Somebody posted several days ago regarding “Austrian investing” and I replied talking about Jim Rogers. Lo and behold, there was a lengthy interview posted today with Jim and it also asked questions specifically about Austrian economics, central banking, and a market-determined currency.
http://www.thedailybell.com/852/Jim-Rogers-China-Opportunities-Gold-Standard-Free-Markets.html
Some excerpts:
Daily Bell: How did you become aware of Austrian, free-market finance?
Jim Rogers: Well, I studied history and economics for a few decades and one knows that there are various schools of thought and approaches. I don’t know where I first stumbled upon it, but I have a degree in history and that exposed me to a series of economic theories. Then at Oxford, I attained a degree in economics, so who knows where, exactly, but eventually I stumbled on it and the more I studied it the more sense it made.
Daily Bell: You deal with important people in the investment arena. Do they understand free-market finance? Do they know about it?
Jim Rogers: I don’t speak to many people in the investment community, I certainly speak to some that are close to me, but I don’t think most people in the financial world or the economics world, and certainly not in the academic world, give much credence to what we know as the Austrian school.
Daily Bell: Given the endless chaos that central banking causes, how can so many in the investment community continue to believe in its apparent virtues?
Jim Rogers: It’s all about the handout. XYZ bank calls up the government and says, “Save me, save me, save me!” And XYZ gets saved, and of course, that is wonderful. Heck, the reason Mr. Geitner is Secretary of the Treasury is because he kept passing out money. Of course, they want somebody like that. He is their lap dog. He’ll do what they expect. Nobody is going to say, “Oh, give us a hard nosed guy, one who says you got yourself into this, we are not here to bail you out.” I find it outrageous that 300 million Americans have to pay to bail out maybe a million people in the financial community. In fact the whole world has to pay. Since I am an American I will start there.
Daily Bell: What would you like to see happen with fiat money? Would you wish to abandon central banking? If so, what would you substitute?
Jim Rogers: Well it has only been in the last 30 years or so that the public has followed central banking. The power and prestige of central banks has grown a good deal, though now central banks, in some cases, are certainly coming under attack. The world has gotten along without the central bank for much of its history, and I think it would get along fine in America and elsewhere. We’ve had two or three Central banks in America. The first two disappeared. In my view, this one is going to self-destruct because Mr. Greenspan and Mr. Bernanke have done such foolish things. They have taken on hundreds of millions of dollars of debt. Three years ago the central bank had 800 million dollars in bonds now it is two trillion dollars and most of it is garbage – which the American people now have as their responsibility. They keep printing huge amounts of money, and who is going to pay for it all? Central bankers are just bureaucrats, people in government jobs. Greenspan was in the private sector two or three times and then found a government job. Mr. Bernanke knows about printing money but he doesn’t know much else. So I think, we would be better without a central bank.
Daily Bell: Explain how gold would fit into your larger perspective. Are you in favor of a gold standard, or a gold and silver market standard?
Jim Rogers: The world has used silver as money more than gold, because silver was the “people’s money.” The US was based on a silver standard for many decades of its existence. Gold has always been important but silver has been money more than gold. But the gold standard has never really worked in the long term, nor has the silver standard, because politicians always figure out a way to get around it. They debase it, change the rules or whatever. Just look at Rome. The whole word debasement comes from the Romans who kept substituting more and more base metals into their gold coins until by the end there was nothing but base metals. The gold standard has worked very few times in history. It seemingly was successful in the nineteenth century, but then the British started discovering gigantic gold mines in South Africa, which led to more wealth and success for the UK though not necessarily for the rest of the world.
Daily Bell: Is there a better way?
Jim Rogers: My solution would be not to dictate what people must use for money. Once you give politicians the monopoly money right, then they can do what they please. Look at what Roosevelt did in 1933, and what Nixon did when he abandoned gold. If I had my way people could use whatever they wanted as money. If you and I make a deal and I offer you seashells for whatever and you accept them then fine, that’s what we use for money. Eventually the great mass will figure out what they want to use for money and they will do so.
That website in general looks good too as it is, seemingly, free market oriented. I just figured this interview may interest those wondering about how some successful investors view economic theory in general.