The Long Crisis

Posts Tagged ‘AIG Bankrupt’

One of the most famous investors in the world is Jim Rogers, who was once a partner of George Soros. The highly successful billionaire and always outspoken Rogers has a strong reaction when you mention AIG and the current bailout mania. Rogers thinks that pumping more money into AIG puts the U.S. economy and the US dollar at risk of ruination.

“Suppose AIG goes bankrupt, it is better that AIG goes bankrupt and we have a horrible two or three years than that the whole U.S. goes bankrupt,” Rogers said in a CNBC interview.

“AIG has trillions of dollars of obligations, let them fail, let the courts sort it out and start over. Otherwise we’ll never start over.”

“You are watching something in front of our eyes, very historically, which is basically the destruction of New York as a financial center and the destruction of America as the world’s most powerful country,” said Rogers.

I have often wondered about the logic behind how you cure deep rooted problems of over leverage and of excessive debt by creating even more debt and leverage. Actually mountains of it all on US government credit and by depending upon the savings and investment of foreigners to fund it all. It’s like taking care of a drunk by pouring the staggering fellow another strong overflowing round of drinks. If you keep on doing that the poor fellow is certainly not going to sober up. He might even die of alcohol poisoning.

Yet the “best and brightest” of our over active public servants in Washington are playing the role of overly generous bartenders. The economy is being further poisoned by their actions even though it may seem to look better over the short run. AIG is but one of many crazy bailouts and schemes currently being funded by Uncle Sam with money that he does not have. The printing presses are starting to smoke as trillions are being churned out as a “keep the faith” currency.

As Jim Rogers says from his new digs in Singapore, “These people are nuts”.

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The famous highly successful investor and always outspoken Jim Rogers has a strong reaction when you mention AIG and the current bailout mania. Rogers thinks that pumping more money into AIG puts the U.S. economy at risk of ruination.

“Suppose AIG goes bankrupt, it is better that AIG goes bankrupt and we have a horrible two or three years than that the whole U.S. goes bankrupt,” Rogers said in a CNBC interview.

“AIG has trillions of dollars of obligations, let them fail, let the courts sort it out and start over. Otherwise we’ll never start over.”

“You are watching something in front of our eyes, very historically, which is basically the destruction of New York as a financial center and the destruction of America as the world’s most powerful country,” said Rogers.

I have long wondered about the logic behind how you cure deep rooted problems of over leverage and of excessive debt by creating even more debt and leverage. Actually mountains of it all on US government credit. It’s like taking care of a drunk by pouring the staggering fellow another round of drinks. If you keep on doing that the poor fellow is certainly not going to sober up. He might even die of alcohol poisoning.

Yet the “best and brightest” of our over active public servants in Washington are playing the role of overly generous bartenders. The economy is being further poisoned by their actions even though it may seem to look better over the short run as various stimulus plans have a short term positive effect.

AIG is but one of many crazy bailouts currently being funded by Uncle Sam. Soon it will be our dear uncle who will need a bailout. But who or what would be up to the task of sobering Uncle Sam up and getting him off his debt addition?

As Jim Rogers says from his new digs in Singapore, “These people are nuts”.

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