Posted on 10/11/2008 4:39:06 AM PDT by billorites
Markets do not trust the governments' plans to keep struggling banks alive and investors will only calm down when the companies with bad assets are allowed to go bankrupt, legendary investor Jim Rogers, CEO of Rogers Holdings, told CNBC on Friday.
"The way to solve this problem is to let people go bankrupt," Rogers said.
"Then you will hit bottom and then you start over. The people who are sound will take over the assets from the people who aren't sound and we will start over. This is the way the world has worked for a few thousand years."
The current rescue plans, which will force governments to issue more debt, print money and flood the markets with liquidity, will flare up inflation after the crisis is over and will create worse problems, Rogers warned.
"We're setting the stage for when we come out of this of a massive inflation holocaust," he said.
And the plans are unlikely to fend off a severe economic downturn, as the crisis starts affecting all walks of life.
"We had the worst excesses we had in credit markets in world history. We're going to have to take some pain," Rogers said.
"Many people bought 4-5 houses with no money down and no job… you think we'll just say well, that's too bad, we'll start over and nobody loses their job? Be realistic."
People should not look to the upcoming G7 meeting with the hope that the leaders of the strongest economies will find a solution.
"What they (G7 leaders) need to do is go down the bar and leave the rest of us alone," Rogers said.
Economies who did not take part in the subprime bonanza are likely to suffer along with Wall Street and the developed economies as the crisis unfolds, he warned.
"What about all the people in countries that minded their manners, saved their money, didn't get overextended and now all of a sudden they're being asked to bail out a bunch of guys on Wall Street who were incompetent at best and some of them crooks?"
"I thought it outrageous that anybody has to step in a bail out a bunch of 29 year olds driving Maseratis," he said.
There are not many safe havens in the volatile markets, he said.
"I have an enormous amount of cash and I've been using it to buy more Japanese yen, more Swiss Francs, more agricultural products… there's a liquidation phase going on, where everything is being liquidated. They're selling everything in sight."
"In a period like this the way you make money coming out of it is to own the things were the fundamentals have not been impaired," Rogers added.
BUSH’S FAULT...
They will ride Bush into the next 12 maybe 16 years....
its over for Conservatives.... Obama attacks the core Conservative principles and is hearlded as the second coming.
There. Fixed it.
Yes, he is right, about the inflation at least. People on fixed incomes will be hard hit by super inflation. not to worry though, the government can just print more money.
Zimbabwe, U.S.A. All we need to complete it is a dictator for life - barak messiah.
Why isn't this guy running for President?
ML/NJ
Past is Prologue....
it’s sad. we don’t have a pro-business conservative that is running for president. the person we have should find a picture of his father-in-law and think of the principles he used to start his beer empire.
It’s ironic: the libs believe in darwinism. But they don’t like seeing it in practice.
I’ve always thought that’s what Obama would do for 8 years. Attack Attack Attack GWB and blame EVERYTHING on GWB.
This is why GWB ticks me off when he let them get away with their smears.
No person is on fixed incomes. They choose to be. That is their choice.
Anyone who has seen the government devalue a high school degree. Has seen even the devaluation of the word ‘conservative’ such that the Bushs or Romney call themselves conservative. Anyone that has seen the moral devaluation that a fat pig sodomised like Barney Frank can be the head of government finance.
Anyone that has seen a 30 billion dollar a year intel bureaucracy that watched Al Queada for a decade and failed and NO ONE WAS FIRED.
Anyone that has watched male devaluation that only one plane in which the males attacked a bunch of little guys with box-cutters.
Please.
People deserve to be eating cat food.
These governments, lousy to the core (and that is an insult to hardworking, blood sucking lice) and anyone that I should care about, depends upon them?
You can not be pro business and big government. Business is liberty, freedom to act in the economic sphere as you like, or not. To succeed or fail, or not.
No liberty, no business.
As liberty decreases, what you think of as business is more of an government allowed racket.
If you are dependent upon government permission, stamps, licenses, permits, regulators.........you are not in a free enterprise system.
When the largest financial institutions are ORDERED to give their money, in the form of loans, to people that will not pay back,,,,ordered by the government......do you think little old YOU are free?
This nation is like a cattle care of Jews on the way to the death camps. We’re hoping the other guy will get it, not us, and we’ll get to keep our trinkets, all the while we are prisoners and and won’t do anything about it.
/rant off
I can't agree. The left can make hay out of a thing pretty easily but they CANNOT lead us anywhere good. It only took Carter 4 years to get us deeper into hell than we'd ever been before. Obama isn't Carter and it isn't 1977 anymore. If the left gets in this time they will try to take out talk radio and the Internet and they will use authority to obviate their opponents.
A president Obama won't finish his first term. Before two years into his term this nation will be firing live rounds at one another.
An Obama presidency will fail spectacularly
Don’t blame the greedy for being greedy. It’s what they are, plain as day.
Blame the government for taking money/wealth from one citizen and giving it to another. From one generation, as of yet unborn, and giving to the living.
It’s a form of financial pedophilia, debt child rape.
I’m not sure, anywhere in the Old Testament, Greek or Roman history, that I have ever read of any people ever selling their children into slavery.
I trust you will do the right and honorable thing.
[”The way to solve this problem is to let people go bankrupt,” Rogers said.]
Agreed.Unfortunately, the politicians have stolen our monies and already destroyed America’s future economy with the 1 trillion dollar bailout of corrupt banks. This may be the largest transfer of American assets to forign nations ever engineered by the corrupt politicians of Washington DC.
Think about it, how does one get out of debt by adding to the debt. Answer, they don’t!
We have been robbed by the elitist fool politicians of America and you know it will get worse for American taxpayers.
And, what the democrats would like us to believe is that Business is evil, greedy. Truth be told “Business” is the people at work. It is us. Let’s stop letting the marxists get away with ripping our society apart.
[Why isn’t this guy running for President?]
Democrats and republicans can not handle fiscal conservatives who believe that one should not spend more than they take in. The credit card mentality has destroyed our economy and will get worse.
Don’t blame the greedy for being greedy. It’s what they are, plain as day.
[Blame the government for taking money/wealth from one citizen and giving it to another. From one generation, as of yet unborn, and giving to the living.
It’s a form of financial pedophilia, debt child rape.
I’m not sure, anywhere in the Old Testament, Greek or Roman history, that I have ever read of any people ever selling their children into slavery.]
Amen to that. Stupid is as stupid does and America is run by stupid people.
“The way to solve this problem is to let people go bankrupt,” Rogers said.
WRONG. The way to solve the problem is to abolish the federal income tax now, replace it with a national sales tax, and drastically cut government spending. A long list of federal programs and some federal departments should be eliminated.
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