The China shorts have got is all wrong thus far, and while the economy will continue to experience problems, it will make it through, says Jim Rogers in an interview with Index Universe.
Rogers says that while hedge funder Hugh Hendry has admitted his China short is hurting him, Chanos has not thus far. He believes both, in the long-run, will be proven wrong.
Jim Rogers, from Index Universe:
Well, I feel sorry for them. They’ve been dead wrong for two years. Hugh Hendry has at least acknowledged that being short China is hurting him. I don’t know about Chanos—Jim said he was short, and if so, he’s hurting too. China has not gone down. It’s been two years now and, sure, there are going to be setbacks in China along the way, but China has not collapsed. We, in the U.S., had many depressions—with a “small d;” we had a horrible Civil War; we had very little rule of law; we had periodic massacres in the streets; we had virtually no human rights; you could buy and sell congressmen—well, you can still buy and sell congressmen in America, but they were cheap in those days. As recently as 1907, the whole system was broke in the U.S., and yet we were on the verge of becoming the most successful country in the 20thcentury.
Maybe real estate speculators in Shanghai will go bankrupt. I expect that, I hope it happens; it would be good for China and it would be good for the world. But in the meantime, these guys shorting China have been dead wrong. But I want to repeat this: There will be massive setbacks in China, along the way. It’s the way the world works. If I see serious problems in China, I’m not going to stop teaching my children Mandarin.
Rogers is also short U.S. treasuries and expects his position to grow. Read more about it here >
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