Tuesday, June 21, 2011
Jim Rogers: Obama Should Resign Before Inflation Sparks Unrest
Tuesday, 21 Jun 2011 08:37 AM
By Julie Crawshaw
Investment guru Jim Rogers says President Barack Obama should resign — and warns that inflation will only continue to soar, putting the United States at risk of the same civil unrest that has struck Greece.
Rogers says that what Obama “should do is take an ax — no, not an ax — take a chain saw to spending in the U.S.”
Rogers tells Bloomberg Business Week that “we have got to balance the budget. We have got to pay off the debt, somehow, someday.”
Nonetheless, Rogers — considered by many to be "the ultimate dollar bear" — is simultaneously long the U.S. dollar.
Why? "Because everybody's bearish, including me. I read something like 97 percent of people are bearish on the dollar," the Rogers Holdings chairman said.
"I am one of those 97, so I bought dollars."
“Why should a good, honest German taxpayer, a guy who saved his money, suddenly get a bill from the German government saying you have got to pay for some Greeks sitting on the beach drinking Ouzo?” asks Rogers. “That's absurd.”
German voters have already voiced their displeasure with that scenario by staging protests. In Greece, there have been more than three weeks of demonstrations over austerity measures needed to avoid a national debt default. Many such protests erupted into violence last week.
Rogers expects there will similar protests in the United States.
“We are going to have social unrest in the U.S., too,” Rogers says. “We are going to have much higher prices. We are having serious inflation, which is going to get worse, and we have a government that is sitting down there spending staggering amounts of money, getting us deeper into debt.”
Meanwhile, the latest “Misery Index” shows that Americans are more miserable than they’ve been in the past 28 years, economically speaking.
The monthly index, an unofficial measurement created by economist Arthur Okun back in the 1970s using the simple premise to total the inflation and unemployment rates, is now 62 percent higher than when Obama first took office in 2009.
The May index is at 12.7 (9.1 percent unemployment and 3.6 percent annualized inflation). That compares to an all-time high of 21.98 in June 1980, and a historical low of 2.97 in July 1953. In 2011, it has inched up every month since January’s reading of 10.63.
“The good news is that other measures suggest conditions aren't quite that bad and over the next 18 months the gloom should lift a little,” a chief U.S. economist wrote in a misery analysis reported by CNBC. “The bad news is that households won't be in the mood to boost their spending significantly for several more years.”