Jim Rogers: The Federal Reserve's Days Are Numbered

Monday, 06 Jan 2014 07:58 PM

By John Morgan

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Noted investor Jim Rogers says outgoing Federal Reserve Chairman Ben Bernanke has set the stage for the collapse of the U.S. central bank within the next decade, and has turned the nation's fiscal balance sheet into "garbage."

In a recent interview with the British financial website Mineweb, Rogers said Bernanke and his fellow central bankers in other countries have brought the global economy to the brink of disaster.

“One hundred years ago you could not have named the head of most central banks in the world,” Rogers said. “Now they're all rock stars.”

Editor's Note: Obama ‘Blunder’ Spawns Massive Profit Opportunity

Bernanke and the other central bank chiefs have been “pumping money into the markets and everybody’s singing hallelujah,” said Rogers, often a contrarian investor and critic of Fed policy.

Despite his pessimism on the global economic prospects, Rogers said he is neutral on gold for the short term. But on a longer time horizon, he expects to short junk bonds and government bonds and is very bullish on gold.

“Gold will become one of the only refuges around,” he predicted. “That's not this quarter.”

Rogers predicted that history will remember Bernanke as “the guy who set the stage for the demise of the central bank in America.”

“It's not a possibility,” Roger said, “it's a probability. People will realize that these guys have led us down a terrible path. The Fed balance sheet has increased by 500 per cent in the last five years, and a lot of it's garbage.”

In a speech to fellow economists in Philadelphia last week, Bernanke said the nation is poised for sustained economic growth as his term ends Jan. 31. The Senate Monday confirmed Fed Vice Chair Janet Yellen to succeed him.

In the speech, Bernanke said much academic research supports the notion that the Fed’s massive bond-buying program and ultra-loose monetary policy on his watch have helped boost the economy, Investment News reported.

“The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters,” Bernanke predicted.

Anil Kashyap, a professor at the University of Chicago's Booth School of Business, was one of the economists who lauded Bernanke at the conference.

“My joke is that he did not want the first sentence of his Wikipedia page to be 'Ben Bernanke, he studied the Great Depression and then caused the next one,' and so he made sure that was not the case,” Kashyap said.

Editor's Note: Obama ‘Blunder’ Spawns Massive Profit Opportunity

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