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CNBC reporters versus Jim Rogers

Posted by Adrian on October 24, 2008

I like Jim Rogers, smart guy and to the point with no BS. He hacks into the Federal Reserve and that foolish Ben Bernanke, why not? Those financial controllers at the helm using tax payers money have been wrong literally every time they open their mouths.

Jim Rogers being an ardent critic of the incompetence of the US Federal Reserve, with CNN business reporters living in a kinda shielded bubble, muddled by graphs, statistics and their own paranoia of show ratings. It’s a classic example of a clash of reality (Rogers) with denial (CNBC)

Anyway, one reporter tries to derail Jim rogers with the ‘AIG didn’t go bankrupt’ (by legal definition) and ‘look at all that deflation out there (stocks, home prices) how is anything going to be inflationary?’ and the Federal Reserve is staving off a 2nd Great Depression by ‘flooding the markets with liquidity and buying banks’.

AIG were bankrupt in the business sense, yes a business can go bankrupt and still operate, hence the term ‘zombie business’. More so applicable since the US government literally owns the whole thing now, just take a look at their share price. The legal definition is filing for bankruptcy’s (Chapter 11).

Again, one should use that term Zombie banks in conjunction with a market perspective on bankruptcy. The market will see unprofitable business entities that just sit there with a government animating the entity, as businesses that shouldn’t exist. Whether they will stop consumer panic or not, at the end of the day it won’t matter; a zombie business offers nothing to the greater economy.

Regardless the market can declare a business bankrupt quicker than any court.

Credit expansion caused bubbles, now unwinding and coming down like a sledge hammer. Whether the central banks of the world can stave of banks runs is still disputable, you can sustain panic but only for so long. But to sustain panic by creating another bubble is double the pain.

Yes deflation in stocks and inflation on a loaf of bread. Since most if not all the governments of the world have played down inflation for so long, we might just get a nasty stagflation slump.

Jim Rogers has a nice little dig at the business report saying how they suggest buying ‘tech’ shares in a time when silicon valley will shrink (note recently Yahoo sacking staff.)

Anyway the CNBC reporter is fucking clueless.


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