Raw footage of Jim Rogers interview from The Housing Bubble and The Bigger Bubble docs

[Music] the debt continues to rise and we're all getting into a worse fundamental situation that he had before and we're all gonna pay for it be very careful and worried about 2013 and 2014 you you is ludicrous that you have these people in Washington him for saving the world but these are the people who few of them saw the problems coming a few of the people on Wall Street running Wall Street companies saw the problems coming and yet they've all walked away with tens of millions of dollars the guy who ruined Merrill Lynch is now extremely wealthy man the man who joins the City Bank is now an extremely wealthy man Stocki change we supposedly was a cooperative like a cooperative walked away with over a hundred million dollars it is absolutely outrageous what these people have gotten away with and now they're still turning around I mean you go down to Washington the people who caused the problem Bernanke greens well Bernanke Greenspan and Bernanke and uh guys the Federal Reserve are now supposedly saving us from from the pot they're making the situation worse they never saw it coming in the first place they didn't understand that they don't understand him and now they're making it worse the head of economist at the Federal Reserve around 2007-2008 wrote a paper saying you know we have hundreds of the finest economist PhD economists in the world here on the staff of the Federal Reserve there are people out there who say that housing is going to be a crisis that this nor is going to be a collapse and it's going to cause economic problems who are these people how can these people say something like that when we have hundreds of economist PhD economists who say it's not going to happen and this man was the chief economist of the Federal Reserve and he was and yet all of those guys are still down there they have their jobs they were totally wrong and cause these gigantic problems still there they still have their jobs and worse than that didn't have telling us how to solve the problems [Music] everybody is in favor of prosperity a chicken in every pot everybody should be a homeowner all politicians say these kinds of things and all politicians do with it and they can to make sure we all own homes unfortunately they forget somebody has to pay for this and usually when they forget that somebody has to pay for it we all this particular case we all wind up having to pay a lot huge I mean a hood and Fannie Mae and Freddie Mac they lost cost us all billions and billions of dollars you know that guy Cuomo was head of the housing of authority down in Washington huge failure got elected governor of New York the guy who is running Fannie Mae walked out of there with tens of millions of dollars I'm counting fraud the whole way and now he's walking around a very very very rich man American government and public are having to pay hundreds of billions of dollars to say and maybe more maybe even trillions with all their off-balance-sheet financing oh and nobody's paying everybody is walking away fat happy insensitive except except to taxpayers except all of us who are stuck with these jerks mistakes well that's what Congress it's wisdom decided we should all have to encourage homeownership is it good is it bad I don't know other countries don't have it but it's part of this whole thing of encouraging us all to go and buy a home and own a home these some of the things that come out of this guy's mouth it's just it's incomprehensible some of the things they say so now it's bad that people say let's say first of all that's suggest that it's bad that people save and invest for the future which of course is absolutely ludicrous every economist in the world knows you need savings and investing to build an economy the idea that people who saved in Asia led to our problems here I mean it's so laughable you would think the grown men wouldn't say things like that out loud they also say you say things like well the solution to too much debt is more debt I mean you can I tell on comprehend they did people adults would say things like that out loud and yet they do and other people listen to them now the greens fed if any one person in world history and what in the world economy in the world is responsible for what happened a single point man would be Alan Greenspan he constantly bailed people out he constantly printed money when his friends on Wall Street said they needed help starting in 87 every time there was a problem call up mr. Greenspan help save me save me save me save me and he did you know window for instance when the long-term capital management crisis hit in 1998 they all called and said save the world mr. Greenspan he pumped money into the system now if he hadn't pumped money into the system Lehman Brothers would still be in business Bear Stearns would still be in business because all of those firms would have suffered so badly and lost so much money they would have fired a lot of incompetent people capital would have been damaged and they wouldn't have been able to do all these things but mr. Greenspan road in pumped in money they were all had a big revival the stock market went up and so when problems came again he did the same thing he started pumping money money and every chance Iike and of course that men eventually all of these firms got so overextended and so leveraged and had so many people working for them who shouldn't have been working for them then in the end the whole system fell apart because consumption bubble because the housing bubble because the stock market bubble all of this time constantly printing money whenever he could if there's one person who that we can blame all this home it's alan grayson greenspan and the Federal Reserve fallen of course and helped of course by mr. Bernanke is successful well no of course people get out from mr. Greenspan whenever that was a problem he would come pumping money into the system he did it in 94 when a kid a Peabody got in trouble he did it when Orange County got into trouble every time something went wrong he would ride in it became known as the Greenspan put everybody knew that when something went wrong Greenspan would pump money into the system the way the system is supposed to work when somebody fails they go bankrupt his reorganization and you start over mr. Greenspan wouldn't let that happen he constantly tried to prevent people from failing I don't know why he mainly because the people would call him out mr. Greenspan I was never a very smart person mr. Greenspan failed on Wall Street two or three times so you know he was looking for government jobs he got government jobs because he never could make it in the private sector so when the private sector called him he was thought he was beholding to them because he thought they must be smarter than he was he was right about them but he failed them all out and it started long before long-term capital management started long before Bear Stearns started almost the first day he got into office was he took office in the summer of 1987 we had the big crash in 1980 partly because of him coming some of the things he said in public back then scared the socks off a lot of people including me he's been a disaster since he got there made a huge difference you know when the banks were told you gotta make loans you've got to give mortgages and if you don't give mortgages we're gonna penalize you you know what they did they made mortgages they made mortgages to people that shouldn't have had mortgages and then of course the people who have got the mortgage and said this is so much fun I want to mortgage I want three mortgage that doesn't matter that I don't have a job it doesn't matter that I don't have a down payment you know I like buying all these houses then of course they took him to the banks and the banks and slice them and dice them and turn them into even more leverage paper and sold a lot of it to Fannie Mae and Freddie Mac who would buy anything that came in the door they say we're told they had to and they wanted to is they thought they would make a lot of money executives could get big bonuses and the rest of us wound up stuck no of course there's nothing wrong with it unless you well there's nothing wrong with it and the people who bought them and who ate made mistakes should have been allowed to fail going to excess but if people make mistakes buying things that they shouldn't evolve they should be allowed to fail nothing wrong with the process nothing wrong with the securitization what happened was he went to excess and then rather than letting the people who made the mistakes fail the government said we cannot let anybody fail they all called up the central bank said you've got to save Western civilization in other words you got to save my job it's what they were telling them the central bank and they came and it didn't there's nothing wrong with any of this we don't have we had regulations we with all of this was supposed to be regulated banking and insurance or - and mortgages but are three of the most heavily regulated parts of the American economy that's where the problems were it wasn't so much we didn't have regulations or into sufficient regulations it was the regulator's who didn't know what they were doing who didn't enforce regulations no no there's nothing wrong with any of these things it's the first of all it's the people who went to excess who made mistakes the people who bought this stuff the people who sold this up we're selling stuff and buying stuff that they shouldn't have but let them do it if people want to make mistakes fine let them make mistakes but then don't bail them out make them go bankrupt there's nothing wrong with any of this nothing wrong with any of these instruments had come up the problem is that many players went to excess and bought and sold things that they should not have bought and so did somebody could have sat and done his homework and said okay these things I wouldn't buy these things look there were plenty of people at the time who could see that these things were going to fail many people made a lot of money because they could see that these were going to fail there's nothing wrong with the instruments it's what happened with the instruments and in fact it shall I say however people bought them and sold them there were plenty of people who knew that this was going to collapse but they they first of all they weren't listened to at the time and the second in the second of all you know in fact they were laughed at in many cases and second of all people bought them anyway [Music] sure first of all wouldn't when there's too much speculation in the market the market who raised marginal farmers mr. greenspan refused to raise margin requirements he even said a couple of times as the bubble stock market bubble was taking up so well we could raise Marjorie promise but I don't think it'll do any good what he was telling me wrong about that race and Marcin promised has always had an effect especially if you raise him high enough he should have done that back in the depression of the bubble in 29 I should have raised margin requirements before that you could find out that what they did back then Bernanke says they should have trended more money so he's now printing but he doesn't understand that was a question of Solomon see this this is a question of of too much leverage and mr. Greenspan and mr. Bernanke yet have taken the wrong actions because they misinterpreted what was the problem and instead of solving the problem they made the problem worse I would have done away with glass-steagall I certainly think that the markets should be open and free they are in other parts of the world the other parts of the world didn't do didn't have glass-steagall and they seem to survive quite well and didn't seem to have grown and done well and been very competitive in fact they became more and more competitive with the u.s. reason class the reason we had problems in the financial community in the first decade of the 21st century was not because they repealed glass-steagall because many other things happen including this whole absurdity that you had that people had their own houses and banks had to pay for them or had to make loans whether they wanted to or not well we've already been on the stock market has been going sideways for 13 or 14 years now so we have to some extent a stagflation now we do have inflation either even though the government allows developers nearly every country in the world has inflation and they acknowledge that they have inflation I find it incomprehensible but it could be the only country in the world it doesn't have inflation when everybody else does and everybody else acknowledges it so we have stagflation now the economy's been going sideways people standard of living is stagnate and this period of time so we've got stagflation now and it's going to get worse we certainly should be interest rate should not be so low first of all you in America we have tiny interest rates and the effect of that is to destroy the class of people who save and invest for the future tens of millions of Americans didn't go deep into depth they paid their mortgages they didn't buy four or five houses with no money down and no jobs they did everything right they paid for their kids going to college that class of people is being destroyed because interest rates are minuscule they save looking for the future and now they're being wiped out at the expense of their doing it their expense in saving the people who did all the things wrong the people who whip and borrowed big money defaulted on their loans caused huge problems in the financial markets we're saving them and destroying the people who save and invest for the future this is going to have very bad consequences for society it always has throughout history when you wipe out that class of people and we're doing it right now so interest rates are much much too low right now we do have inflation mr. bocal came in we had inflation and he was told you know he was just a bureaucrat so he did what he was told he said they said to him destroy inflation he raised interest rates and kept raising interest rates until he finally popped the inflation problem he didn't do it by himself he would like to give him credit from lots of other things happen the bear market came back to commodities he suddenly had we finally had some extra supply of oil the North Sea oil started flowing Alaskan oil started for him so we had a lot of extra supply coming into the commodities markets which follows them to go down at the same time he raised interest rates as high as he could cutting to man so he he basically helped kill inflation with his actions do we need another Paul Volcker yet in my view them as I said the current Federal Reserve is are we exactly the wrong thing they should be letting what they should be doing is letting the market determine interest rates but if they're not going to do that they should be raising interest rates to reflect real inflation and stop wiping out the people who save and invest the first thing we should learn is that there are only B ought to be a lot of people going to jail right now if they is savings and loan crisis thousand at least I mean hundreds of people went to jail because they committed criminal acts there was lots of prosecutions and we help clean out the system this time around virtually nobody has gone to jail so far anyway there are lots of people we all know who took millions tens of millions out of the system with at least marginal acts have not totally dishonest act this time around nothing's happened we I don't know why we don't have a lot of people going to jail the crisis caused by people in the last five or ten years is much much worse than what happened with the Savings and Loan problems back in the early nineties sarbanes-oxley is one of the reasons that much of the American financial transactions are moving offshore look we didn't need sarbanes-oxley at all it was all it was always against fraud was always it always against the law we had those laws in place he just came a couple of with more complex more convoluted and complicated laws which means that scare people away and frog was always against the law so they didn't have to have you in special laws recently when Lehman happened to be the first one to go Bear Stearns was the first one to get in trouble and when they saved them it was a huge amount of criticism and remembers Republicans have saved him so they will call them much much much more criticism because Republicans are not supposed to bail out people who have failed so when Lehman and Lehman was the next to come up and so when they came up my my view is it in Washington say well you gotta let somebody fail because if we don't you know they continue to Yelp at us and we bail out another one we're going to suffer very very badly at the pose and our image and our voting our voters will be very unhappy so since Lehman was the next to come along they had to let them fail well whatever tarp was so down it was a mistake the basic mistake was that they bailed out people who failed but the way the system is supposed to work when people fail smart competent people come in take over the assets reorganize the assets and start over again from a sound base what they're doing this time around is when people fail they take the money away from the competent people given to the incompetent people and say to the incompetent people okay now you can compete with the confident people with their own money I mean this is outrageous morality this is how becoming politicians don't care about morality it's outrageous economics it has never worked when you try this you know they tried it in Japan and the 420 Japan's had two lost decades because they refused to let anybody fail we're gonna we've already had one lost decade we're gonna have to we may have a lost century at the rate we're going no this is bad economics bad morality and it's not going to work most of the stimulus bills were paying off political allies I mean a lot of the stimulus bills under Obama and even under some wonder Bush went to the state governments so that they could retain the bureaucrats I think something like 40% of the money went to the states so that they didn't have to fire bureaucrats I hardly call that stimulus you know in Asia they'd saved a lot of money for a rainy day and when it started raining they started spending the money but most of the money they spent was to increase future productivity and future competitiveness whereas in America there's a hiring bureaucrats is not going to help police our competitiveness down the road but that's a lot of what we do now they were just throwing money out as fast as they could because somebody told of Western civilization is going to class I want you to know we've had banks fail for centuries insurance companies fail for centuries it may be very painful for a while but so what the world gets over and starts over from a sounder base in Scandinavia in the early 90s they had the same problem they let people fail lots of people failed they had a horrible three-year period when the people were getting wiped out but then after that they had a wonderful 15-year rise because they'd started from a sound base the Japanese at the same time had two lost decades because they refused to that people face you godfrey is going to be a nightmare and disaster for all of us finance is not a good place to be anymore because the politician other reasons too where politicians keep coming up with all these insane regulations controls and taxes that are going to make finance a terribly bad place to be dodd-frank I think was 2700 pages most of the congressmen had not read it it was full of provide provisions that they were going to have to let people special committees study this issue and come up with the regulations even these are regulations are not even going to congressmen they're just going to be all sorts of bureaucratic and academic requirements going forward and it's listen American Finance is going to be in a decline a relative decline for two or three more decades just like after coming out of the depression out in the 30s it passed all these regulations most of which turned out to be observed which made finance not a very good place to be the same thing is happening now plus other things finance is not going to be and of course is driving a lot of business outside of America ten years ago most large IPOs internet initial public offerings were done in New York now very few were done in you are they've done outside of the US because they keep coming up with these absurd regulations that nobody wants to raise money in the US it's a nightmare quantitative easing is another absurd thing we're doing they say they're saving us mr. Bernanke is down there printing money buying up junk assets ten years ago five years ago the federal the central bank had on its balance sheet eight hundred billion dollars of government government bonds now it's got over three trillion of assets trillion with a T and most of its garbage which all of us are going to have to pay for someday because much much of it is going to turn out to be worthless or at least they're going to take big losses on quantitative easiest more money pumped into the system artificial money pumped into the system money being printed if you will it's going to lead to more inflation more failures more taxes that we're all going to have to pay to save mistakes by unelected unaccountable central banks who don't know what they're doing the main causes we're getting good news but rumor there's an election in November of 2012 whenever there's a reflection the politicians spend a lot of money print a lot of money trying to get reelected put out a lot of good news the inflation numbers are obviously absurd the unemployment numbers if you get into the unemployment numbers you see that they're jiggled and manipulated no I mean they've got all these things like the births and deaths adjustments these numbers yes isn't there's good news coming the reality behind the good news is not so good the debt continues to rise and we're all getting into a worse fundamental situation than we had before and we're all going to pay for it be very careful and worried about 2013 and 2014 I don't find that terribly worse am i bad if I were a banker I'd be glad they're paying interest on reserves it seems to me that they should be paying interest on reserves the basic problem is we shouldn't have the central bank in the first place the free market the market can take better care of interest rates in the currency and the central banks now we've had two central bank's the three central banks in American history the first to disappear this one's making many many serious mistakes and if you ask me it's going to disappear too because they make certain make such foolish mistakes we a world without central banks has problems for the world with central banks has demonstrated by the current central bank in America is going to have worse problems say printing so much money they are buying so many garbage assets which somebody has to pay for of issued now this central bank is making worse mistakes it will be good for all of us when this central bank eventually disappears us long-term the bond market is certainly a bubble I cannot conceive on lending money to the United States government in u.s. dollars for 30 years at 3 or 4 or 5 you new name the interest rate it's just a ludicrous admit us it's the largest debtor nation in the history of the world now if these debts will never be paid they may be inflated away they may be defaulted but they can never ever be papered another bubble which I see for me is tertiary education in America I mean you know we're all told we have to go to college just like we were all so we had to buy a house or should have house well all of these free loans and free education has made the price of education go through the roof you know to go to an Ivy League school now it's going to cost you three or four hundred thousand dollars before you're out over the next few years the way tuition and everything keeps going higher and higher many these people coming out with staggering debts they're not gonna get jobs that they can ever pay these debts up no the tertiary education in America is another bubble which is which is developing football clubs at the U in Europe you know soccer teams everybody's paying absurd prices for soccer teams that you go gigantic yeah I guess the same thing is happening in Americans and choices people be keeping remarkable prices with the idea that they'll be able to sell them to some other person if you will that's certainly a bubble the second place I'm sure there are many others I just can't think are them off the top of my head well China has been trying to cool its economy off rightly so I've been trying to pop the real-estate bubble it seems that they're being successful at that they've been trying to cool inflation doesn't seem well I've been somewhat and successful we're not not very successful in my view but the Chinese economy is still going to be continue to be strong within the US economy I don't know that they will continue to buy a large amounts of the US government yep they know the problems that the u.s. faces now they know that the u.s. is the largest debtor nation in the history of the world they know that money's being printed so it's not so much their ability to buy our debt will they buy our debt the Chinese economy is going to have slow downs as we go for him you know in the 19th century America had many depressions with a deep we had plenty of problems but China was certainly having problems going forward there will be times when good sense rule available and they will cut back I don't think it's so much they cannot buy our debt is that just are not going to buy yeah because they're better things to do with the money but there will certainly be slowdowns in China that could be recessions in China China's not some doesn't have some magic one that they never have the same problems that everybody else has yes I've said that the Chinese call themselves communism but I assure you that they are among the best capitalists in the world there are people who say that they are the best captains in the world as we speak and yes there are more regulations more absurd things going on in places like California it's all right child you say I know business people who say I'd rather do business in China or just about anywhere in the world because it's more open than other places in the world maybe someday they'll have massive numbers of regulations and controls and absurdities but at the moment most people find it easier to do business there there's nothing else China is opening up becoming more capitalist while California and Massachusetts in other places more restrictive less open you it's pretty clear that it's simple arithmetic a distinction it's pretty clear a simple arithmetic is simple actuarial calculations Social Security's bankrupt the way benefits our plans are now and plotted now they cannot pay them all whether it happens in 2020 or 2030 or 2040 is not that relevant it cannot work the way it's going now America it the obligations in America has number in the trillions with a T including the off-balance-sheet and the many other obligations which the American government has accepted and guaranteed America cannot pay these debts their trillions and trillions of dollars Social Security is one of those things where they have promised XY and Z and they cannot meet the promises that they have said it's arithmetic it's not rocket science this is arithmetic figure it out who knows whether you can and I think that the market is not going to let him do that but that suppose he does what at least who is even higher and higher death instead of taking the pain now cutting back spending cutting back taxes and stopping this gigantic skyrocket of debt and prop potential problems it's better to take the bite the bullet now let's say he can keep the race now it's gonna be that much more depth and eventually rates are gonna go higher I haven't I mean I I haven't done the arithmetic the plenty of people have done the arithmetic then when rates go back to even three percent that has a staggering effect on the interest payments of the United States government and that's just more of the obligations that are going to make America face more crises and more semi crises yes whenever you pass regulations smart people try to find what he's around them it's been happening for a few thousand years throughout history if you tack something you have less of it people are pretty smart they figure out ways to get around the politicians and the bureaucrats and anything you do somebody's gonna figure out a way to get around no of course I'm not in favor of raising taxes I'm in favor of cutting taxes American public can decide better what to do with his money than now and obviously the people in Washington DC so you need to cut spending and you need to cut taxes I don't see any reason to raise taxes at all you need to cut taxes well Canada's much more been much sounder managed in the past 15 or 20 years in the US has partly because they were forced to I mean they essentially went bankrupt in almost bankrupt in the early 90s so they were forced to reform and run a tight ship and they have lots of natural resources so Canada certainly a better place than the US I would be a little bit worried about you in Canada I suspect you're going to see real estate problems there they've had a real estate almost a bubble there I say bubble and things have gotten really hot in Canada so I suspect you're going to see some some problems and for the answer and even in homeownership intelligent if the problems would not be like they were in the US because they don't have the same excesses that we had yep but they will have problems I do think you will see more and more people going to Canada you already do because nothing else they're receptive to immigration they encourage immigration we at the United States are doing our best to discourage immigration I would anybody wanted to move to the u.s. move to the u.s. like it was you know it's only been in the past and did they pass those furballs restricting immigration they started in the 20s for 100 150 years America was an open country anybody wanted to come here good and in fact we encourage people we gave people land the Homestead Act gave people land they would come to America settle and improve the man and improve their lives the Canadians are doing some of that now they are encouraging people to come together they won't come an immigration is good for a question you need new brains you need the people emigrate to a new country are ambitious driven hard-working people or they would pack up and brave but they wouldn't pack up and leave everything that make this is secure for them so countries are built by immigration new capital new brains new ideas new energy I'm all for immigration well the Canadians and much more receptive to immigration now we in the US are going to be the other way and starting to close off well everything is facing a bigger crash in the future mainly maybe not percentage-wise for home prices like they crashed already but when the next time we have a economic slowdown in the US is going to be worse than before 2002 we had a slowdown 2008 was worse because the debt was all the way up here for the next time around the debt is philippi way up there and so the next economic slowdown is going to be even worse and a lot of things gonna crash in price including homes again but it's it's not you know we don't have the massive overbuilding and speculation we had before but we still have too many homes we still have some problems so yes prices can go down again in the next recession they will but everything will go down in the next recession in the 1920s and 1930s at the center of the world moved from the UK to the u.s. exacerbated by a financial crisis and mistakes made by politicians most people didn't notice the shift at the time we have another historic shift taking place now from the u.s. to Asia the largest creditor nations in the world now are China Korea Taiwan Hong Kong Japan Singapore that's where the assets are that's where the energy is that's where the ambition is you know who the debtor nations are and where they are the largest debtor nation in the history of the world is the United States so we have another shift to Asia which again some people are talking about some people are trying to stop but exacerbated by a financial crisis and mistakes made by politicians throughout history we've had long periods when the financial types were in charge followed by long periods when the producers of real goods were in charge farmers miners etc again and followed by when the financial types were charged the moment the world is shifting again finance is going to be a bad place to be for the next 20 or 30 years you know in the 30s 40s and 50s finance was a backwater Wall Street was a backwater nobody went in the City of London was even worse and in those days then along came the bull market in the 80's 90's etc and Finance became a great place to be but in 1958 in America produced 5000 MBAs per year the rest of the world produce enough last year America would use 200,000 MBAs a year and the rest of the world produced tens of thousands they have massive competition in finance at a time where the debts are staggering huge debts and finance and huge leverage and of course politicians around the world are coming down hard on Financial Times they are passing taxes regulations controls everybody sarbanes-oxley dodd-frank they're coming up with all sorts of things to punish and restrict finance so finances that is going back into decline and it will be in decline for a long time and the people who produce real goods are on the rise yeah the taxi drivers are going to be stocked for exon brokers the smart X stockbrokers will learn to drive tractors so that they can drive tractors for the farmers who are going it's going forward you

Channel: TheBubbleFilm

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Keywords: Ron, Paul, Ron Paul (Physician), Jim Rogers, Peter Schiff, Marc Faber, Doug Casey, Free Market, Economics, Austrian Economics, Investing, The Bubble, Finance, Libertarian, Conservative, Economy

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Length: 40min 0sec (2400 seconds)

Published: Tue Sep 11 2012