The United States is quickly approaching a fiscal Armageddon and the players in Washington — specifically Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke — don’t understand what is happening or know what do about it, world renowned investor and author Jim Rogers tells Newsmax.TV.
The chairman of Rogers Holdings and Beeland Interests, Inc. predicted more problems in the financial markets in the next few years and said any halt in the decline of stocks was just a “temporary bottom.”
He said that while America was not at the brink of a fiscal Armageddon right now, the nation is likely to default on its obligations in the future.
“This decade absolutely, probably sooner than this decade,” he said. “It is astonishing America is the largest debtor nation in the history of the world. This is not good news, what is going on in Washington, these guys are really, really out of it, they don’t understand what's happening and we’re all paying the price and it’s going to get worse.”
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Rogers said that despite what economists say, the country has not left the recession and a depression could happen.
“I don’t think we ever left the first recession, this is one long period of economic difficulty and America is going to pay the price for all of these mistakes.”
He placed the blame for the country’s economic ills not on Congress or the White House, but the Federal Reserve.
“The federal reserve is the main culprit because they kept bailing people out instead of letting the market clear and instead of letting people go bankrupt and start over,” he said. “If I had to blame one group I would blame the Federal Reserve under (Alan) Greenspan and (Ben) Bernanke.”
Rogers had particularly strong words for Bernanke and Tim Geithner, whom he said should have never gotten their jobs in the first place.
"They shouldn’t have gotten the jobs, they should leave, they should get somebody else who at least understands economics, finances and currencies," Rogers said.
“Mr. Bernanke has been wrong for 400 weeks in a row now,” he said. “He’s never been right about anything.”
He said Bernanke doesn’t understand currency and will continue to print money in an effort to help the economy.
“It is absolutely the wrong thing to do, but that’s all Bernanke knows,” he said. “He has spent his whole intellectual career studying the printing of money and now America has now given him the printing presses. You just wait until we have real problems. He’s going to run (the presses) just as fast as he can.”
He said that Geithner, in his previous position as president of the Federal Reserve Bank of New York, was in charge of overseeing those that the government ended up bailing out, adding, “everything he’s ever done has been wrong.”
Rogers said the economy can be repaired, noting countries like Mexico, South Korea and Russia survived similar crises; but he expects the country is in for pain.
“We’ve made some terrible mistakes in the past 40 or 50 years,” he said. “We’ve gone from being the only creditor nation in the world to being the largest debtor nation in the history of the world. We’ve created huge excesses.
“You don’t just wake up one day and say okay that’s over, that’s fine, let’s move on to the next thing. We are going to have to take some pain, admit our mistakes, have some bankruptcies, cut spending with a chainsaw at the government level. It’s not going to be fun. The more we put it off, the worse it gets.”
Rogers, who moved to Singapore in 2007 and is also known for his global treks by motorcycle and his custom-made Mercedes, said he was putting his money in commodities for no. He owns both gold and silver and predicted they will go higher. And although he worries about the quick rise of gold, he said such jumps usually lead to corrections. However, he said if it goes down he will buy more.
Rogers does not see the United States getting its triple-A bond rating back in his lifetime and thought a default of some type was inevitable.
“There are many ways to default. You can put on exchange controls. There’s lots of way to default and America will certainly default. Whether there’s ever a day where America says we won’t pay our bills, probably not. They’re more likely to give you worthless money.”
Editor's Note: Some experts fear that 50% unemployment, a 90% stock market crash, and 100% inflation are on the horizon. Watch the Aftershock Survival Summit Now, See the Evidence.
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