Sunday, March 10, 2013

"We're wiping out the savings class globally"

That's according to investor and financial commentator Jim Rogers in a podcast interview with Chris Martenson of PeakProsperity.  You can listen to the whole thing here, or read a transcript of it, which I highly recommend.  In case you don't have time to do so, here are a few important excerpts.

[For] The first time in recorded history, Chris, we have nearly every central bank printing money and trying to debase their currency. This has never happened before. How it’s going to work out, I don't know. It just depends on which one goes down the most and first, and they take turns. When one says a currency is going down, the question is against what? because they are all trying to debase themselves. It’s a peculiar time in world history.

. . .

... throughout our history – any country’s history – the people who save their money and invest for their future are the ones that you build an economy, a society, and a nation on. In America, many people save their money, put it aside, and didn’t buy four or five houses with no job and no money down. They did what most people would consider the right thing, and what historically has been the right thing. But now, unfortunately, those people are being wiped out, because they are getting zero return or virtually no return on their savings and their investments. We’re wiping them out at the expenses of people who went deeply into debt. People who did what most people would consider the wrong thing at the expense of people who did the right thing. This, long-term, has terrible consequences for any nation, any society, any economy.

Chris Martenson:  But what are some of those consequences as you see them?

Jim Rogers:  If you go back in history, you'd see what happed to the Germans when they wiped out their savings class in the 1920s. It didn’t lead to good things down the road for Germany. It didn’t lead to good things for Italy, which did the same thing. There were plenty of countries where it wiped out the people who saved and invested for their future. It’s usually a serious, political reaction, desperation in some cases, and looking for a savior and easy answers is usually what happens when you destroy the people who save and invest for the future.

. . .

[The Federal Reserve is] printing money. That’s why bonds are up. They’re buying gigantic amounts of bonds. That’s why stocks are up. They’re flooding the world with money. It’s got to go somewhere. They say they're going to wait for whatever inflation numbers they want. Well, you’ve got to remember that the inflation numbers they control. There are those, including me, who say the inflation numbers that are being reported are a sham. They're not accurate. But since the Federal Government can control the Fed, they reported inflation numbers that make them look good. They have many reasons to, including Dr. Bernanke.

I don't think they have any idea what they're doing. They say that when inflation gets to a certain level they might do something. They say when unemployment gets to a certain level they might do something, and maybe they will. But on the other hand, let’s say that they start reversing themselves. It’s certainly going to cause a lot of excitement and a lot of interest in the markets if and when they start reversing themselves.

You’ve got to remember that the Federal Reserve – the central bank in America – has quadrupled its balance sheet in the last few years. I don't think that’s ever happened in recorded history, either. A lot of the stuff they have on their balance sheet is garbage. So, if and when they start reversing, it’s going to cause more confusion or more interesting times in the markets.

There's more at the link.

There's not much one can add to that, is there? - except to say, prepare yourselves for the oncoming disaster.


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