Tomorrow is one of the biggest days in United States central banking history. Federal Reserve Chair Janet Yellen will either raise interest rates for the first time since 2006 or the Federal Open Market Committee (FOMC) will decide to hold off on any rate hike once again.
Jim Rogers, chairman of Rogers Holdings and co-founder of the Quantum Fund, thinks Yellen really has no idea what she’s doing. Instead, she should just abolish the central bank and step down. In fact, according to Rogers, they all should.
Speaking in an interview with the Fox Business Network on Wednesday, Rogers was pretty candid in his feelings about the U.S. central bank. He belives the Fed has created widespread panic and have eased monetary policy all over again.
“She [Yellen] doesn’t know what she’s doing. She shouldn’t be there. She is an academic who has no clue,” he told the news outlet. “None of them do… They should abolish the Federal Reserve and resign.”
Rogers explained that the near-zero interest rate policy is manipulating and distorting the markets. He added that it is also hurting those who save their pennies and those who live on their savings (I.E. seniors and retirees).
“Low interest rates are destroying the people that save and invest. Pension plans, trust companies, insurance companies — we’re destroying all the people that save their money for a rainy day and now they are being ruined… to bail out people who get it wrong — who ran up huge debts who didn’t have the money,” he said. “We are ruining the country with this idea.”
What does he think the Fed will ultimately do? The Fed will raise rates, markets will go down and there will be people telling the Fed “you must save civilization.” This will lead to panic and the Fed will come to save the day by easing monetary policy once again.
“We haven’t had an economic slowdown for over 6 years in the world — we’re overdue… and the next time it comes it’s going to be a disaster because the debt is so much higher everywhere,” Rogers stated.
“Eventually the market is going to raise interest rates and that’s when the disasters work… when the central banks have no more control. In 2008, the Chinese had a lot of money saved up so they can spend a lot of money to help save us. They’ve got debt too themselves now, the debt that’s gone up there is horrendous, that’s going to be a big problem next time.”
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