The Ruin of the Pound ‘Sterling’

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Billionaire financier Jim Rogers (left) has predicted that the British Pound could completely collapse within weeks, sending shockwaves throughout the global economy and heralding the beginning of a downturn that would make the recent economic crisis look tame in comparison. "Other currencies aren’t strong and the Euro has real problems, with cracks much wider than Greece beginning to show," Rogers said. "But it’s the Pound that’s most vulnerable. In real terms, it’s already devalued against virtually every currency barring the Zimbabwean dollar and it’s especially exposed over the weeks running up to the UK election. In a basket of currencies, the Pound is potentially a basket case. And that will put Britain in an extremely bad position for the shakedown." "The last few months have seen a ‘false bounce’, shorn up by massive short-term injections of government underwriting," Rogers, the former business partner of George Soros, said. "But it can’t last. We’ve been applying temporary sticking plasters, not long-term cures. Later this year we’ll see the start of the real recession, with more Lehman-scale disasters and a fallout which won’t stop until the underlying malaise is genuinely cured." he added. ~ 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.

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Jim Rogers has taught finance at Columbia University’s business school and is a media commentator worldwide. He is the author of Adventure Capitalist, Investment Biker, Hot Commodities, A Gift to My Children, and A Bull in China. See his website.

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