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Rogers: U.S. stocks' winning streak 'going to end badly'

By the CNN Wire
March 15, 2013 -- Updated 1613 GMT (0013 HKT)
STORY HIGHLIGHTS
  • The boom in U.S. stocks is "going to end badly," according to investor Jim Rogers
  • Rogers said the Fed's stimulus program was "throwing money out of the window to the markets"
  • Rogers told CNN he was also concerned by the steady rise in the price of gold
  • But Rogers pointed to China as a cause for optimism

(CNN) -- The Federal Reserve's aggressive monetary stimulus policy helping fuel record highs for U.S. stocks is "going to end badly" for the markets, according to investor and author Jim Rogers.

The Dow Jones Industrial Average rose for a tenth straight day to hit a record high of 14, 530 Thursday -- matching a winning streak in 1996 -- as investors continue to be buoyed by the Feds quantitative easing program.

But Rogers told CNN the "artificial" boosting of the economy by the Fed is like "throwing money out of the window to the markets."

Read more: Bernanke warns Congress it could hurt economic rebound

The S&P 500 added 9 points, or 0.6%, as the index of closed in on its all-time high of 1,565.15, set in October 2007, while the Nasdaq gained 0.4%.

Rogers said the thirty stocks listed on the Dow were "not a good indicator" of a global recovery. Speaking with CNN's Nina dos Santos, He said: "The United States is the largest debtor nation in the history of the world and it's getting worse."

Read more: Spending cut. Now, GOP, where are the jobs?

Central banks in other major economies have also embarked on aggressive stimulus plans in recent years in an effort to boost growth, including the Bank of England and the Bank of Japan.

Rogers added: "Debasing your currency sometimes works in the short-term; it has never worked in the long term."

Read more: What does the rising Dow mean?

Rogers told CNN he was also concerned by the steady rise in the price of gold -- trading over $1,500 an ounce -- as investors look to hedge against inflation and low currencies.

"If it goes down [in price], I'll buy more gold; it's been up 12 years in a row... that's extremely rare in any asset and therefore I worry about it," he added.

Rogers pointed to China as a cause for optimism. For February, inflation in the world's second-largest economy rose by 3.2% to a 10-month high with annual growth at 7.8% for 2012, its weakest performance for 13 years. This year China set an inflation target of 3.5%.

In 2012, the People's Bank of China cut interest rates twice to ease pressures on consumers and businesses to combat slowing growth.

Rogers says: "The Chinese are trying to slow things down, rightly so. They've had inflation. They've had a real estate bubble, you should always try to pop bubbles and you should always try to kill inflation, so I admire what they're doing."

The American investor compared China's economic rise to the rapid growth seen in the U.S. in the 20th century with the Great Depression in the 1930s.

"China will have many problems but it's not the end of the world," Rogers added.

CNN's Oliver Joy contributed to this report

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