Jim Rogers Questions the Current Solution to Excessive Leverage and Overconsumption

By on September 17, 2009

Jim Rogers was interviewed on CNBC as part of their retrospective on last year’s crisis. Rogers is able to cut throught the BS and get to the heart of the matter, much like Marc Faber has the ability to do.

Rogers bemoans the crony capitalism emanating from the Fed (Bernanke and Greenspan), and doesn’t believe it solves the world’s problems. He mentions “Zombie banks,” which carry assets inflated on their books far beyond their true market value; in other words, not marking assets to true market value.

Rogers, in exasperation, wonders how the solution to overleverage can be more debt and too much consumption. He gives examples of where debt was cleaned out through liquidation, failed entities were allowed to actually fail, and economies later boomed. Rogers also questions why certain individuals are not in jail.

We’ve heard it all before, but Rogers is always interesting to listen to.

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