Tuesday, December 25, 2007

Jim Rogers: Bernanke in Over His Head


Investment guru Jim Rogers says the U.S. economy is either in recession or on the brink of it, and that America’s political leaders already know it.

"The American economy is already in recession or very close to it, and the administration knows this but is lying to the public," investment guru Jim Rogers said this week.

He told the Israeli business newswire The Globes that it might take six months for the recession to unavoidably apparent. He added that Fed Chairman Ben Bernanke is unlikely to do much about it — except perhaps make inflation worse.

"He's an academic with no experience in capital markets. All he has learned is to print money,” Roger said.

"Many have tried this here and elsewhere in the world, including in Israel, and he will discover what others have learned before him: It causes inflation,” Rogers said.

Rogers has little positive to say about "Helicopter Ben,” referring to a Bernanke speech made before he was named Fed chief, in which Bernanke cited Milton Friedman’s theory that the Fed could offset deflation by tossing cash out of helicopters if need be.

Bernanke would be better off letting the free market work than stepping in deeper, Rogers said.

If he was in charge, Rogers added, the central bank would be the first to go.

"We were once a country that loaned money. Today we're drowning in debt, and the U.S. owes another $1 trillion every 15 months,” Rogers said.

"Our enemies think about how to exploit this situation to harm us,” Roger said.

Rogers pulled no punches on Bernanke’s predecessor, Alan Greenspan, either.

"Greenspan told Congress that he saw no bubble when even my mother could see it. It sometimes seemed to me that Greenspan was saying in interviews things that he heard on CNBC, which was quoting him,” Roger said.

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