Jim Rogers, author, traveller and commodity evangelist, does not have a high opinion of policy makers in the United States.
Sample this: President Barack Obama is charismatic but lacks the experience needed to handle economic upheavels.
And another: Federal Reserve chairman Ben Bernanke’s reckless production of dollars carries the risk of large-scale deforestation.
Problems caused by too much debt and consumption cannot be solved by taking even more debt and consumption, Rogers said, while speaking at ‘Vision 2015′, an event in Mumbai. Stating that he had more faith in the Reserve Bank of India than in the Federal Reserve, he reiterated that the Indian central bank has done a better job of managing its economy.
In his typically frank and common-sensical way, Rogers said any solution that banks on pumping of large amounts of liquidity by central banks into the global economy is unsustainable and wondered what would happen if the current recovery begins to falter.
“What’s Bernanke going to do, print more money? The world would run out of trees,” he said.
While the Reserve Bank of India has done a much better job than the central banks of some developed countries, he said, others too are doing commendable work.
“Nowadays the ECB (European Central Bank) is doing a much better job as well as are central banks in Australia and Norway,” he said.
The ECB has been grappling with the possibilities of sovereign defaults in the European Union and responded with low interest rates and aggressively buying sovereign and corporate bonds.
Australia was the first of the major economies to raise its interest rates in October 2009, while Norway was the first European nation to do so, also in October 2009.
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.