Jim Rogers on The Financial Reform
Campaign for Liberty's Kevin Brett interviews investor and financial commentator Jim Rogers on the recently-passed Dodd-Frank financial reform bill, the effects of government interference in the marketplace, and some steps he would take to get the economy back on track.
Jim Rogers : Well, it's part of the trend where the US for whatever reason, both consciously and unconsciously, is driving the business out of the US. There's a transition now from the US to Asia in the financial world and the economic world. The largest creditor nations in the world are now in Asia: China, Korea, Taiwan, Hong Kong, Japan, Singapore, you know who the largest debtor nations in the world are.
In the 1920s and 1930s, there was a move from the UK to the US, exacerbated by a financial crisis and by many mistakes by UK politicians. Well, the same is happening now. People didn't notice what was happening in the 20s and 30s; apparently people don't' notice it now, but 10 years ago, most of the large IPOs in the world were done in New York; now very few of them are. America's driving the business out in many, many ways, and that's going to continue. I don't particularly like saying it; I don't particularly like seeing it happen. I'm an American. I pay taxes in America like you do, so it's not good, but it's making America's situation worse, not better.
Jim Rogers : They're leaving the market alone. In America, the government and the central bank especially, have interfered with the market several times. Under Alan Greenspan, whenever things got difficult for somebody, they called up Greenspan and said, "Save me, save me, save me!" And the government interfered with the market. Bernanke did the same thing. Rather than letting the market do what the market's supposed to do, i.e. which is let bankrupts go bankrupt, clean out the system, start over, Greenspan stepped in and said, "No, no, no, we don't want the market to work. We want to determine who wins, who loses, and what's going to happen in the world." He bailed out the market when long-term capital management came; he bailed out after the dot-com. Every time something happened he came in, interfered with the market, and would not let the market do its fundamental work, which is to sort itself out. Unfortunately, we are all now paying the price. Bernanke is of the same yolk, he's been doing the same sorts of things. So you and I, and, well, the world, not just every American taxpayer, the world is paying the price for all of this.
Jim Rogers : Oh, sure. I would abolish the Federal Reserve. I would cut taxes. I would cut spending in a draconian manner. A very draconian manner. The idea that you can solve a problem of too much debt and too much consumption, with more debt and more consumption, defies comprehension. I can't believe that grown-ups would say words like that out-loud. But that's what they seem to think - I don't know if they really believe it's going to work, but they just don't know what else to do, and you know they're all doing... for the next elections, so they're making things worse. There are plenty of ways to solve the problem. You let the people who go bankrupt go bankrupt. You let Fannie Mae and Freddie Mac go bankrupt, go out of business. You let AIG go out of business. You stop bailing everybody out. The Japanese tried it our way in the early 90s; they refused to let anybody go bankrupt, and they still talk about the 1990s as "the lost decade." Now they're talking about this decade as the second lost decade. Japanese stock market today is 75% below where it was in 1990. That is not a typo. It is down 75% in 20 years. Can you imagine if the New York Stock Exchange, or if the DOW Jones to use a better example, were at 4000? I don't think people would be very happy. Well, that's the equivalent of the situation in Japan right now. It didn't work in Japan; it's not going to work in the US. It's going to lead to more problems. People say, "Oh, our poor grandchildren! Look at all this debt!" No, no, no, it's not our poor grandchildren; it's us! This is a current problem! This is a problem, even our parents, if they're still alive, forget our grandchildren; our parents are going to be suffering, and our grandparents if they're still alive! This is a current disaster for all of us....etc...
this is a very approximate and partial transcript not to be taken literally....
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