Monday, July 16, 2018

The Fed doesnt know what it is doing

US Fed Chairman Jerome Powell seems to be optimistic on the current state of the US economy and has recently said the economy is "in a good place". His predecessor Janet Yellen had taken interest rates to historically record lows.

"The Fed doesn't know what it is doing. The central bank throws the interest rate to the lowest level in recorded history. The American central bank has increased its balance sheet by 500 percent in ten years. Historically, it is impossible. So what the American central bank has done is incomprehensible in historical terms. This is like an experiment. I hope it's going to work. They're going to find out it's not going to work."

On interest rates 

"The interest rate should go much, much higher. The interest rate has gone to the lowest level in recorded human history. This has been totally absurd and it has never happened before because the bureaucrats don't know what they are doing. We are all going to pay horrible price to bring it back to normal. A lot of people are going to go bankrupt. I hope I'm not one of them."

Jim Rogers is an amazingly smart investor who co-founded the Quantum Fund with George Soros in 1973. By 1983 the fund gained more than 4000 percent.