Friday, November 14, 2014

Jimmy Rogers, Putin and My Friend Michael Waring

MY friend, Michael Waring, a very smart guy who runs Gallileo Equity copied me an interview of Jimmy Rogers by Henry Blodgett, also two very smart guys. Basically, Rogers blames the State Department (and, therefore, Edward Snowden-a pawn in somebody's geo-political economic game) for provoking Putin's aggressive stance. (Sort of falls into the category of if the guy can't take a joke f**k him.

Here's my response to Michael to a portion of the interview.

"He’s a thinker and Putin’’s a stinker! Not to be glib. I beginning to sound like my brother! I like Jimmy-he mostly makes a lot of sense. Still, I’m not quite as sure that punishing Putin with an oil shock and its attendant collateral damage to Canada and Australia and some of the friendlier Arab states at a time of intense foment, does. I agree that the oil shock offers a strategic silver lining-sanctioning Russia where it hurts most. And yet, you wonder, why Putin is forging ahead with an invasion of the Ukraine where he is bound to drain his treasury and when old revenues are weakening. Seems like a mistake. It also seems weird that Jimmy would consider Putin deranged if he invaded Germany. Wouldn't he have to invade Poland first? What does that make Poland, chopped liver? There’s a whole lot about this crack in oil that does not add up. It does NOT seem like ECONOMICS at work, but I can’t see WHAT is at work. Am I nuts. I bought some oils today. Probably way too early. Way, Way too early!"

Here's the relevant portion of the interview from Business Insider, November 14, 2014.

HB: Could the recent move in oil prices indicate a fundamental positive for the economy?

JR: It's a fundamental positive for anybody who uses oil, who uses energy. It's not a positive for places like Canada, Russia, or Australia. It seems to me that this is a bit of an artificial move. The Saudis, from what I can gather, are dumping oil because the US has told them to in order to put pressure on Russia and Iran. And it's probably not a real move. I read about shale oil like you do. But at the same time, North Sea production is declining. Russian production will start declining next year. All the major oil fields that we know about — all the production is static or declining. So it doesn't quite add up on any kind of medium-term basis I can see.

HB: You've been bullish in the last year or two on Russia, which is now going through something of a crisis. Has your view changed?

JR: No, no. I've been traveling a lot lately. I should probably try to sit down and figure out what to buy in Russia again. It has had a collapse, as you know, but I suspect if you look at things like Russian ETFs, they are down at previous lows, but not making new lows. And a lot of that is because of the ruble. To Russia's credit, Russia has not been sitting around supporting the ruble in any big way. My view of markets is you let them clean themselves out, let the system find a clearing price. To my astonishment, the Russians are being more capitalist than the Western capitalists. They are letting the currency find its own bottom. That will change soon. It will find its own bottom, and then Russia will be a good place to invest.

HB: And you say that even given Russian President Vladimir Putin and his aggressiveness?

JR: It sounds like you have been reading American propaganda too much. This all started with America, with that diplomat in Washington [Victoria Nuland, the Asst. Secretary of State]; they have her on tape. We were the ones who were very aggressive. We're the ones who said, 'We're going to overthrow this government, we don't like this government, even though it was elected. They are fools and we don't like them, so we're going to get rid of them.' We were the aggressive ones. Crimea has been part of Russia for centuries. If it weren't for [Nikita] Khrushchev getting drunk one night, it would still have been part of Russia. That election was in process, anyway. Everybody would rather be part of Russia than Ukraine. Ukraine is one of the worst-managed countries I've ever seen. Of course people want to get out of Ukraine. You would, too. It's a disaster.

Here's the whole interview.

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