I quite agree with Rogers on most points. We surely will have horrendous inflation at some point not too far off. You will be able to tell it's inflation, and not deflation, because bread will be 5 bucks, not 10 cents. If you believe that we in the US will see horrible inflation, why wouldn't you want to buy commodities now that they have fallen sharply in price?; though, of course, they could fall lower still. I do know this: it is better to buy commodities when no one wants them and they are relatively low-priced, and sell them when everyone wants them they are relatively high-priced, rather than vice versa.
Sweden 1990s had government intervention in the banking sector. You mention SE Asia but fail to notice that the countries that intervened promptly experienced less severe effects than those that didn't. By the way the effects of the crisis lasted into the 2000s in many countries. Argentina can actually be seen as an example of letting something go bankrupt. That is what default is isn't it? They experienced a short boom afterwards but at the cost of massive unemployment and loss of access to credit that still plagues them now. Liquidationist thinking has its place but so does government intervention. You do not seem to acknowledge that. Then again the US hasn't experienced a truly disastrous economic crisis in a long time so all this pro-liquidationist anti-intervention talk is really naive chatter. You should read up on some of the things some of the finance ministers during the time of the SE Asian crisis had to say about how their attitudes changed because of the crisis. Quite a few of them were previously sold on the concept of free markets. Probably they still are but the crisis disabused them of thinking of it in black and white terms. Do you disapprove of the way the S&L crisis of the early 1990s was handled? Also what exactly is the problem with the way the current crisis is being handled in your opinion? From what I can see Bear Stearns, Lehman, Merrill Lynch, and Washington Mutual are no more. Wachovia on its way. Fannie, Freddie, and AIG are vastly diminished. I doubt holders of those stocks feel as if they got off scot free. In fact holders of AIG might have wished they had gone into bankruptcy instead. Punishment is being meted out so all the outrage seems a little hollow. Train it towards the executives who get to keep their bonuses not the owners who got shafted. Regarding Rogers: he is a gifted investor but he does seem to be a little dogmatic. I can now see why he and Soros parted ways. Soros probably couldn't put up with this inflexibility.
It's amazing how much your tune has changed. First you say we're not slowing down and now it's all hell is breaking loose. Pick a side
If you read carefully, I wasn't talking about resolving a recession slower or faster. Solving what merely would be a another regular recession is irrelevant to me. My point is if the government should get involved if it feels the national (or global) financial system is deteriorating beyond a point of no return. In our case (and the 1930s) that includes a systematic collapse of banks in a domino like fashion causing and being fueled by panic-induced bank runs. Now you tell me: When were bank runs ever "good"? Or is it in the interest of common good to try to prevent mass bank runs? Do bank runs help to resolve an economic crisis faster or do they entrench and cause more panic? You honestly need proof Rogers suggestions ("I don't care how intertwined the global financial system is, let them all fail. Nobody is too big to fail, banks have failed before and nothing happened" - and he said all that before Lehman) would have contributed to such global bank runs? Please. P.S. Anybody notice how Rogers' old partner, George Soros, is completely contradicting Rogers laissez-faire policy suggestions? Not sure if they were always from different schools, just now it's very obvious.
As I understand rogers subscribe to the ron paul camp that if you let the system 'clean' itself you get a depression, high unemployment, you clean out the bad apples then you will have prosperity for the next decades rogers liquidationist policies could actually work. but not on a democracy, maybe not even in a chinese type government due riots from the population. the liquidationist policy essentially asks from people 'can I torture you for 5 years then offer you a pension for $100,000 index ed to inflation for the rest of your life?'. Its a risk reward thing that might have different answers to different people barney frank is already talking about a moratorium in wall street bonuses. new york will be a ghost town by the time unemployment reaches 15%. the rich would be annihilated(how else they will pay for the social programs that will get them massive amounts of votes), capitalism would be essentially dead. regulation would sweep washington. history shows that populist socialist politcs tend to arise after economic disasters.(chavez, lula) rogers need to endorse paulson's socialist proposals to avoid even worse socialists outcomes down the road
If we consistently follow a policy of not bailing out failed institutions it would be better imho. Not letting things find the correct level in 1991 (S&L), 1994(Orange County, Tequila), 1997(Thai Bhat), 1998(Russia LTCM), 2000(dot com), 2002(misc.) and then goosing the markets from 2002-2007 especially housing are the reasons we have such a big problem. IMHO
another guiness. Not sure who is correct. I guess I will have to do some reading. But interesting discussion.
I missed the sell signal. Without an entry and exit all you have nothing. Rogers impersonating the Invisible Man and his p&l color
do you want jim to wipe your ass as well? think about it - why would anybody give you entries and exits? in other words it doesn't matter if he trades as long as he makes sense. your turn is how to use him for your entries/exits...
very well said they are too heavily politicized and heavily biased in favor of the Republican agend instead of being NEUTRAL bias on news, presentations and handling people that they invite on their show to comment and validate their viewpoints. this is just another example of their worthlessness.... CNBC --just say NO!