Jim Rogers Blog - Uncle Ben is a Historic Disaster?

Bernanke Is Going To Go Down In History As An Absolute Disaster

Not true? Everybody is printing money is an effort to debase their currencies so that exports remain competitive, while consumers will suffer with rising prices that will not be reflected in inflation indices. The game is on.

First, we are not promoting Uncle Ben's actions and decisions in anyway - it is just that all these guys are boxed in and have few choices to consider. They are boxed in for a number of different reasons, but if we cut to the chase, physical-reality's constraints are now governing what both central bankers and their abstractionist economics can and can't do. 

So, what's really going on? The secret is we are past "peak everything" making the inputs needed for production and consumption outputs scarcer. As a result, if you are chasing these scarce physical objects with abstracts (money) and all the other chasers are doing the same, how would you try to win the chase? You are right, have more abstracts than the other chasers - which translates into what? Print more money.

What does the end game of this chase look like? Simple extrapolation says we will ultimately have printed lots of money, but for some reason it didn't create anymore inputs for the economic process anywhere. I wonder why that is?

So in a funny way we do not really blame Uncle Ben and his friends because not even Jimmy has come up with a solution to fix this predicament. Why? Simply because there isn't one.

INVESTORS' INSIGHTS

First Financial Insights

September 13, 2013  

Poor Uncle Ben and friends...are just boxed in. Reality Check!

    

BLOOMBERG - OOPs! - #Japan's Economy Grows Less Than Forecast

BLOOMBERG  - Oops! - #Japan's Economy Grows Less Than Forecast

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Investment Drops - 

Annualised Growth 2.6% 

Recently folks were applauding the turn around in profits for some of JAPAN INC's biggest exporters, as short-term delusional benefits of its managed currency devaluation jumped earnings in the second quarter, leading some to even proclaim that the two decades of economic decay had finally come to an end. That celebration was short lived, as overall GDP growth for the period, did not meet expectations.

Moreover, business confidence, as measured by capital investment, drifts hesitantly despite improved profits. Consumers can look forward to a possible increase in sales taxes, that certainly cannot add to their feel good levels. Plus, as import costs increase, they can expect their pocket books to be squeezed much more in the months ahead. 

In all, the deflationary overhang is still there as low interest rates cause both consumers and businesses to act cautiously. It is still hard for commercail banks to lend too, because lenders " collateral values" can disappear in an overnight whisper of a rate increase. These internal structural weaknesses play into foreign competitions' hands as they can invest capital more effectively. That's not good for the export business.

At some point, Japan's deflation should disappear with the import of hyper-inflation on materials from other countries, at same time, so should exports. Then what?  Growing global populations and shrinking resources will not work to save this economy from the fix it entered after its financial bubble burst and the finite constraints of a shrinking planet set  in.

INVESTORS' INSIGHTS

First Financial Insights

August 9, 2013