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Jim Rogers: Paulson And Bernanke Should Resign
By Grace Cheng on October 22, 2008 | More Posts By Grace Cheng | Author's Website
Stocks are gyrating even more than currencies. At least the US dollar’s strength has been consistent throughout all the crisis. Stocks on the other hand are going up, down, up, down, or up, up, down, down - basically any combination goes. People want quick solutions, naturally, and the US government is seen scrambling for one band-aid here and another there, bowing to pressure from monied buddies (read: big bank executives). US stocks are under pressure from poor earnings reports and risk aversion.
Legendary investor Jim Rogers said today on CNBC that Paulson and Bernanke should resign for keeping “zombie banks” alive as they should be allowed to fail. Rogers cited the example of the Japanese government which had refused to let their financial institutions fail in the 1990s. He said, “It’s 18 years later and their stock market is 75 or 80 percent below what it was 18 years ago.”
Indeed, it does seem like so far the bailout has only benefited Paulson’s friends from Goldman (GS) and JP Morgan (JPM) among others. It is a huge conflict of interest for Paulson to be Treasury Secretary in the first place, and be appointing all his old pals from Goldman for key posts and giving out all the tasty morsels of collapsing banks at rock-bottom prices, while leaving shareholders and bondholders of those banks with little or nothing.
Why do I feel that the US is being plundered at the taxpayers’ expense?
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Should I say that Rogers should have astronger reason for wanting both of them to resign. He should advance stronger arguement for wanting them resign order than flimsy accusation putting his friends in positions that could not be objectively substantiated.
An economy built on debt is a false economy. You can’t spend your way out of trouble. This is Debt Deflation. Neo-classical economists do not have a clue - just like Ben and Hank.