The stock market is headed for a major slide, as the Federal Reserve begins to curtail its massive easing program, says star investor Jim Rogers, chairman of Rogers Holdings.
The S&P 500 index stood at 2,113 Thursday morning, 1 percent below its record high.
"This is the first time in recorded history that all the major world’s central banks are printing staggering amounts of money," Rogers told MarketWatch
"Now the world has this huge artificial ocean of liquidity. The people getting the money are having a wonderful time. But when it ends, it will be very nasty. The idea that the solution to too much debt is more debt is mind-boggling."
The economy has been in recovery mode since June 2009, and the S&P 500 has tripled since March 2009. But, "we have had economic slowdowns every four to seven years since the beginning of the Republic," Rogers said.
"We’re overdue for another problem. When this artificial sea of liquidity ends, we’re going to pay a terrible price."
Not everyone is bearish on stocks. Indeed Thomas Lee, founder of Fundstrat Global Advisors, has been bullish for months.
And Greece's debt crisis, which he calls a "sideshow," hasn't changed his mind. "Greece isn't the systemic risk that it was three years ago," he told CNBC
. "Focus on U.S. fundamentals, which have been really good."
While the economy shrank 0.2 percent in the first quarter, economists surveyed by Bloomberg anticipate growth of 2.5 percent for this quarter.
"I know people are fearful about rising rates and Fed tightening and what it means," Lee said. "But at the end of the day, we're actually seeing reflation — the good kind of rising prices in the U.S. I think it's bullish for capital spending and bullish for housing."
Consumer prices rose 0.4 percent last month, though they were unchanged for the 12 months through May. The Fed has indicated that it's likely to boost interest rates later this year.
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