Jim Rogers Shorting GE, JPM, IBM, Covered Treasuries

Jim Rogers, the famed investor and writer,  is always informative and fun to watch. Below is a recent Bloomberg interview.

Jim Rogers continues to be bearish on US stocks, but has covered his short position in long term Treasuries "because of Mr. Bernanke." Presumably that means Rogers thinks the Fed can keep yields low by buying Treasuries. He also briefly mentions that he's shorting IBM, GE, and JPM.

Rogers says Tim Geitner doesn't know what he's doing, and is responsible for our current situation because of his role as the NY Fed president. That seems correct to me.

Rogers also repeats his solution: let all the insolvent companies fail. Wipe them out and we'll have a fresh start. The economy will start growing again. He didn't mention Korea this time, as an example of a country that let its businesses fail and then had a great growth rate.

I agree, but here's a caveat about growth. Let's say we're at 100 right now and letting everyone fail takes us to 25 (made up numbers, just for the sake of an example). Let's say after that we grow 10% annually (an awesome growth rate). It would take us over 14 years to get back to where we are. This is to say, just because an economy is growing it doesn't mean that it's better off than it was a few years ago. Nevertheless, if we don't let the incompetent fail and keep them around as zombies, we might very well get to 25 anyway, but over a longer period of time. And then we might not grow at all. Look at Japan.

One thing is clear, as Rogers has been saying; you can't solve a problem caused by too much debt and consumption by more debt and more consumption.

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