After 10 years of managing the Quantum hedge fund with George Soros in the 1970s, Jim Rogers has become one of those legends whose fame has spread beyond the investment set. Talking to him today, 40 years on, he explains his strong and unsettling views on 2012’s markets. He is certain the world faces a financial crash.

‘This crash – in 2012 or 2013 – will be even worse than 2008 as there are higher debt levels in many economies,’ he says. ‘Greece has failed. Every projection of Greece has it sinking deeper into debt. It can never pay off its debts, but all the politicians are trying to do is to get past the next election.’

The solution, he argues, is to let some of the peripheral countries in Europe go to the wall.

‘Borrowing more to fix the problem is no longer a solution for indebted nations. Countries are bankrupt and politicians should acknowledge this reality. They should let bondholders and shareholders lose their money and start over again. They can’t just expect the situation to right itself. In Scandinavia in the early 1990s, people were allowed to go bankrupt. It caused terrible pain, but three to four years later a bull period emerged for the next 15 years. It works.’

Rogers is most scathing of the US – ‘the largest debtor nation in the history of the world and with a budget deficit of at least $1.6 trillion for fiscal 2012. [In the last crisis], America quadrupled its debt. The system is more stretched now, and America cannot extend its debt again by anything like the same level. This crash will therefore  be much more painful, and the US will default one way or another’.

The problems are larger than most people understand, he says. ‘Europe has a few bad, bankrupt states, but so does America and with scale. We’ve got Illinois which is bigger than Greece, and California which is also a bigger economy than Greece and then there is New York. These are big states with serious economic problems. And we have pension plans in America that are terribly underwater.

‘Every four to six years throughout history America has had some kind of economic slowdown, so perhaps we are overdue for one.’

Rogers’s perspective owes a great deal to his extensive travel in the 1990s, two multi-year treks – the first, a 100,000-mile journey across six continents on a motorbike followed by a second 152,000-mile ride through 116 countries in a Mercedes.

The lasting impression was to make him famously bullish on commodities – well before the bull market in commodities began to rage in the early 2000s.

‘Shortages in agriculture are underestimated,’ he warns. ‘Reserves of all commodities are falling by 6 per cent a year, and no new lead mines have been opened in years. The average age of Japanese farmers is 66, while for US and Australian farmers it is 58. In 10 years, those farmers are going to be 68 if they are still alive. We have huge shortages developing in agriculture, and farming is a hideous job, with the highest estimated suicide rates.

‘One of the greatest markets in history for commodities was the 15-20 years between the 1960s and the early 1980s, because we had huge shortages everywhere and governments just printed money. Governments are again printing money while the power is again shifting from the financial centres to the producers of real goods. The place to be is in commodities, raw materials, and natural resources.’

In 2010, he gave a speech at Oxford University’s Balliol College, of which he is an alumnus, urging students to abandon the idea of taking an MBA or working in  the City, but instead to study agriculture and mining.

He himself sold up his Manhattan mansion to live in Singapore so that his two very young daughters, who are tutored in Mandarin, would be close to the hub of the ‘future world order’. ‘People in Asia are motivated and driven, and we wanted our daughters to be in this type of environment,’ he says. ‘This is how America and Europe used to be.’

What then are his hopes for his girls? ‘The only people who are successful are those who pursue their own passion,’ he says. ‘They can be gardeners if they like.’