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.
