Those were the closing words of Jim Rogers on a lengthy interview broadcast today on Bloomberg News.
While the entire discourse is worth watching, the first couple of minutes attacks the facade, the skewed employment numbers published by both the Fed and most of the banking-bureaucratic establishment; or in his words, “these are fraudulent numbers.”
[For the video, click here and look under the "Media" category on the right labeled: "Jim Rogers Says Bernanke Is `A Nut' for Cutting Rates"]
Certainly a nice dose of reality to balance the foolish meanderings of the other Jim — Cramer that is.
See also: The Worst Recession in 25 Years? and Jim Rogers sells the farm
Via King of Newport
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Should that say IF not IT at the title and the quote or is the error in the original speech? Let it not be said that the Austrian School teaches bad grammar. “If I were…” or “It I were”
I blame fluoridated water!
The worst part is… I’m an English teacher.
As I see it Jim Rogers is an oracle in business matters but he seems also to be in a “love affair†with the Chinese government. The People’s Bank of China prints even more money than the Federal Reserve. The consumer price index is increasing more in China than in the United States. The Chinese government gigantic interventions to depreciate the value of the yuan by enormously increases of the supply of money are not a very cleaver move. He is just flirting with the Chinese government because it is good for business and will increase his personal wealth.
Naturally, China offers gigantic opportunities. Market reforms in China during the last 30 years have had an enormous impact. If a hard working, motivated and entrepreneurial spirited people live in a prison camp you will not receive much economic growth. That was the situation before the market reforms in China were introduced. Even small market reforms will have a great effect. China is also still undeveloped and it is a lot easier for them to keep a high rate of economic growth. Hong Kong, Japan, South Korea, Singapore and Taiwan did it during the 50s, 60s and 70s so why should not China do it today? I think it is quite obvious that China will become a superpower. They will also through the years make more economic reforms. They are headed in the right direction.
I think Jim realizes that the US has peaked. The current monetary system has existed for almost 100 years now and we are now approaching the end game. Also, I read somewhere that he said he would be willing to take a 30-40% hit in his Chinese investments, but he will stay for the long term. China will peak if the government reverses its stand on “free” commerce.
So, hopefully people get tired of the US federal government driving commerce into the ground. Vote Ron Paul, I guess.
Great find Tim!
I relation to the China issue discussed in this thread:
I spent 2000-2006 living in China. While the expansion of money is an obvious threat should the government want to expand revenue dramatically, over the past few years it would seem to be a relatively harmless form of taxation, compared to the severe taxation in most western countries.
The main expansion of the Chinese economy is in small to medium sized businesses, which can thrive due to comparitively lower taxes and employment regulations, not to mention plenty of roundabout ways to reduce their tax burdens.
There are obvious reasons why an inflation tax is dangerous, but I tend to think that the current situation in China is less burdensome than the wide range of taxes and regulations, working in addition to comparative levels of inflation in most western economies.
A small point.The Federal Reserve does not publish any labor data .That fall under the jurisdiction of the Labor Department.And I would say notwithstanding Mr Rogers comments that the world is a better place since the inception of the Fed in 1914.JJJ
JJJ wrote:
“the world is a better place since the inception of the Fed in 1914.”
@JJJ
And Russia now has TV’s and microwaves. That doesn’t mean that all its economic policies since 1914 were preferable.
JJJ wrote:
“the world is a better place since the inception of the Fed in 1914.”
If you are implying that the world is better BECAUSE of the Fed, you first have to prove that it is not better INSPITE of the Fed.
I think Jim Rogers views regarding the American economy were not that it has peaked (it is still growing) but that it is too developed and Chinas economy is immature and therefore offers a lot of opportunities and growth potentials. Surely there are a lot of opportunities in Eastern Europe and India as well.
There is no way that the American economy in the long run can keep up with the size of the Chinese economy. There is about 1, 3 billion people living in China and it is only a matter of time when Chinas GNP passes the size of the American GNP. That might be done in the next 20 to 30 years.
The U.S Pe$o closed yesterday at $806 per ounce of gold. I think this data shows Jim Rogers to be right. If the value of the Pe$o stays this low, I expect the prices of just about everything to double in the next 5 to 10 years.
As for China a rise in CPI can also include improvements in the standard of living.
Over at the Financial Times website there is another interview with Rogers (ft.com, link at the frontpage), including a statement of support for Ron Paul’s candidacy.
“As for China a rise in CPI can also include improvements in the standard of livingâ€
A rise in CPI cannot include any improvements in the standard of living. That is a logically invalid statement. As a matter of fact the Chinese governments (which ironically, as all governments, are the very cause for inflations) see the rise in the inflation rate as a great problem.
From the Chinese online newspaper Chinadaily:
“The CPI growth for the first nine months was 4.1 percent, Li explained, far above the official target of 3 percent for 2007.
The growth was mainly because of a 10.6 percent jump in food prices. In a breakdown, meat prices soared 29.1 percent, followed by a 26.2 percent increase in egg prices. Grain prices went up 6.3 percent.
The spokesman also pointed to several factors that might bring down inflation. “The output of grain will register a fourth year of bumper harvest, and with the implementation of various policies, pig raising was recovering, and the total output of pork, beef, mutton and poultry continues to grow,” Li said.
The rapid growth in the GDP, credit and investment, as well as the remaining inflationary pressure increased the pressure for further monetary tightening. The central bank has raised interest rates five times and bank reserve ratio eight times so far this year.
Last week, central bank governor Zhou Xiaochuan pledged to take a more aggressive approach to prevent the economy from overheating.
Zhou pledged to use monetary tools to keep the economy on track, including interest rates and exchange rates, adjustments in bank reserve ratios, and open market operations.â€
http://www.chinadaily.net/china/2007-10/25/content_6206859.htm
Well, I did not know that Jim Rogers supports Ron Paul, but now I know and that explains also why he does not support Ben Bernanke!
Jim Rogers Endorses Ron Paul!
http://dailypaul.com/node/4817
Video, Financial Times, interview with Jim Rogers:
http://www.ft.com/cms/893ac9c8-757e-11dc-b7cb-0000779fd2ac.html
People’s Bank of China is in dilemma. One hand, they have to monitor the foreign currency flows. That’s why they forbid companies and individuals to exchange foreign currency into local currency – it’s a system. On the other hand, this system is utilised by US – the more fiat money FED press, the more PBOC will… PBOC is kidnapped, just like Wall Street kidnaps FED.
“If I were Bernanke’ . . . I would be inspired by the knowledge and wisdom of Ron Paul and encourage American citizens to vote for Ron Paul. Then when Ron Paul is elected President I would resign and watch the as the Federal Reserve Bank becomes naturally obsolete and irrelevant once gold and silver are allowed to be alterative monies.
Bjorn is right, CPI is supposed to be corrected for improvements in quality and so on. I just have a hard time understanding how one would do that in practice in China where the economy is changing so rapidly.
A co-worker returned from Shanghai last week and was astounded at apartments selling for 50,000 yuan per square meter.
Bjorn, thanks for posting the FT video. Missed that one, and it was interesting to see Rogers mention Paul as the sole credible candidate.
For anyone who’d like the permalink to the Jim Rogers Bloomberg interview Tim wrote about, it’s here:
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vo0.Z1Q4Lx7U.asf
That video and another featuring Jim Rogers speaking to a London conference group are posted in our latest “Features of the week” post.
http://financetrends.blogspot.com/2007/11/features-of-week.html
For anyone who’d like to see them.
I think Jim realizes that the US has peaked. The current monetary system has existed for almost 100 years now and we are now approaching the end game. Also, I read somewhere that he said he would be willing to take a 30-40% hit in his Chinese investments, but he will stay for the long term. China will peak if the government reverses its stand on “free” commerce.
So, hopefully people get tired of the US federal government driving commerce into the ground. Vote Ron Paul, I guess.
thanks good post
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