News & Analysis
Jim Rogers on the Pound
Ed note: Billionaire financier Jim Rogers (left) has now denied that he predicted that the British Pound could completely collapse within weeks. "[The statement sent] shockwaves throughout the global economy and heralding the beginning of a downturn that would make the recent economic crisis look tame in comparison. [Ed note; See Rogers denial below as he sets the record straight.]" – InfoWars
Dominant Social Theme: Mama, it's cold out there. But the sun will shine tomorrow.
Free-Market Analysis: Jim Rogers, who has given the Bell a terrific interview to appear this Sunday, made news again yesterday with the above excerpted prediction about the British pound. It's no secret that Britain has been inordinately profligate even during the financial crisis, with the Labour government refusing to rein in spending programs. Health care and various welfare and social services programs, alongside of a failing public education system, are breaking Britain, but neither major political party seems prepared to provide lasting solutions. Crises are looming, as Rogers suggests.
When outlays continually outstrip income, the world's currency trading community begins to grow uncomfortable – or hyper-active anyway. The offending country is forced to offer higher rates on its paper to tempt buyers. In extreme cases, as Rogers is suggesting, bonds may not sell at any cost and the currency gradually sinks toward zero compared to other "more solid" international currencies.
Will Rogers predictions come to pass? See other article in today's Bell for a general discussion on the unraveling of the current economic system – EU Unraveling – Greece Vs. Germany – one that depends on central banking, fiat money and the confidence of its citizens. If people ever begin to seriously question the validity of the world economy – as it has been developed – bad things could happen. If the international financial system really began to unravel, there would certainly come a time when a new economic order would start to evolve, spontaneously or not.
Now some of the savvier cynics among us will claim that this is just what has been "planned." That those who are driving the world toward an ever-more perfect union, want to create this sort of crisis, with an eye toward implementing an ever-more centralized solution. We can believe this may have been the plan, but if so, we also believe it's spinning out of control. We don't believe, for instance, the elite wants to lose the European Union or the euro anymore than it wants its painstakingly created global warming promotion to go belly up. We think events are driving the elite for once, rather than the other way round. The combination of bad economic times and the socio-political education available on the Internet itself is proving lethal to many elite promotions, including central banking and fiat money.
It all comes down to what you believe, dear reader. If you believe that the EU and global warming were just way-stations on the road to world government, then you will likely believe that the current chaotic climate is purposeful and that what emerges hews to a long-term plan. If you believe as the Bell does, then you will likely take the position that what is occurring today is out of anyone's control, and that it is a kind of perfect storm, or as Anthony Wile wrote in High Alert in 2003, a financial hurricane – one the power elite never expected. It is, in fact, a confluence of a ruinous global economy and the educative effects of the Internet. The former the elite may have foreseen and advanced. The latter, we believe, was something the elite never imagined.
When we began to write about the Internet as a modern day Gutenberg press some 8-9 years ago, we had no idea what would be the trigger mechanism. We couldn't imagine how events would shake and we figured whatever was going to happen would take another 25-50 years. So we are surprised as you are, dear reader, over the speed with which elite promotions seem to be deflating. What has happened, of course, is that people are upset and angry over the economy and the loss of the jobs – not only in the West but around the world. In the past, the elite has easily been able to take advantage of such anger by directing it in certain populist directions that eventually result in even MORE control. But today, the elite may have lost some of that ability. The elite controls the mainstream news, but the mainstream is not what it was in this Internet era. In fact, the alternative 'Net press, much of which is free-market thinking oriented, is increasingly credible.
What would happen if the pound crashed? It would probably set off a real economic realignment globally. But we have a hard time believing that what would emerge would be a kind of economic global governance. Oh, perhaps that's what the powers-that-be had in mind. But we don't think, at this point, that there would be much of a buy in. Let the power elite emerge from a "crisis meeting" and announce the formation of a comprehensive IMF currency to take the place of the dollar and see what happens. It wouldn't be greeted with the kind of respectful awe that Bretton Woods inspired.
Conclusion: For the first time in hundreds of years from what we can tell, there is no feasible preordained outcome to what's taking place. Those in charge have little credibility and those who have the money are having difficulty wielding it because the Internet has so thoroughly explained the mechanism. It is perfectly possible that the EU comes under very heavy attack in the near future along with Britain. It is perfectly possible that the central banking regime of the past 100 years becomes increasingly non-credible – and eventually fails in pieces or all at once. In that case, we would anticipate the resurgence, to begin with anyway, of Brownian state-run central banks and perhaps even parochial fiat money. We would hope that free-banking would make a comeback as well, along with a market-based gold and silver standard. Of course, Rogers and others may believe the world in its current incarnation may simply muddle through. But nothing is as certain as it was. The 21st century is not the 20th.
ROGERS DENIAL: Jim Rogers has denied stating that British pound will likely collapse. He has now made statements correcting a false press release issued ahead of a presentation at an upcoming Global Trading Day seminar along with Dr Marc Faber and trader Vince Stanzione. Stanzione who sent out the press release claims it was a "mix up" and that the press release was distributed by mistake. Nonetheless, sources point out, the resultant furor has lifted the profile of his "Trading Day Seminar." Stanizione supposedly trades his own funds and has reportedly has created a "best selling" course on Financial Spread Betting. He is said to write for various well-known British magazines.
Visit the Daily Bell on Sunday to find out what Jim Rogers really says and thinks in a lengthy exclusive interview.
Posted by Walter Haxton on 02/28/10 09:19 PM
I suspect that Mr. Rogers still has a few pounds that he wants to spend before the collapse. Time will tell. Spain and California need to refinance soon. Invest your money in mints. They are going to need it to expand production. The new global currency's will be solid precious metals. I also suspect that there will be a day when we are spending Wal*Mart dollars and McDonald's tokens.
Posted by Lou T on 02/28/10 06:43 PM
Then what do you do?
Specifically, buy gold, silver stocks....short the market with tza, faz, qid,sell xom, aa, vz, pg, upl, ung,
Reply from The Daily Bell
The interview was more general than that.
Posted by Pat on 02/28/10 12:03 AM
The Elite lost control in the 30s rape of the classes, what makes you think they haven't lost control again--1.1 trillion in Res RE mortgages--Alt A and option ARMS will fail 1/2010 - 8/2012, and 2 trillion in Comm RE is in just as bad as trouble...
Posted by Robby on 02/27/10 11:09 PM
Im glad they are asleep, so was I, but all these bailouts and soothsaying by the media hs bought me alot of time to get my life/house in order. I need about 3-5 more months and I will be as ready as possible, but I am sure, woefully underprepared for what will certainly be a disaster. I laughed out loud reading Daniel A's post, I was thinking the same thing when I read the article. I watched the IMF summit meeting last night on c-span, boy are they rubbing their hands together in anticipation of getting in the middle of all of this chaos, I would watch it if you can find it, it scared the heck out of me.
Posted by Daniel Ajamian on 02/27/10 09:25 AM
Regarding Rogers' about face: Soros to secretary: Get me Jimmie on the phone.
Rogers: Hello George, how are you?
Soros: Jimmie, don't you remember the "talking to" I received when I took the pound down? Well, I received another call today. They asked me to suggest to you that maybe you were misquoted.
Rogers: Yeah, George, I see your point. Maybe I will just say I was misquoted....That's a good idea.
Reply from The Daily Bell
We take him at his word, though the press release was widely disseminated and picked up in numerous places.
Posted by Ponce on 02/26/10 04:05 PM
Maybe he found out that the UK and Greece are getting a bail out after he posted???
Posted by The Greatest Ponzi Scam Of All Time on 02/26/10 03:52 PM
And soon the world will discover that Gold and Silver are the only true sources of value (and the short positions can't be met with physical deliveries). The Pound and The Dollar will crash within 2 years (possibly within 2 months). If you gave a 6th grader the basic facts about what is owed and what is collected in world gov't economies: That kid can quickly ascertain that it's a ponzi scheme, and that it will end very badly. The USA and the UK are two giant Bernie Madoffs. And This can't be fixed. We might be the last generation.
Reply from The Daily Bell
"The USA and the UK are two giant Bernie Madoffs,"
Well, you may be gloomy, but you can certainly turn a phrase.
Posted by Ryan on 02/26/10 12:34 PM
Reply from The Daily Bell
Thanks. We're updating the story.
Posted by Mike on 02/26/10 10:56 AM
This is to V. Heddins:
The people are not as asleep as you may think. A lot of them have suddenly woken up and found out they are totally unprepared for any kind of catastrophe. They tend to slip back into denial and hope it goes away. They know they will have to change their lifestyles drastically. Lead by example and they will catch on,
Posted by Khl on 02/26/10 10:54 AM
By far the best de-constructor of the power elite was Murray Rothbard. While the fingerprints and dna of the elite are often obscured or hidden in the day to happenings of life, they shine larger than life in the economic history of the ages.
In fact, it is arguable that the true history is only ascertainable by an analysis of the economic history. Because economic history deals with motives, costs and benefits.
When you look back at the House of Morgan and the House of Rockefeller, which are now largely one and the same, you understand why the country is where it is today. Much of our ills can be traced back to WWI. It has been argued, and effectively, that the US had absolutely no reason to enter WWI.
However, Wilson's government was filled with Morgan Men. His main advisor, House, was indisputably in the indebtness of Morgan. Morgan along with other banks had loaned the English and French over $1 billion, a remarkable sum in those times. A loss by the allies would have put Morgan on life support. But WWI was also a turning point in government power.
Bernard Baruch was in charge of the war purchasing powers. He encouraged businesses to cartelize and asserted government control over these groups to enforce these agreements. The government nationalized the railroads and paid off the shareholders, Morgan groups. Then the government rebuilt the deteriorating infra-structure of the rails and after the war, gave the newly modernized railroads back to their rightful owners.
The government contractor's best friend, "the change order" came into vogue during this period. All told, anti-competitive forces and government rip-offs cost our nation untold billions in "real" dollars and hundreds of thousands killed. More importantly, this war became the template of the warfare state and showed the way to ever restricted freedoms that we now face today.
It also led to the Statist, Corpratist, Syndicalist State that we now face today. Unfortunately, this isn't the history they teach in school.
Reply from The Daily Bell
Very good points, though there is still more, perhaps. According to a disputed historical memo from House to British leaders (one that was once available on the "Net and may be still), the war was meant to yield up global government via the League of Nations. It did.
Posted by Lance E. Schultz on 02/26/10 10:37 AM
"Click to view linkom what we can tell, there is no feasible preordained outcome to what's taking place. Those in charge have little credibility ... But nothing is as certain as it was."
Oh its feasible alright, quite feasible indeed as it was preordained before the foundation of the world and there is but one "in charge" and the only one with any real credibility remaining.
And yes there is "one thing" as certain today as it ever was. You just have to believe. Or you can choose not to believe. It won't change the outcome.
Reply from The Daily Bell
"as it was preordained before the foundation of the world ... "
Not sure the Bell should comment on the feasibility of Armageddon.
Posted by David Anderson on 02/26/10 09:55 AM
I agree with the Bell viewpoint. I hope that the current financial house of cards that central banking has built, will soon collapse. But I do not underestimate the power of human ingenuity in crafting braces for the current structures. Fiat currencies have been wobbling for at least 30 years. I would not be surprised to see the power elite attempt to establish one or two more iterations of reserve currencies before a return to the gold standard occurs. So I will store wealth in gold until IT becomes currency.
Posted by Johnny Dangereaux on 02/26/10 07:47 AM
They won't say "shucks"....they'll say "OUCH!" as their heads are sliced off....figuratively of course...
Posted by E. Jones on 02/26/10 07:28 AM
Most are still asleep. Massive "terror" event staged by the elite, martial law, shut down the internet, and people will submit in grand fashion.
Yes, more truth is being told, all the more reason for them to pull something very soon. What, do you think they are just going to say "shucks, we almost got away with it."?
Time will tell.
Posted by Johnny Dangereaux on 02/26/10 06:49 AM
Well I am looking forward to Sunday. I also suggest reading his book "Investment Biker". As Jim will admit he is a "horrible trader" BUT, what he calls for generally comes to pass. He's been a huge China bull and says he'll never sell his China stake. I'd like to have him and Chanos (calls China a bubble) in the same room and see what happens.Jim will also be happy to pull out his gold Maple Leafs.
As a flat-lander from Chicago I really like the new format with the picture border. I wish there was a link to the whole photo....oh yeah, you're going to post those in their entirety on your Facebook page........after it's set up..... SWEET!
Posted by V. Heddins on 02/26/10 03:47 AM
I hope the Bell is right but unfortunately I still see an awful lot of people who are still sound asleep.
Posted by Leonardo Pisano on 02/26/10 03:01 AM
Maybe the Maya's were right after all with their prediction of a world collapse on 21.12.2012. We are heading for a market crash - it may very well end with the DJIA going to 2000. Whether the Pound collapses first to trigger the economic crash is just an excuse imho. It can be anything. Be prepared. It will be ugly.