Wednesday, February 11, 2009

Banks Rescue Will 'Make Things Worse': Rogers

Banks Rescue Will 'Make Things Worse': Rogers

10 Feb 2009 | 04:21 AM ET

The new financial rescue plan may not work and could even make things worse because it plunges the US further into debt and it is designed by the same people who failed to forecast the crisis and take measures, legendary investor Jim Rogers told CNBC Tuesday.

Treasury Secretary Timothy Geithner will unveil a long-awaited package of measures to help the financial sector at 11 am New York time.

But Rogers said Geithner, who was president of the New York Federal Reserve Bank, "has been dead wrong about everything for 15 years in a row," and so was President Barack Obama's economic advisor Lawrence Summers, who acted as Treasury Secretary at the turn of the century.

"It is mind-boggling to me," Rogers told "Squawk Box Europe."

"If I were on your show 15 weeks in a row and was wrong, you'd probably never invite me back. These guys have been wrong year after year after year consistently and here they are making the same mistakes again. This is not going to solve the problem, it's going to make it worse."

He said he was not contemplating investing into financials, as bankruptcies were still possible, and banks were still trying to find out how affected they were by the crisis.

"What's happening is they've all panicked, cutting back everything, trying to see what they've got," Rogers said.

Big companies such as AIG or Fannie Mae as well as other US banks don't know how to value their assets, he said.

"Everybody is frozen, trying to figure out ok, what are we worth, what do we do?"

In addition, the recent shifts towards protectionism are harmful, Rogers warned.

"This is very dangerous, that's what caused the great depression in the 1930s. If it happens again, then you'd better sell all the stocks, you'd better sell a lot of everything and bunker down," he said.

"We already have a lot of social unrest developing. If protectionism comes back, you'd better be really, really careful," Rogers added.

© 2009 CNBC.com

URL: http://www.cnbc.com/id/29114947/

11/02/2009
tjhinkh: Central bank all over the world are printing money as fast as they can. This has never happen before in history. Throughout history, we know when local central bank print money, it lead to inflation. So Jim 'knows' (that is his exact word) that there will be serious inflation down the road. Because of this, Jim periodically buy gold.

IMF may sell gold to rescue everybody else. Gold may go down. Jim thinks that this would be the bottom for gold. He hope that that the IMF would do that and when it does not have enough money, it will be dissolved.

May not see new mine open in 10-15 years.
Still holding to USD. He suspect that he will sell them by this year.


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