash? At the moment, it's US dollars for me. But it probably should be Russian rubles. It probably should be something that isn't striking a bell yet. The yen keeps going up. Although, the Japanese don't want that anymore, and they've got more money than I do. And the fundamentals in Japan are just-- let's say it may be worst- - it couldn't be worse than the US, but they're certainly ter-- I don't know. I'm looking. If you have any cash that I should own, I own renminbi as well. But as we said before, the dollar's going to go up against the renminbi, especially when you start having bankruptcies in China, which the Chinese have said they're going to let-- they've said they're going to let it happen. They said that the market is smarter than we are. I hope they mean it. Yeah. But if you own a lot of renminbi, and they start having bankruptcies, people are going to be in such shock, the Chinese included, they'll want to get out of the renminbi. And it is, as I say, it's been going up anyway. So I don't know. The Hong Kong dollar you can own, because it's tied to the US dollar. That's not really fair, and eventually it's going to be-- It's only going to come under some strain. They're going to break the tie. But do you think you need a commodity currency of some-- Let's take the dollar out of the equation. Do you think you need a commodity currency that's at least notionally backed by something in the ground that's not just pure-- at least it's a country that will benefit from a weakening currency? Well, so we buy Australia, which fits that description? No, because they keep running up debt. I mean, the Australian politicians are as bad as America. I don't know how it could possibly be that they keep getting politicians worse than Americans. Canada, I mean, I own some Canadian dollars, but I'm not sure that the world is going to suddenly all rush into Canadian dollars. It fits the description you just outlined. I have not found-- and maybe I should put all my money into Colombia. It's come out of the horrible 30-year civil war. I do have some investments in Colombia. It's a wonderful country, but they've got a lot of oil, but their oil is drying up. So the problem is you've got to-- it's a commodity country. There probably is one, Grant, I just have-- I'm too lazy to have found it yet. And I'm sure if we all bought North Korean currency, we'd all be rich someday. Well, it's fascinating you say that. It's isolated from all of this. Right. I heard you mention-- I listened to an interview you did recently, and I heard you mention North Korea, and in typical Jim Rogers' fashion, you're the first guy I've ever heard mention North Korea, and it might have been an off the cuff remark. No, no, no. I'm very serious. Yeah, so talk to me a little bit about that, because I mean, I've never heard anybody talk about North Korea as an opportunity. Well, North Korea today is where China was in 1981. Deng Xiaoping started opening up in '78. Most of us, including me, either weren't aware of it or if we were aware of it, we ignored it, didn't pay any attention. North Korea is doing that now. The kid is not. I mean, the kid was educated in Switzerland. I don't know why his father picked him. He's not the ol-- he's the third, I think he's the third in line. It may be that the father picked him because he wasn't in North Korea. He did know about the rest of the world. I'd have to ask the father why he picked him. But he is opening it up. There are 15 free trade zones there now. You can take bicycle tours of North Korea, if you want. You can take movie tours. I'm sure if his father were alive, he'd hang him. If his grandfather were alive, he'd torture him and then hang him, you know, for some of the things he's doing. I mean, you go to North Korea now, you see these astonishing restaurants with white tablecloths, cutlery, candles. I mean, this is North Korea we're talking about. Chefs. It's happening. I'm not quite sure about the recent missile things. And the problem is my only source of information is the Western press. But we know the Western press is full of lies and propaganda about everybody, including themselves. Particularly North Korea. Especially North Korea. But let's even say it's happening. Is that happening? I know the kid wants to have a peace treaty. He's been very clear that he wants a peace treaty with the West, with the US. Now, is this part of a negotiating stance to get a peace treaty? The kid wants to open up. I mean, the kid wants to go watch the Chicago Bulls. This is not his idea of fun. He's been around. His generals, when they were captains, they went to Beijing. They couldn't go anywhere else. But now they go to Beijing, and they say, oh my god, you won't believe what's happened in Beijing. And they come home and nothing has happened. There's a black market now. There are all these middle class people rising. They know that there's something else out there. They know what's happening in South Korea. They all know it now. And when you have a black market, it means somebody knows something, and they're willing to take the risk and to participate. So all the classic signs of a country opening up and changing are there to see. No stock market. I'm an American. I'm a citizen of the land of the free, but we ain't so free. We can-- it's very difficult. The fact that I can spell North Korea is probably illegal. I've been there a couple of times, which is legal. But it's very difficult for me, or Americans, to invest. The Chinese are pouring in. You go there, there are Chinese everywhere. The Russians are pouring in now. When I was there the last time, they thought I was-- they kept speaking to me in Russian, because they just assumed I was Russian because I was Caucasian. No, they're all pouring in, except me. It's interesting, because you don't have to look to far away or too far back. You look at Myanmar. It's the same model. You know, the generals ran the country. Their kids were educated in Switzerland, and they wanted to open up. So there was a very peaceful transition of power over to a quasi-democracy. I mean, so the template is there, but nobody's thinking about North Korea in those terms, and it may be because of this propaganda onslaught. No, I'm sure it's the propaganda onslaught. The Japanese are against it. The Japanese-- when North and South Korea merge, that's disaster for Japan, because then you have 75 million people on the Chinese border, a lot of cheap, educated, disciplined labor in the North, natural resources, lots of natural resources in the North, and the South Koreans have capital, management. You put them together on the border-- well, the poor Japanese, they don't want this. It may be American propaganda, but somebody's figured out, oh my god, how are we going to compete with a unified Korea, so they're against it. The Americans don't know why they're against it. It's the bureaucrats in Washington who made their whole careers being against North Korea or against it. They don't know why. They do know that if they unify, then the American troops will have to leave Korea, because the deal is not going to be, OK, we unify and the Americans stay, 40,000 American troops stay here. That's not going to happen, if and when it happens. But the Americans are against it. They're not really sure why. The Japanese, the ones who've thought about it, know why they're against it, but they're not going to be able to stop it. So no, it's going to happen. It's in the process. There are people in South Korea now. There's a movement in South Korea for unification. When I was there in North Korea, both times, there was a movement for unification, propaganda posters in North Korea. The propaganda posters said unification, let's have unification. So everybody's ready, except Japan, America, and a few people, I guess, in South Korea. Well, at the risk of a clunking gear change. It's something that I wanted to ask you about, and that's coming back to the Western world, and that's Europe and the banking system, which is really coming under some pressure now. You look at Deutsche Bank, Credit Suisse. You're seeing the biggest banks in Europe, and you're looking at their equity prices, which for all the world look like they're going to zero. What do you make of this problem at the heart of the Europe financial system? Why are you stopping at Europe? What about America? America, the off balance sheet derivatives, I won't name names, but they just couldn't be. It could not be. The numbers are so high, but they are. The facts are there. So it's happening in Europe more now because the currency is under duress, and the interest rates are more under duress. So that's why it's happening there. But America's in just as bad shape, the American banking system, so the Western world. I'm sure the Japanese banks haven't stopped to think about it. We all have staggering, staggering debts, and we're lucky we have negative interest rates now. It hasn't worked. It hasn't worked anywhere. And yet, the bureaucrats and the politicians say, and the academics say, negative interest rates, that'll solve the problems. Well, it hasn't. But they keep telling each other it'll happen. It'll work. But it hasn't. It's just making things worse. I mean, to me it depends. If you set out with it to restore growth, it hasn't worked. If you actually set out for it to keep the wheels on the entire edifice, you could argue that it's worked, because things haven't fallen apart yet. But you're getting to that point where you're pushing on a string now, and now we're at helicopter money. Well, you said it's held everything together, and I guess they're not riots out there in the streets at the moment. Or maybe there are. We keep looking. It just sounds like a riot. But this is destroying the people who save and invest. The pension plans all over the world are now being destroyed. I mean, I don't know why more of them haven't gotten the pitchforks out and said, wait a minute, what's going on here? Because all pension plans everywhere in the world are being destroyed. Trust funds, insurance companies, endowments, they're all being destroyed by this is absurd policy that hasn't worked, that is at work. And you say it hasn't-- the wheels haven't fallen off the truck yet. Well, you go to any pension- - go to your pension plan, if you have one, and ask them about the wheels on the truck. And they'll tell you, we haven't got any wheels anymore. We're going to have huge problems down the road. So it's not working. I'm not sure who it-- I know originally it was supposed to save the people who had deep debts who bought 16 houses with no job and no money down. Well, OK, they've been saved. Who are we saving now? Who are we trying to help now? Well, now we're saving the governments. We're saving the governments. https://youtu.be/THQ7nbWypYI?t=2386 I guess that's it. We're saving the Japanese government-- all governments. Because if interest rates go to any level, Japan's tot-- [COUGHING] Japan's tota-- England, we're all totally bankrupt. If the interest rate's going to be any normal level. I was talking to a friend-- By the way, Russia's not bankrupt. Right. Well, they have, what, 18%-- If interest rates go to a high level, normal level, Russia's not bankrupt. There are a few countries. North Korea's not bankrupt. There are a few countries that aren't. Zimbabwe's not bankrupt. There are a few countries that aren't bankrupt. I'm not starting to see your master plan coming into focus, Rwanda, Zimbabwe, North Korea. I wish I were smart enough to have a master plan. Well, we have to come up with an acronym for all these countries. This could be tricky. But someone's going to have to come up with a cute acronym for Rwanda, North Korea, Zimbabwe, Russia. Well, OK, go ahead. So just to kind of wrap things up, because I don't want to take too much of your time. We're looking at a world where cash is somewhat kind, and of those alternatives, the dollar is-- If you're in the right cash. The dollar is probably the best place for now. Owning gold is a good idea, but maybe buying it right now, not. Not with money. If you've already got some, hold onto it. Dangerous markets where no one dares to trade, and short things like US equities, I mean, that's a pretty extreme portfolio for most people to get their heads around. I mean, you're not most people. You're someone that is prepared to make moves like this ahead of the crowd, to get to places. What advice can you give to people to try and help themselves entertain possibilities that they don't want to listen to. Grant, you said that's extreme What's extreme about it? No, I don't think it is, but to most people, you're saying, look, cash, gold, short Western equities and long North Korea. And Russia. That's going to sound extreme to people. But Russia's cheap, vast resources, little debt, convertible currency. What's extreme about that? What's your favorite? If I didn't tell you the name, and I described the country, and I said huge population, little debt, vast natural resources, convertible currency, very cheap stock market, high yielding bonds, government debt, government debt high yielding, you'd say, where do I sign up? Right. You would say that's not extreme, that's what I'm looking for. I completely agree, but the problem is the next part where you say, OK, it's Russia, and they go, I'm out. And that's not enough. I know. I know. That's what I'm saying. You say it's extreme. I'm saying it's not. But you're right, I know. Most people hang up. You say North Korea, then they want to leave the room. I don't want to bother with this guy anymore. Zimbabwe and the other places that you've mentioned. Iran-- But is there anything you can-- because I'm just-- it intrigues me that what you're saying makes perfect sense to me. And none of this scares me. It really interests me. I think, I need to go and read some more about North Korean and I need to find out more about this. Is there a lesson from your career, your life, that enables you to think that way when most people don't? Is there anything, an event or something that happened, that you can try and help people say, look, this is how you need to think of this. It was just that I've been around a long time. And I've learned over my career, not just my career, but reading about the world, the stranger it sounds, the more you should say, wait a minute. That sounds really strange. Let me look at it. Let me hear what's going on. Because I have certainly learned that over my life, not just my life. You read history. You read anything. As I said before, the lesson of history is that most people don't learn the lesson of history. They ignore the lesson of history. Now, we all know that if we'd invested in China 1981, we'd be the richest people in the room right now. And yet, in 1981, including me, we would have said what's wrong with-- who? Don't you know about Mao Zedong? Doesn't he know about the Great Leap Forward? Doesn't he know about all this stuff that-- what Chinese is? I'm sure that if we had said in 1948, you know, there's this country called Germany that you should be investing in, people would have said, don't you know about Adolf Hitler? Don't you know about the disaster of what this country was? If you'd said Japan, don't you know about Hiroshima? The atomic bomb? You don't know about the dictator, the emperor? How could you invest there? They're little, bitty yellow people who must be dishonest and cruel. But those are the lessons of history. If somebody had walked into my-- fortunately in 1948, I was 6, so if they'd walked into my room, I wouldn't have known what they were talking about, but I'm just saying. Maybe you would have known. The lessons of history are very, very, very clear. The stranger it sounds-- and the real lesson of history, Grant, is that you pick any year in history, whatever we think is true, that year, 1900, 15 years later, it's a whole entirely different world. And we all know in 1900 how the world is, and we should be saying to ourselves, find me a weird guy. Find me a strange guy to tell me how this is going to change. 1950, 15 years later, everything we knew, everything we knew was totally wrong. So I, at least, have learned that, that lesson of history. And perhaps that's why I'm more-- not interested, more I'm excited when I start looking at the way the world is today and what we all know. Because I know what we all know is not going to be true in 15 years, no matter what it is. And my problem is how do I figure it out. How do I figure it out? I mean, an easy would be Cuba. Well, everybody now knows that Cuba, Cuba, Cuba. Well, what everybody misses is since the Americans were closed for so long. The Mexicans are there. The Canadians are there. The Spanish are there. Gringo, we've been waiting for you. Come, we have a nice beach to sell you. We have an old mansion to sell you. They're already there. It doesn't do any good for me to suddenly say, ah, let's go to Cuba. Come on, the Spanish have been already there. They've beat us to the punch, and they've bought it all up. And that doesn't do you and me any good. North Korea, nobody's beat us to them. Well, the Russians and the Chinese are getting there. I was actually about to become an investor in a group of Chinese that had a bank, a bank in North Korea. I mean, there were no banks in North Korea 10 years. But these Chinese went over there and started a bank. And they were going to sell me shares. My lawyer in Washington says, have you've forgotten that you're a citizen of the land of the free? What are you talking about? Free people are not allowed to invest wherever they want to. Citizens of free countries cannot do what they want. So I'm sitting there watching these Chinese who desperately wanted me to invest. Make fortune. They're going to be the richest people in China, because they're starting banks, and everything else in North Korea and you and I just sit and look. And say, buy me a Champagne someday. But that US, how it works, that is the lesson of history. Whatever we know today, no matter what it is is not going to be true in 15 years. Jim, it's the perfect way to end. I could sit and listen to you for hours. I don't want to take up anymore of your time. But thank you so much for this. It's been a real thrill, once again.