Famed investor Jim Rogers says the Fed is still inflating the money supply and this is ruining those who wish to save money.
“Yes, there is QE3. . . . The Fed is pumping money into the system.” The Fed claims it is on the sideline ready to pump, but Rogers notes, “They’re in the market. . . . They’re lying to us.” All you have to do is look at the Fed’s own charts, which don’t lie.
Congress certainly isn’t helping the situation. The politicians are “spending trillions of dollars that we don’t have,” and yet they’re clueless:
They don’t seem to understand the problem in Washington. We’re all paying the price for it, and you just wait until next year, wait until 2013: we’re really going to pay the price.
This combination of massive spending and massive printing spells disastrous consequences for hard-working, honest savers. ”Right now, what the Federal Reserve is doing is ruining an entire class of people in America.” And Rogers is not talking only about big Wall Street investors, he means “people who have saved and invested for the past ten, twenty years are now being ruined.”
And when you destroy the class which saves and invests in your country, you’re going to have serious problems down the road. Other countries have tried it. It’s never wound up in a good way.
When asked how a saver can truly save money when the Fed is destroying it—in other words, where he has his own money—the legendary investor answered, “I’m basically long commodities and currencies; I’m short emerging market stocks, I’m short U.S. technology stocks, and I’m short European stocks.”
The reasoning for these long positions is simple: if the economy does get better, then competition for commodities will drive prices higher. But if the economy doesn’t get better, the Fed will continue to print money and “you’d better own real assets.”
By “real assets” and “commodities,” Rogers—who is known for carrying a gold coin in his coat pocket—always includes gold, and now is no different. Although he expects a near-term market correction in the price of gold, he plans to continue buying if it falls, and in proportion: “If gold goes down, I hope I buy more. If it goes down a lot, I hope I buy a lot of gold.”
Whatever happens, he’s in it for the long haul: “I’m not selling any of my gold. I’m still bullish over the next decade or so.”