Questions of the Day

Barack Obama has invited Captain Chesley B. “Sully” Sullenberger, the pilot who averted a disastrous crash when he safely landed the US Airways Airbus in the Hudson River last week. Obama has also invited all five members of the crew of Flight 1549.

But, why hasn't he invited anyone who warned about the crash of the economy? Such as Peter Schiff, Jim Rogers, Mark Thornton, Stefan Karlsson and yours truly. As a matter of fact, forget the inauguration, why aren't there any Austrian School economists on any of the many economic advisory groups surrounding Obama?

The six of us will survive the mess ahead, and so will most of the power elite, but what about the rest of the country?

Jim Rogers: Let The Weak Go Bankrupt

As usual Jim Rogers gets it right. He told CNBC that "The way to solve this problem is to let people go bankrupt. Then you will hit bottom and then you start over. The people who are sound will take over the assets from the people who aren't sound and we will start over. This is the way the world has worked for a few thousand years

And his inflation warning is right on, also:

The current rescue plans, which will force governments to issue more debt, print money and flood the markets with liquidity, will flare up inflation after the crisis is over and will create worse problems,he said.

"We're setting the stage for when we come out of this of a massive inflation holocaust," he said.

Jim Rogers: US "Is More Communist Than China"

The nationalization of Fannie Mae and Freddie Mac shows that the U.S. is "more communist than China right now" but its brand of socialism is meant only for the rich, investor Jim Rogers, CEO of Rogers Holdings, told CNBC Europe today..

"America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich… it's just bailing out financial institutions," Rogers said.

"This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I'm not quite sure why I or anybody else should be paying for this," Rogers told "Squawk Box Europe."

"Bank stocks around the world are going through the roof, that's 'cause they've all been bailed out. You don't see the homeowners in Kansas going through the roof 'cause they're not being bailed out," he added.

The two government-sponsored enterprises don't have good loans on their books, because "everybody else took the good stuff and dumped the bad stuff onto Fannie and Freddie," he said.

From 2010, Fannie and Freddie will have to shrink their portfolios by 10 percent a year until they reach $250 billion, to reduce the risk to the taxpayer, according to the Treasury plan. But this may put additional pressure on the housing market, Rogers said.

"That's going to also ensure that house prices continue to go down. It's going to be harder and harder to get a mortgage."

Investors should not pin their hopes on this year's presidential election for a solution to the problems, as none of the candidates is likely to find one, Rogers said.

"This is a big huge mess and neither one of them has a clue what to do next year. It's going to be a mess."


Source: CNBC

Rogers: I'm Buyng Airline Stocks

The savvy investor Jim Rogers has reiterated this morning on CNBC that he is buying airline stocks:

I am buying airlines. If you fly a lot, you'll see that you can't get a seat, the rates are going higher. The capacity is going down and the demand is still there.

Rogers also noted that he's "been short Fannie Mae since I came here three years ago or four years ago," adding that "I'm short lots of banks."

Fannie Plan a `Disaster' to Rogers; Goldman Says Sell

Bloomberg reports:

The U.S. Treasury Department's plan to shore up Fannie Mae and Freddie Mac is an ``unmitigated disaster'' and the largest U.S. mortgage lenders are ``basically insolvent,'' according to investor Jim Rogers.

Taxpayers will be saddled with debt if Congress approves U.S. Treasury Secretary Henry Paulson's request for the authority to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac, Rogers said in a Bloomberg Television interview. Rogers is betting that Fannie Mae shares will keep tumbling.

Goldman Sachs Group Inc. analyst Daniel Zimmerman said the mortgage finance companies' shares may fall another 35 percent and lowered his share-price estimate for Fannie Mae to $7 from $18 and for Freddie Mac to $5 from $17. Freddie Mac fell 18 cents, or 2.3 percent, to $7.57 at 11:16 a.m. in New York Stock Exchange trading, while Fannie Mae rose 13 cents, or 1.3 percent, to $10.38.

``I don't know where these guys get the audacity to take our money, taxpayer money, and buy stock in Fannie Mae,'' Rogers, 65, said in an interview from Singapore. ``So we're going to bail out everybody else in the world. And it ruins the Federal Reserve's balance sheet and it makes the dollar more vulnerable and it increases inflation.''