Veteran investor says Obama stimulus package only making economic crisis worse
Paul Joseph Watson
Monday, February 16, 2009
In an interview with Sir David Frost on Al Jazeera television, veteran investor Jim Rogers pinned the blame for the economic crisis squarely at the feet of the Federal Reserve, and said that the World Bank and the IMF should be abolished, not given more power, if a recovery is to be made.
Rogers strongly slammed Obama’s stimulus package, pointing out that more good money was being thrown after bad, and that the bailouts were only making things worse. The veteran investor said that the U.S. was following the same disastrous policies as Japan in propping up companies that should be allowed to fail, and that the same consequences would be reaped as much as 20 years into the future.
“The way the system is supposed to work, when times like this come, the solid people, the competent people, take over the assets from the incompetent people and then you start over again from a sound base, this is what South Korea did, this is what Russia did, and they did fine. What they’re doing this time is they’re taking the assets away from the competent people and giving them to the incompetent people and saying now you compete with the competent people with their assets and their money – it’s terrible economics and it’s not going to work, it hasn’t worked before and it’s not going to work this time,” said Rogers.
Rogers said that price had to be paid for 15 years of excess, but that the crisis could have been overcome in two or three years had zombie companies and banks been allowed to go to the wall.
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“The central bank in the United States, the Federal Reserve, would not let people fail,” said Rogers, pointing out that had former Fed chairman Alan Greenspan let Long Term Capital Management fail in 1998, both Bear Stearns, Fannie Mae and Lehman Brothers would still be in business, “because people would have taken such a hit, and so many people would have been fired, these bozos that were doing this sort of thing, that you would not have had these problems.”
“The way the system is supposed to work is when you make a mistake you go broke, he refused to let people go broke, he saved his friends and now we’re all having to pay for them,” added Rogers.
Asked if he had any respect for the World Bank and the IMF, Rogers responded, “Zero….the best thing that would happen would be if we could abolish the World Bank and the IMF, they were set up in 1945 and ’46 with very sound goals and very sound aspirations – they have far far far left behind those aspirations and goals, they’re now run by people who do little more than take care of themselves….look at their projects and you would be mortified.”
In response to a question about what if any sectors would be profitable amidst the crash, Rogers advised people invested in stocks to “get yourself a tractor and learn how to farm”.
Watch the clip below.
This article was posted: Monday, February 16, 2009 at 12:02 pm