Published January 10, 2009

Big-time investor Jim Rogers not impressed

JIM Rogers, one of the world's best known investors, has voiced scepticism of President-elect Obama's proposed fiscal stimulus, saying that the debt that would be incurred was too inimical to be ignored.

Mr Rogers made these comments on the sidelines of the 2nd Global Forum on Intellectual Property (GFIP), after delivering his keynote address.

Such deficit spending, when coupled with the fact that America was already the 'largest debtor nation in the world', would, in effect, lead to 'debasement of the dollar', he said.

He added that he was not the only person concerned about the strength of the dollar - even his young daughters chose to keep their money in Singaporean, and not American, bank accounts.

He also registered his unhappiness with government bailouts of both the financial services and car industries, saying that such a move would make it difficult to 'clean out the system'.

To substantiate his assertion, he made reference to the attempt of the Japanese government to save failing businesses by subsidising them in the 1990s.

This is generally regarded as being a failure, and many of these 'bailed-out' companies did not perform - in fact, they were termed 'zombie companies'.

When asked whether the Madoff and Satyam scandals indicated that more regulation was necessary, Mr Rogers replied that competent, not more, regulation was required. Satyam had been audited by PwC, and the SEC had investigated Madoff's fund multiple times before.

That regulators were not alerted to the fraudulent activities of the firms showed that the regulators weren't able to catch up with those they regulated, he noted. 'The smart guys go to Wall Street, not Washington,' he said.