US Investor Jim Rogers Believes QE3 Already Launched

on Sep 14, 2012
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Veteran investor Jim Rogers, a co-founder of the Quantum Fund, believes that the US Federal Reserve has already launched a third round of quantitative easing so as to stimulate the country’s economy, the Telegraph reported on September 3. According to Mr Rogers, evidence suggests that America’s central bank has started printing more money, although the Fed chairman Ben Bernanke did not announce such stimulus measures at his much anticipated Jackson Hole speech in Wyoming at the end of August.

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In an interview with India’s daily newspaper The Economic Times, Mr Rogers commented that he was convinced the Fed was not only going to print more money, but that evidence suggested the US central bank had already started doing so secretly. “If you look at their balance sheets, you will see that something is happening, assets are building on their balance sheets and they are not coming from the tooth fairy,” he noted as quoted by the Telegraph.

!m[](/uploads/story/365/thumbs/pic1_inline.png)Mr Rogers believes that the reason why the Fed did not announce the launching of QE3 is that the previous two rounds of quantitative easing failed. “They may just continue to do it without getting egg on their face again”, he said, referring to the US central bank. While Mr Rogers is of the opinion that printing out more money is not the best course of action, he also thinks that it is all the Fed knows how to do, as pointed out in The Economic Times interview. In addition, Mr Rogers told the Daily Telegraph that although he could not confirm it, he believed that the Fed had probably “learned how to do things off balance sheet.”

At his annual speech at Jackson Hole, Wyoming, Ben Bernanke indicated that the US central bank might soon intervene, given the worrying rate of unemployment in the country. The Huffington Post reports that the Fed chairman described the stagnation of the labour market as a “grave concern”, pointing out that the persistently high levels of unemployment could “wreak structural damage” on the US economy which could last for many years.

As noted in the Telegraph article, the US is not the only Western country with serious economic issues, with the Eurozone dealing with its own sovereign debt crisis. Mr Rogers foresees that even more problems are likely to come out of Europe, since some countries are in essence bankrupt. He also points out that perhaps with the exception of a couple of countries such as Bulgaria, all European nations have higher debts in their projections. “The solution to too much debt is not more debt,” says Mr Rogers, as quoted by the Telegraph.

Mr Rogers does not seem to be very optimistic about the East either, noting that debt to GDP in India is over 90 percent, whereas China should not yet “loosen up” since it needs “to kill inflation totally” as well as “to totally pop the property bubble”.
With central banks around the world printing more money, Mr Rogers believes that the price of gold will increase over the course of the decade whereas supply limitations and potential wars are likely to push the price of oil higher.

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