Jim Rogers: 'Britain is totally insolvent'
By Andrew Oxlade
7 December 2010, 6:26pm
US speculator Jim Rogers is known for his outspoken views but today went further than usual suggesting Britain is 'totally insolvent'.
Speculating: Jim Rogers
WANT TO KNOW MORE?
Bankrupt Britain: what would it mean?
In an interview on business TV channel CNBC, Rogers, who made his name making millions while partnered with legendary financier George Soros, suggested Britain was the true sick man of Europe.
He said: 'Greece is insolvent, Portugal has a liquidity problem, Spain has a liquidity problem, Belgium has been cooking the books for a long time, Italy has been cooking the books for a long time and the UK is totally insolvent.'
Rogers, who has repeatedly warned that inflation and commodity prices will race ahead in coming years, was being interviewed about the next stage of the European debt crisis.
So far Greece and Ireland, with bond markets indicating their fears that the governments will not repay debts, have had to ask for bailouts from the European Union. Debts in Spain are far lower but rising rapidly, sparking concerns that it, as the euro zone's fourth largest economy, may also run into trouble.
Rogers said: 'You need to let Ireland go bankrupt. They are bankrupt, why should innocent Germans, Poles or anybody pay for mistakes made by Irish politicians and banks.'
Rogers has been criticised for making attention-grabbing remarks. But his views are not entirely without basis.
While debt owed by the British government is less, relatively, than the amounts faced by Ireland, Greece or Japan, the UK's debts in total are 466% of annual economic output once consumer debt is included. That's second only to Japan. [Find out more on this map - The Economist]
Britain has so far escaped the wrath of bond markets, partly because it is has particularly long dates on its gilts, reducing the need to keep asking for more money, but also because of the belief that the large and efficient British economy will deliver strong growth that will produce rising tax receipts to pay of government debt and rising incomes to pay off consumer debt.
But Rogers has previously raised conerns that with North Sea oil nearing the end of its useful life, Britain has 'nothing left to sell'. [Read more]
Rogers will also find sympathy for his opposition to quantitative easing. He believes the Federal Reserve's latest $600bn programme will stoke inflation and create financial misery for millions.
'It's dumbfounding and stupefying to me that you have a central bank in the United States that thinks that all it needs to do is print money,' he said. That has never worked, never worked anywhere in the world in the long-term or the medium-term.'
By Andrew Oxlade
7 December 2010, 6:26pm
US speculator Jim Rogers is known for his outspoken views but today went further than usual suggesting Britain is 'totally insolvent'.
Speculating: Jim Rogers
WANT TO KNOW MORE?
Bankrupt Britain: what would it mean?
In an interview on business TV channel CNBC, Rogers, who made his name making millions while partnered with legendary financier George Soros, suggested Britain was the true sick man of Europe.
He said: 'Greece is insolvent, Portugal has a liquidity problem, Spain has a liquidity problem, Belgium has been cooking the books for a long time, Italy has been cooking the books for a long time and the UK is totally insolvent.'
Rogers, who has repeatedly warned that inflation and commodity prices will race ahead in coming years, was being interviewed about the next stage of the European debt crisis.
So far Greece and Ireland, with bond markets indicating their fears that the governments will not repay debts, have had to ask for bailouts from the European Union. Debts in Spain are far lower but rising rapidly, sparking concerns that it, as the euro zone's fourth largest economy, may also run into trouble.
Rogers said: 'You need to let Ireland go bankrupt. They are bankrupt, why should innocent Germans, Poles or anybody pay for mistakes made by Irish politicians and banks.'
Rogers has been criticised for making attention-grabbing remarks. But his views are not entirely without basis.
While debt owed by the British government is less, relatively, than the amounts faced by Ireland, Greece or Japan, the UK's debts in total are 466% of annual economic output once consumer debt is included. That's second only to Japan. [Find out more on this map - The Economist]
Britain has so far escaped the wrath of bond markets, partly because it is has particularly long dates on its gilts, reducing the need to keep asking for more money, but also because of the belief that the large and efficient British economy will deliver strong growth that will produce rising tax receipts to pay of government debt and rising incomes to pay off consumer debt.
But Rogers has previously raised conerns that with North Sea oil nearing the end of its useful life, Britain has 'nothing left to sell'. [Read more]
Rogers will also find sympathy for his opposition to quantitative easing. He believes the Federal Reserve's latest $600bn programme will stoke inflation and create financial misery for millions.
'It's dumbfounding and stupefying to me that you have a central bank in the United States that thinks that all it needs to do is print money,' he said. That has never worked, never worked anywhere in the world in the long-term or the medium-term.'
