Lux Lucet

Jim Rogers is one of my financial heroes. Not only is he one of the most successful investors in the world, he’s also that ever so rare highly placed individual who 1) knows what he is talking about, and 2) is honest and brave enough to publically speak the truth. I had heard of him years before the 2008 financial crisis, but only as the events of that fall unfolded did I really pay attention to him. What impressed me so much was that as the whole financial system was coming unglued, Jim Rogers was one of the few calm, sane voices on Wall Street. Unlike the entire financial and political establishment, he denounced at every opportunity and to anyone who would listen the morally indefensible bailouts of Wall Street, Fannie Mae, and Freddie Mac in clear language a normal person could understand. Imagine that! A financial guy who speaks clear English.

Another nice thing about Jim Rogers is that he does a lot of interviews. He is a regular guest on American and foreign financial television shows, and he recently did an interview for an Australian TV network in which he discussed his financial forecast for 2012. I don’t know whether Rogers is a Christian, but his views on monetary policy, taxes and government are certainly consistent with the Bible.

Consider what Rogers says to a question posed by interviewer Lelde Smits regarding his outlook for global economic growth in 2012 ,

“Well Lelde, I’m not too optimistic about what’s going to be happening in the world in the next two or three years, and maybe even longer. We have serious problems in the United States. you know, in 2002 we had an economic slowdown, 2008 was even worse because the debt was so much higher. The next time around the debt is going to be staggeringly higher. So, the problems are going to continue to get worse until somebody solves the basic underlying problem of too much spending and too much debt.”     

This is exactly right. The 2008 financial crisis was brought on as a result of too much spending and debt. To cure this debt and spending problem, our dysfunctional political leaders – with intellectual cover provided by quack academic economists – decided to send the nation further into debt by a combination of money printing and deficit spending. It was Keynesianism on steroids.

The book of 1 Kings records a confrontation between the prophets of Baal and Elijah. When Baal did not heed the cries of the false prophets to consume the sacrifice on the altar, the Baal worshippers doubled down on their foolish leaping, shouting and gashing themselves, somehow desperately believing that Baal would hear them if only they could shout loudly enough. In the end, they just looked ridiculous.

And as is was with the prophets of Baal, so it is with our contemporary high priests of Keynesianism. They demand ever more money printing, government boondoggle spending and debt, hoping against hope that somehow the absurd act of piling more debt on top of an economy already being crushed by too much debt will fix things. But in the end, just like the prophets of Baal, the Keynesian quacks in charge of our monetary and fiscal policies will just end up looking ridiculous. Of course, they may bring the whole economy crashing down around us too, a feat well beyond the power of any mere prophet of Baal.

To read more of Jim Rogers’ cogent economic and investing forecast for the coming year, please click here.