We can never get suitable Jim Rogers around here…. truth and reality are in short supply and that is one of the few guys who brings it, and since he has a lot more credibility than no name blogger named I, possibly society will listen. next again, they don’t listen to Soros, Robertson, Grantham, Schiff, or Paul. [Feb 18: Jeremy Grantham has some Sobering Words for “2nd Half” Recovery Crowd] possibly we’re just hopeless….

SeekingAlpha.com has a nice 3rd party interview here, I’d recommend to read the whole thing but due to length I’ll just bring by some of the key blurbs:

• Although the United States faces perhaps its most daunting economic challenges in at least a generation, “in America, most public do not understand that there is a problem.” (Amen, that’s my top frustration)
• Because of these weak-dollar efforts - as well as the billion-dollar bailouts - “America is now the largest debtor the world has ever seen.”
• Although the central bank seems intent on engineering a U.S. economic rebound by creating an ultra-weak dollar, no country in history has ever emerged from a serious financial crisis by “debasing its currency.”
• The bottom line: The strategies that the central bank is currently employing are nothing short of “outrageous,” Rogers said.

Below is part of the Q&A

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Keith Fitz-Gerald [Q]: There’s a confluence of money flowing into and around China. Do you believe that the U.S., with all its current problems, will get left out?

Jim Rogers: Absolutely.
The U.S. dollar is a terribly flawed currency. I’m trying to get all of my money out of U.S. dollars. I don’t know why anybody would put money into the U.S. dollar, and by extension into the U.S., as we stand here today. The U.S. is probably the largest debtor nation the world has ever seen!

The United States’ foreign debts are increasing at the rate of $1 trillion U.S. dollars every 15 months. U.S. foreign debt is by $13 trillion, and rising rapidly. It’s the official policy of the central bank to debase the currency. They’re trying to drive down the value of the dollar.

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Q: My take is that former Fed Chair Alan Greenspan and current Fed Chairman Ben S. Bernanke may go down as the worst central bank chairmen in history. Do you see it differently?

Rogers: [Bernanke] and Greenspan together will probably bring [about] the end of the Federal Reserve. We’ve had two central banks in America that folded. that third central bank will probably fail, too, considering of Bernanke and Greenspan.

There’s just so much they can do. perhaps that balance sheet is infinite. I doubt it. And it can be said to be infinite; they just print money like Zimbabwe or someplace. But that has to come to an end, eventually.

Maybe Bernanke is going to get into his helicopter and fly around collecting rents now. perhaps when they repossess all the property, he’s going to be the rent collector. But soon after when they eventually take on all the car loans, I guess he’s going to be collecting car payments, too. And credit card debt, when they take by all the credit card payments, I guess he’ll be hauling us all out saying: “Your credit card’s overdue.”

This is insanity.

****************

Q: Is there a circumstance under which you could see the U.S. recovering, or do you think that country is doomed to be an economic also-ran?

Rogers: Historically, nations that have gotten themselves into that kind of situation have only gotten out following a crisis or a semi-crisis, or some gigantic stroke of luck.

The U.K. got out considering they discovered the North Sea. Now, you give me the largest oil field in the world, or one of the largest oil fields in the world, I’ll show you a good duration, too. (I’ll raise you the North Sea and I’ll show you corn ethanol! Take that!)

So whether you have a stroke of luck [you can escape

these kinds of problems], but otherwise, nobody’s ever sorted out these problems without some kind of gigantic crisis or semi-crisis first.

In America, most society do not understand there is a problem! The few who know there’s something going on don’t understand what it is. Most of them who understand it actually think it’s good that the currency’s declining. America’s not going to do anything until things get very, very bad. (on that I agree - that is how we do everything - always reactive, never preventative, and only reactive when its crisis mode - my distress is I cannot think of what they will “do” that will “solve” this)

Others that offer the rejoinder to that - that the declining dollar makes America competitive - [that] has worked in the short term. But no country has ever restored itself by debasing its currency, not in the lengthy term, not even the medium term.

Many places have tried to debase their currency as a solution. It’s never worked, other than perhaps in the short-term, for a while.

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Q: Are we looking at a Japanese-style lost economic decade?

Rogers: The Federal Reserve is making the same mistakes that the Japanese made. They’re trying to say: “We won’t let anybody fail. We’ll print a lot of money. We’ll drive interest rates to zero. And we don’t want anybody to fail. We’ll put on as many Band-Aids as we have to.”

Well, putting Band-Aids on a cancer patient is not a good solution.

So whether it’s like the ’90s in Japan, or the ’70s in America, remains to be seen.

[One-time U.S. Federal Reserve Chairman] Arthur Burns, who headed the central bank in the ’70s, did precisely what Bernanke’s doing. He raced in and printed money and said: “Oh, everything’s gonna be OK.”

But the economy never recovered, inflation went through the roof, and the dollar was under duress. Eventually they had to bring in Paul Volcker and interest rates went by 20%. And eventually they killed inflation and they solved the problem.

They’re making precisely the same mistakes that Burns made. For whatever reason, though, that problem is going to last longer than previous difficulties in America. And it’s probably going to be worse.

Because, now, America is a debtor nation. Now we’re the largest debtor nation in the world. At least in the ’70s, we were still a creditor nation. Japan could survive considering they were the largest creditor in the world at the duration. So they didn’t fall off the face of the earth.

America’s now the largest debtor the world has ever seen. What’s happening in the U.S. is not going to be fun.

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Everytime I feel like I am a bit crazy after reading webpage after webpage, news story after news story, financial TV show after TV show denying anything is significantly wrong that we cannot get through in the next 6 months, and it’s all a short term blip, I am thankful to read some of the comments of some of the greatest investors that ever lived - many of which were listed in paragraph 1 of that blog entry. All who continue to ring the alarm bell, and essentially are marginalized. It makes me realize, possibly I/we are the sane ones, and most others (who seem to live in denial or ignorance) are the crazy ones? Or worst case scenario whether I/we are incorrect about that financial tsunami, I can be put into the loony bin with a very choose group of gentlemen ;). Where we can trade stocks together….

It should be a very interesting 3-5 years ahead. We’ve seen some of the most historic financial interventions/times in the past few months - I expect more unprecedented action, both financial and political in the year or two upcoming. Get your popcorn.

Original post by TraderMark