QE3 is coming, says Jim Rogers

Controversial financial pundit Jim Rogers has warned US Treasury Bill investors not to trust America's central bank. Once QE2 is done with, they will return with QE3 -and bond markets will collapse.

James McKeigue
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published
in Features

Controversial financial pundit Jim Rogers has warned US Treasury Bill investors not to trust America's central bank. The Federal Reserve is scheduled to end its second bout of money printing known as quantitative easing (QE) later this month.

But Rogers thinks they "will come back with QE3". Of course they "may not call it that," says Rogers. "They may call it cup cakes. Who knows?... But when things get worse they will come back with something."

Yet further money printing would only make things worse, adds Rogers. Speaking to Russian TV network RT, Rogers predicted that Treasury yields will soar (and thus prices tumble) when people realise that the US cannot pay off its debts.

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"America is the largest debtor nation in the history of the world I wouldn't lend money to the US government and I'm an American citizen." Rogers predicts that the bond market will collapse when creditor nations "catch on" and stop lending to the US. "They (China) are starting to cut back (on purchases of T-Bills) and will stop eventually."

That, says Rogers, will cause the US government's interest rates to rocket and further impair the country's ability to repay its debts. Eventually "turmoil" will spread across the financial markets before making its impact on the real economy. "People's shops, factories everything will be affected."

Rogers' solution is to invest in physical assets like commodities. He believes they will keep their real value longer than government paper.

James McKeigue
James McKeigue

James graduated from Keele University with a BA (Hons) in English literature and history, and has a certificate in journalism from the NCTJ. James has worked as a freelance journalist in various Latin American countries.He also had a spell at ITV, as welll as wring for Television Business International and covering the European equity markets for the Forbes.com London bureau. James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report. He is currently the managing editor of LatAm INVESTOR, the UK's only Latin American finance magazine. 

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