Jim Rogers on Bernanke: "He is a total fool"

Discussion in 'Wall St. News' started by makloda, Nov 18, 2007.

  1. http://www.bloomberg.com/apps/news?pid=20601103&sid=aXH9wCx1oydw

    Jim Rogers Urges People to Sell U.S. Dollar Holdings

    By Aaron Pan and Paul Gordon

    Nov. 15 (Bloomberg) -- Investor Jim Rogers urged people to get out of the dollar and says he expects to be rid of all his U.S. currency assets by summer next year.

    ``If you have dollars, I urge you to get out,'' Rogers said in an interview from Singapore. He is chairman of New York-based Rogers Holdings, formerly known as Beeland Interests Inc. ``That's not a currency to own.''

    The dollar fell 9.5 percent this year against a basket of six major currencies as a housing slump slowed the economy and losses stemming from subprime mortgage defaults spread among U.S. banks. Rogers, who said last month he was shifting out of all his dollar assets, plans to buy commodities, Japan's yen, the Chinese yuan and the Swiss franc.

    Interest rate futures traded on the Chicago Board of Trade show a 72 percent chance that the central bank will lower its target rate for overnight loans between banks to 4.25 percent on Dec. 11, its third reduction this year.

    Rogers, who predicted the start of the global commodities rally in 1999, criticized Federal Reserve Chairman Ben S. Bernanke for comments on the currency before a congressional committee on Nov. 8.

    ``He is a total fool,'' Rogers said. ``He said Americans who buy only American goods are not affected if the value of the U.S. dollar goes down. I was terrified.''

    Bernanke said the only effect of a weaker dollar on a typical American with their wealth in dollars, buying consumer goods in dollars, would be ``their buying powers, it makes imported goods more expensive.''

    Rogers said that's not right.

    ``If you only buy American products and the dollar goes down, the price of oil goes up, copper goes up, wheat goes up,'' he said. ``That affects you. He doesn't understand the economy as far as I can see.''
  2. Jim Rogers appears to be the bigger fool. Even though the US has a trade deficit, it still BY FAR the biggest exporter in the world. The declining dollar means more exports which should increase the GDP for the US, thus creating new jobs through the increased demand for US goods.

    This then has the long-term effect of stabilizing the dollar and increasing its value through a higher demand for US dollars.
  3. he is pumping his positions and pushing his agenda.

    nothing more, nothing less.

  4. ronblack


    In principle I agree. You may find this article interesting:


    It is hard to know where politics end and economics start. But Jim Rogers is another manager whose success rate in making predictions is not better than an astrologer's. In the longer term if he makes many of them he will be right 50% of the time. The only problem is he is not going to make it as a fund manager past the second prediction or past the third. He was right the first time and made billions. Now he is wrong. Actually, he is selling dollar denominated assets at the bottom of the dollar decline to move to an economy that will go into recession pretty soon.

    People who do not understand economics think that a trade deficit is bad. It is bad for poor economies. It's actually good for a 14 Trillion economy because it finances future growth. Actually, it is the ones who accumulate dollars that have the problem. They can only invest them back in USA otherwise, if they try to diversify them, the dollar will decline and their goods will become even more expensive and they will go into recession for sure. China now understands that growth has it's dark (dollar) side.

    I think Rogers should show Bernanke some respect. Because he happened to be right once does not mean he will be twice. There is a huge drawdown with his name on it coming his way, like for every trader who tries to predict instead of just managing risk.

  5. weld1


    germany is the biggest exporter in the world:D
  6. So he is recommending an investment in something he has his own money in. Isn't this what all the portfolio managers interviewed on tv do ? What is his agenda you speak of?
  7. The US WAS the biggest exporter. China passed us in 2006. In 2001 the US had double the amount of exports as China. You can almost hear the sucking sound of good jobs leaving the US?
  8. ronblack


    Just before they sell assets they need to attract liquidity. It's standard procedure. Quite possible Jim Rogers will be buying dollars after that.

  9. empee


    This is the kind of moronic stuff that NeoCons/Currently Repubs try to pass as reality. At best its "lawyering" up facts/distorting reality, and at worst its immoral.

    For example, the article justifies the trade deficit because we are "financing future growth", isn't that the same as leverage? What if we DON'T grow? Than, we still have to "pay it back" with interest charges (can be invisible like devaluation of currency)

    Secondly, the article mixes the fact that we use a fiat currency with an actual exchange of real money. For example, if I swap a pig for 2 hens, the pig still has value determined by the marketplace. The article says that since we swap dollars for 2 hens, the people holding dollars are forced to repatriate the currency back to the USA. (ie forced to sell the pig back to someone in the USA, not true, the price is whatever is determined in the marketplace not limited to the parties involved). Even more alarming, we are swapping nothing (Dollars, which we can print at will, lets assume have no value) for 2 hens. The is the point of the article is that since we are swapping something that is worthless for something that has value, the person holding the worthless object is also beholden to us because we can set the value of what they are holding. (Plus we get 2 hens for essentially nothing) THIS IS TRUE, but is also TRUE THAT IT THE MAJOR STORE OF VALUE (ILLUSORY) THAT WE ARE USING WITHIN OUR OWN SOCIETY! We can't devalue dollars to Chinese without devaluing the dollars to our own people, although the article connotes that this is possible (I guess similar to Bernanke claiming that a weak dollar isn't inflationary as long as you don't buy imported goods, even tho the cost of producing the same goods in the USA goes up up up .. ie if we want to buy bacon we have to buy a pig (which costs more to feed since USD is weaker -> higher prices). A farmer can sell his pig to whomever will pay the most, it takes more dollars to be competitive than someone from Canada right now so.. our bacon costs a bit more to be competitive bidding on assets).

    Its true that in the short-run (as the market adjusts) there are edges, ie crude can rise but in the short run prices at the pump may not if there is excess refining capacity, but thats a short-term situation. But over time, it will adjust.

    The saddest part is that Americans are willing to eat whatever their political operatives can concoct, no matter how bad the lunacy. A weaker dollar is good! Well, if its so friggin fantastic, why did we just start devaluing, and why don't we devalue to prosperity already!?!?

    A trade deficit can indeed be positive if the net value creation in a society is so great it can justify the losses in exchanging good abroad, for example.
    (Ie "financing growth" because we even tho we lose in the exchange of goods abroad, we are growing faster with those goods here, so we lose in exchange for oil for example, but we use that oil to create more net value than the loss in the exchange of getting it).

    But that requires real growth at home, in nominal terms. It just ain't so. Put another way, are we really utilizing goods that much better than the rest of the world? Maybe, but markets tend to adjust. (... and thats if we ARE utilizing the resources better).
  10. Go read some interviews he has given. Read the first Market Wizards book. Read his Investment Biker books. Jim Rogers isn't a pump and dump quick buck artist. He invests for years and decades.
    #10     Nov 18, 2007