Jim Rogers Sees Worse Recession in 2013-2014, Says Fed Already Printing More MoneyBusiness Intelligence Middle East
Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers reckons the Fed finds it embarrassing to announce QE3 as all previous attempts have failed, but says the central bank is already printing more money. He predicts another recession: "You should be very worried about 2013-2014." The printing has started Speaking to India's ET Now on Monday, Rogers said: "I do not know if they will announce it. I know they are going to print more money. They already are." "If you look at their balance sheets, you will see that something is happening, assets are building on their balance sheets," he explains, adding that these "are not coming from the tooth fairy." So, what could the Fed's reasons be for not yet announcing QE3? "Egg on their face," according to the famed investor.
"They are a little bit embarrassed because they announced QE1 and QE2, and it did not work. So they may try to discuss it. They may just continue to do it without getting egg on their face again, but they are going to print money," Rogers told ET Now. "This is all they know to do," he added. QE3 debate In his widely anticipated speech at Jackson Hole last week, Fed Chairman Ben Bernanke said the U.S. economy was "far from satisfactory" and used the forum to defend unorthodox policies such as bond purchases. Bernanke also made the case for further action to reduce an unemployment rate that he called a “grave concern.” Bloomberg reported that four Fed presidents have come out in favor of an open-ended strategy for bond buying, with three calling for the program to begin now. "Rather than specify a fixed amount of bonds to purchase by a certain date, such a strategy would leave the Fed able to announce a pace of purchases that it could adjust as the economy gets closer to Bernanke’s goals." "The simple truth," counters Peter Schiff, CEO & Chief Global Strategist at Euro Pacific Capital, "is that our economy has a disease that all the quantitative easing in the world can't cure. And while the wrong medicine may make us appear healthier in the short term, we will continue to deteriorate beneath the surface."
"Because the Fed has kept interest rates too low for too long, Americans have saved too little and borrowed too much; consumed too much and produced too little; and imported too much and exported too little. Too much of our labor is devoted to the service sectors and not enough to goods production. Too much capital goes to Wall Street speculators and not enough to Main Street entrepreneurs," Schiff wrote in his economic commentary on Friday. Europe rescue plan As to Europe, "there are going to be more problems as nobody is dealing with the problems," reckons Rogers. "The solution to too much debt is not more debt. So now you are going to have plenty more problems coming out of Europe, he told ET Now. The European Central Bank unveiled Thursday a fresh program to buy bonds issued by heavily indebted eurozone countries, under strict conditions, in a widely-anticipated bid to save the euro. ECB president Mario Draghi unveiled a new central bank instrument known as Outright Monetary Transactions (OMTs) in secondary markets for sovereign bonds, but stressed that governments would also have to fulfill strict conditions. September 11, 2012 Jim Rogers has taught finance at Columbia University's business school and is a media commentator worldwide. He is the author of Adventure Capitalist, Investment Biker, Hot Commodities, A Gift to My Children, and A Bull in China. See his website. Copyright © 2012 Business Intelligence Middle East
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