Rogers: US bright spot is just pre-election phenomenon

Veteran investor Jim Rogers said he is sceptical about the prospects for the US economy this year despite a recent string of positive economic data from the country.

In recent weeks, improved leading indicators, including job market data, has raised hopes the US economy will prove strong in 2012 and beyond. 

But in an interview with India's Economic Times, Rogers said: "Of course you have the American government spending staggering amounts of money right now, printing a lot of money and getting ready for the election."

"It happens every four years in America. They do their best to get the economy juiced up so they can win the election."

According to Rogers, the fact there will be 40 elections held worldwide in 2012 means a recovery from the global financial crisis is likely to be distorted. He warned investors to be wary of 2013 and 2014 because the real impact of the crisis is simply being postponed.

"Everybody is going to do their best to get us through the election. Watch out for 2013," added Rogers.

As a long-time commodities bull, Rogers said although the sector has suffered a short-term blip, it is still in a major upwards trend over the long term. He reiterated his view that owning real assets is the best strategy in an environment of excessive quantitative easing.

"If the world economy gets better, then obviously commodity prices will do well because of the shortages. If the world economy does not get better, they are going to print a lot of money and you need to own real assets when they print money," he said.

Rogers also pointed to a rally in base metals and said because they fared so badly in 2011, they are overdue a correction.

He is also maintaining his short positions on the Indian and Brazilian stock markets, as well as Indonesia.

Of India, he said: "You have got serious problems there," adding the government has made a series of policy errors. 

"Brazil is normally not a very well-managed country and the new government is making many mistakes and of course the market there was very high.

"All emerging markets ran up a lot in 2009 and 2010 and that is why I started shorting them, mainly on price because most of them just went up too much," he added.