Jim Rogers: I Expect a Currency Crisis or Semi-Crisis
By Barry Ritholtz - September 16th, 2009, 3:15PM
The current recovery is just a consequence of the fact that consumption fell so dramatically in 2008 and people have to buy things they need in 2009, Rogers told “Worldwide Exchange.”
“How can the solution for debt and consumption be more debt and more consumption? How can that be the solution to our problems?,” he said.
Video: Jim Rogers, CEO of Rogers Holdings, told CNBC Monday that when Lehman Brothers failed he thought “thank goodness they’re finally letting somebody collapse.”
“I would expect there to be a currency crisis or a semi-crisis this fall or next year. It’s crony capitalism, Bernanke and Greenspan have brought crony capitalism to America … but that’s not going to solve the world’s problems,” Rogers added
September 16th, 2009 at 4:04 pm
You think he would get tired of singing the same old tune. Re currency crisis, still waiting for his collapse of the pound that he called at the current last BOTTOM.
September 16th, 2009 at 5:06 pm
Children, Mister Rogers is talking his book. QE is going to end soon, and here is why:
The reason is that QE is bad for Treasuries, because said govies are, after all, denominated in the US peso, and QE is a fancy Japanese word for PRINTING. So if they continue to PRINT shit-loads of US$ the result is that the US$ will TANK and peep in furrin countries (furriners) would then decide to shun US govies and US assets in general. China would not be amused, and nor would PIMCO, or the banks who are holding much US debt.
The resulting rise in bond yields would crimp the “green shoots” recovery and f**k the mortgage market SIX ways from Sunday leading to a huge rise in F/C and personal BK and a flood of homes on to the market. Meanwhile, a further DUMP in the US peso would actually lead us into a nasty case of STAGFLATION as oil would scream northwards to $100, baking in a 5-6% rate of inflation even as we LURCHED into recession.
Now all of these wonders may yet come to pass but LB does not think that BB wishes to see these delights occur just yet, especially after he has kicked the can down the road and recapitalized the banks through the efforts of BRIAN the broker selling stock to JOHNNY and WANGER who are now the OFFICIAL US bag-holders.
Class dismissed.
September 16th, 2009 at 5:23 pm
More or less my arguments here outlined by Professor Roubini:
http://www.calculatedriskblog.com/2009/09/roubini-desperately-seeking-exit.html
September 16th, 2009 at 8:05 pm
One of the greatest throw away lines ever is the notion that if you let those fail who should have failed then the whole system would have collapsed. Seems to be a line repeated by those who have the most to lose from such an event.
First it is not clear that the whole system would have collapsed. Where were the haircuts for bank bondholders? What ever happened to good old fashioned creative destruction? Who cares if the crisis was deeper, the conservative and prudent would have reaped the rewards and the careless lost their shirts, that’s the way it is supposed to happen.
September 17th, 2009 at 6:24 am
@fundana
Not in an economy that abandoned Capitalism.
When Goldman Sucks, JPMorgan and the Bank of England moved from the Capitalist model, to the as yet unnamed model, and took over the SEC, Treasury, the BIS, World Bank, and IMF simultaneously they created a financial model that Socializes all losses, and left alone the profits.
This Frankenstein of an economic model is perfect, Xanandu, Eden, Shangri-la for the few at the top and of course, anathema to the rest of us, the other 6 billion.