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.

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The politicians keep on fueling an illusion that you can spend yourself out of the misery, and that by printing money you will improve the economy which is not the case. – Marc Faber

Whatever their nature, all debts must be paid. This is a basic feature of God’s creation and one that reflects his character. We see this in Romans where Paul described God as both just and the justifier of the one who has faith in Jesus. Sin put us in God’s debt, and his justice demands payment, a payment no sinful son of Adam can ever make. God doesn’t wink at our sins, he doesn’t let us file bankruptcy or default. Our sin debt must be paid, either by our eternal condemnation or by the blood of his Son Jesus Christ. This is a simple point, an elementary point, a point that a child can understand. And yet this simple point often causes us to stumble. We want to believe that there really is a free lunch.

This wishful thinking isn’t limited to our sin problem, but shows up in how we think about more mundane areas such as fiscal and monetary policy. The United States, and indeed the whole western world, has incurred an enormous monetary debt because people believe in free lunches, that is, they think that debts do not have to be paid.

One of the few prominent investors who gets the debt issue is Marc Faber. I don’t know whether he’s a Christian, but his understanding about debt is certainly consonant with Scripture. We cannot spend our way out of debt, that’s a Keynesian lie. Our debt, he tells us, must be paid. That’s not the line the folks from Washington, Wall Street or Main Street want to hear, but it is the truth. Check out this video interview with Faber.

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The central bank?  Abolish the central bank.  Who needs a central bank?  – Jim Rogers

A few years ago when I finally decided to get serious and learn about investing and economics, I had no trouble finding outlets that offered information and advice.  But there was a problem with the supposed helpful hints and trenchant analysis put forth in the mainstream financial media:  it was a perfect cacophony of contradictory nonsense. To wit:  Destroying perfectly good automobiles is good for the economy, but saving money by driving a clunker is un-American.  If consumers go on a spending spree and max out their credit cards, this is good for the economy.  If consumers act responsibly and pay down their debts, it’s the end of the world as we know it.  A strong dollar is bad for America, but devaluing the dollar and thus the cash savings of the American people is good policy. Capitalism is what makes America great.  We must have socialistic bailouts of GM and Wall Street to save capitalism.  Gold and Silver are in a bubble, but municipal bonds issued by nearly bankrupt governments are a great buy.  The nation’s current financial crisis came about because people couldn’t pay their mortgage debt.  In order to solve our current financial crisis, the nation must go further into debt.  When investment bankers make large profits due to their financial acumen, they deserve to earn large bonuses.  When investment bankers suffer massive losses due to their financial incompetence, they deserve to earn large bonuses.  The worst financial scandals in American history have come during the period of greatest government regulation.  If it weren’t for government regulation, the country would be rife with financial fraud. 

I could go on, but I think I’ve made my point:  searching for financial wisdom in the mainstream press is a lot like snipe hunt.  This should come as no surprise, for the minds of those who opine in the financial press are largely governed by the foolish ideas of this world.  That’s what makes it so refreshing to hear someone who speaks clearly with insight and understanding on the subject of investing.  And one of the best at brining clarity to financial matters is Jim Rogers.  I first came to admire his work during the fall of 2008.  At a time when it was all but impossible to find anyone who had anything intelligent to say about the collapse of the equities markets, Jim Rogers was on CNBC and any other outlet that would have him preaching the simple, understandable, ethical gospel of capitalism.  That is not to say that Jim Rogers is a Christian.  I don’t know what he thinks of Christ.  He is, I believe, and Austrian as touching economics.  And while Austrian economics is not Christian economics, the main tenants of Austrian economics are consistent with the Bible.  In addition to being sound in his thinking, Rogers is one of the clearest speakers on investing and economics I have heard.  It’s amazing, but you actually can listen to and understand a Jim Rogers interview without having a graduate degree in finance.

Here’s a blog dedicated to Rogers quotes.  Also, be sure to check out the following Jim Rogers interview.

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Not so very long ago the thought of buying gold and silver seemed unthinkable.  I didn’t know very much about investing,  and the little I did know came from studying my one and only underperforming, large cap mutual fund.  To me, the bond market seemed like foreign territory, so the thought of investing in precious metals was about as  far off my radar screen as it could be.    

That started to change in 2007, when after becoming convinced of the worsening financial condition of the US and the distinct possibility that the powers that be would try to monetize the government’s debts – by monetize I simply mean create new dollars out of nothing by a process the academic frauds who run our nation’s financial institutions call Quantitative Easing, thus destroying the value of the existing dollars in your checking and savings account  – I finally started to seriously consider investing in gold and silver, and over the past three years I’ve become much more comfortable with the metals.  

Maybe you’re like I was in 2007, intrigued by precious metals but unsure whether it’s a good investment.  Does it make sense to invest in gold and silver?  How would I go about doing it?  What dangers should I be aware of?  If you’re asking these questions, that’s ok.  In fact, if you’re not asking these questions before investing, you’re disrespecting your hard-earned, God-given capital.  So before putting any money into silver and gold, it’s best to learn why and how you should buy. 

The key to this is finding a good mentor.  One of the best I have found in the field of precious metals is James Turk.  He’s a  sober-minded investor with decades of experience in finance and precious metals.  I find his writing clear and easy to understand, even for novice investors, and his forecasts of the price movements of gold and silver have been remarkably accurate.  His 2004 book The Collapse of the Dollar and How to Profit from it is a good place to start for learning about the silver and gold markets.  In the first half of the book, Turk makes his case for why the dollar will collapse: it’s a government fiat currency with an unlimited potential supply.  The second half of focuses on gold and silver investing and provides helpful information on how to purchase both the physical metals and also gold mining stocks.  There’s also a disturbing chapter dealing with the specter of government confiscation of not only gold, but also Americans’ retirement savings.  You can find used copies of The Collapse of the Dollar for a few bucks on Amazon or other internet booksellers.  Think of it as one of the better low-cost investments you’ll make in the new year.

Click here for a recent audio interview with Turk by Eric King of King World News.

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