Jim Rogers to Moneynews: ‘We Should Be Terrified’ Because Fed Tactics 'Going to End Badly'

Thursday, 14 Feb 2013 04:48 PM

By Dan Weil and Kathleen Walter

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The Federal Reserve’s massive easing campaign will produce a crisis for the economy, says famed investor Jim Rogers.

“The central bank has been printing staggering amounts of money, and the government has been spending a lot of money because they wanted Mr. Obama to get re-elected,” he tells Newsmax TV in an exclusive interview. “That's still spilling over into the economy.”

Central banks across the world are matching each other virtually ease for ease, notes Rogers.

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“We should all be terrified of what has happened, because governments around the world are printing huge amounts of money and spending huge amounts of money,” he says. “The debts are going up like a rocket. This is going to end very badly,” notes Rogers, author of the new book “Street Smarts: Adventures on the Road and in the Markets.”

Editor’s note: To order ‘Street Smarts’ at great price — Click Here Now.

And how long can Fed easing continue? “As long as the printing press is run,” Rogers suggests.

“Fed Chairman Ben Bernanke has said he's going to keep doing this until 2014 or 2015. The man doesn't know anything about economics. He doesn't understand finance or currencies. All he understands is printing money.”

Rogers doesn’t buy President Barack Obama’s claim that the economy has improved over the last three years. “Do you believe the government?” Rogers asks rhetorically. “If you are going to believe the government you are going to go bankrupt.”

All governments lie — Democrat and Republican, domestic and foreign, he notes. “We're in worse shape than we were before Obama,” Rogers adds.

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

“But even if things are better, it's only because the debt has much more than doubled in the last four years since he got there and because they printed a lot of money.”

Rogers excoriates Obama for his quest to raise taxes further. “No country in world history has improved itself by raising taxes,” he explains. “If you cut taxes and if you cut spending, then people will do a better job.”

Rogers has been bullish on commodities for years. “I own them all,” he says. “I own more agriculture than others.” If the world economy improves, there will be commodity shortages.

And if the economy doesn’t get better, “they are going to print even more money,” Rogers maintains. “You have to protect yourself by owning real assets, and you also make money by owning real assets.”

He still owns gold, though he says he has hedged a bit of his position for two reasons.

First, the precious metal has appreciated for 12 years in a row. “Now, I don't know of any asset that has been up 12 years in a row without a down year, so that is worrisome,” Rogers notes. “It's overdue for a nice correction, so maybe we'll get it.”

Second, a lot of the recent buyers of gold are speculators. “That's usually a worrisome sign,” he says. So Rogers isn’t buying or selling gold, though if it falls further, he says he will buy again.

After bouts of weakness over the past 4 ½ years the euro hit a 14-month high against the dollar last month. But, “I suspect that [the euro] will come back to haunt us again,” Rogers explains. “There are serious problems in Europe.”

Editor’s note: To order ‘Street Smarts’ at great price — Click Here Now.

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