Tags: Rogers | Bernanke | Fed | exit

Jim Rogers: Bernanke Has an Exit Plan — Leaving His Position

Friday, 31 May 2013 12:28 PM

By Michelle Smith

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While many investors are concerned about the Federal Reserve's strategy to exit quantitative easing, famed investor Jim Rogers does not know how the Fed will unwind the programs, but he believes Fed Chairman Ben Bernanke has a plan for a different sort of exit.

"Mr. Bernanke's exit plan apparently is that he is going to leave his job," Rogers said in an interview with Gold Money.

Bernanke's term ends in 2014. That neither he nor President Obama has talked about his next term has helped to fuel speculation that this is Bernanke's last year as chairman.

Editor's Note:
Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

These speculations were recently stoked by the announcement that he will not attend the Fed's annual conference in Jackson Hole, Wyo., this year. Since taking the reins at the Fed, Bernanke has not only been present every year but he has also been a key speaker at the high-profile event.

Further adding to suspicions was Bernanke's recent reply to questions about his future plans.

"I don't think that I'm the only person in the world who can manage the exit," Bernanke told a crowd at a press conference, The Associate Press reported.

"He doesn't want to stick around for the hangover. He doesn't want to be around for the consequences of what he's doing," Rogers told Gold Money.

Rogers is among the camp that believes there is no graceful way to unwind quantitative easing. He says he does not know whether the Fed actually has a plan or not.

The only exit plan that Bernanke has talked about is to allow the assets it has purchased to mature, said Rogers. "That sounds wonderful, but its not very practical," he told Gold Money.

Bernanke made it sound quite practical during recent testimony on Capitol Hill. "In the exit process, allowing assets to roll off [the Fed's balance sheet] would be sufficient," Barron's quoted Bernanke as saying.

With regard to the mortgage bonds, Bernanke told lawmakers that the hold-to-maturity approach makes sense because "most will run off in a reasonable period," according to Barron's

"If and when [the Fed does] stop, it’s going to cause lots of ramifications in the market and lots of, perhaps even chaos, but certainly turmoil and upset," Rogers said.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

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