Famed author and contrarian investor Jim Rogers spoke with Kerry Lutz of Financial Survival Network about the absurdity of central banks being run by clueless academics. He says that most of the world is under an illusion of prosperity and that our reliance on credit will have devastating consequences. Rogers also echoes Peter Schiff’s message in his latest Gold Videocast — the US is no longer a bastion of freedom. Investors should look to hard assets and emerging markets in countries that have far less debt and more economic freedom..
Audio Length: 00:18:24
Follow along with this partial transcript:
Kerry Lutz: What can you tell us about what’s going on in the world right now? It seems like things have gone upside down.
Jim Rodgers: Hope it’s only upside down. I’m afraid it’s going to be worse than that. This is the first time in recorded history you’ve had all the major financial banks printing huge amounts of money at the same time. You’ve got this gigantic artificial ocean of liquidity floating around and it’s going to end some say, Kerry. When it does, all of us are going to be sorry and we’re all going to suffer.
KL: The artificial wave of liquidity, basically, it’s got to come to an end. But nobody wants to pull the plug, nobody wants to be the first to do it. Somebody’s going to be forced to do it, aren’t they. There’s going to be an event, I guess. We all know an event is going to happen. We don’t know what this event is going to be. But, it’s going to happen, isn’t it.
JR: It’s very unlikely central bankers are going to come to their senses. Let’s just suppose for a minute that a miracle happens and one of them says, “Ok guys, we’ve got to put a stop to this.†What will happen is that somewhere along after that the markets will start reacting, and reacting badly. Then they’ll all call the central banks and say, “Oh my gosh, you’re killing us! You’re ruining Western civilization. You’re ruining the world.†The central banks are made up of bureaucrats and academics who don’t know any better, they’ve never had a job, they’ve never been in the market. They will give up, they will panic, and they will say “We’re sorry, we’ll come to your rescue.†Then we’ll have another rally. That may be the last bull one, because eventually, Kerry, your scenario is right. Eventually the market is going to say, “We don’t want this garbage anymore. This is insane. This is absurd.†Then we’re going to have an event. A serious event. And/or I guess the third possibility is that we have some kind of foolishness like a war or something that nobody expects, and that could be the event that precipitates it. I hope it doesn’t happen, because war is never good, but second, if it does happen that way, the central bankers will say, “It wasn’t our fault. We didn’t have anything to do with the problem.â€
