Jim Rogers - His views on Ben's handling of the crisis

(Q): Many experts don’t agree with – at the very least don’t understand – the Fed’s current strategies. How can our leaders think they’re making the right choices? What do you think?

Rogers: Bernanke is a very-narrow-gauged guy.  He’s spent his whole intellectual career studying the printing of money and we have now given him the keys to the printing presses. All he knows how to do is run them.

Bernanke was [on the record as saying] that there is no problem with housing in America.  There’s no problem in housing finance.  I mean this was like in 2006 or 2005.

(Q): Right.

Rogers:  He is the Federal Reserve and the Federal Reserve more than anybody is supposed to be regulating these [financial institutions], so they should have the inside scoop, if nothing else. 

 (Q): That’s problematic. 

Rogers:  It’s mind-boggling.  Here’s a man who doesn’t understand the market, who doesn’t understand economics – basic economics.  His intellectual career’s been spent on the narrow-gauge study of printing money. That’s all he knows. 

Yes, he’s got a PhD, which says economics on it, but economics can be one of 200 different narrow fields.  And his is printing money, which he’s good at, we know.  We’ve learned that he’s ready, willing and able to step in and bail out everybody. 

There’s this worry [whenever you have a major financial institution that looks ready to fail] that, “Oh my God, we’re going to go down, and if we go down, the whole system goes down.”

This is nothing new.  Whole systems have been taken down before.  We’ve had it happen plenty of times.

(Q): History is littered with failed financial institutions.

Rogers: I know.  It’s not as though this is the first time it’s ever happened.  But since [Chairman Bernanke’s] whole career is about printing money and studying the Depression, he says: “Okay, got to print some more money.  Got to save the day.”  And, of course, that’s when he gets himself in deeper, because the first time you print it, you prop up Institution X, [but] then you got to worry about institution Y and Z.

I'm really impressed with his insight on the fear that's set in about the biggest men in the American Society being scared about how a single institution will lead to the downfall of their entire society. What an extremely narrow understanding of things! To me it seems more like the Fed guy is being a "yes-man" to his political bosses and lacking (a) either, the intelligence to understand the problem , (b) Or, The spine to stand up for the right thing to do. If the leaders of such a big society are going to be scared of one institution bringing down their society then their idea of the strength of their society is extremely poor, and the men themselves come across as extremely weak-kneed.