In a CNBC interview with Jim Rogers, the former Quantum Fund co-founder, who back in July said he was had shorted US Treasurys, exhibited absolutely no remorse, instead reiterated a 100% conviction in his "bond short" call: "Rogers said when there is a bubble, such as the one being experienced in U.S. Treasurys, prices could go up for long periods of time. Bill Gross of Pimco, who also had a bearish view on Treasurys, threw in the towel earlier this year. But Rogers is sticking to his opinion that Treasurys will eventually fall.
Ok, so no deflation. What then? The U.S. economy is likely to experience a period of stagflation worse than the 1970s,
Its Post Bubble Inflation Supply and Demand Stupid!
"As the inflation numbers get worse and as governments print more money and as governments have to issue many, many more bonds - somewhere along the line we get to the point when (bond prices) go down."
"This time is never different" and why the mother of all stagflations is coming soon: Rogers believes inflation will get much worse this time because, he said, in the 1970s only the Fed was printing money, whereas now many global central banks have been easing monetary policy.
For now though Rogers is playing it safe and avoiding bonds. Instead, he's betting on stagflation by being long commodities and currencies (such as the Chinese yuan) and shorting stocks.
"In the 70s you didn't make much money in stocks, you made fortunes owning commodities," Rogers added.