American investor and financial commentator Jim Rogers (ChinaFotoPress/Getty Images)
The Federal Reserve is pumping up the economy and financial markets with its massive easing tactics, and central bank Chairman Ben Bernanke might not seek another term because he doesn't want to deal with the "hangover" aftermath of his policies, says legendary investor Jim Rogers, chairman of Rogers Holdings.
"Right now we have a very artificial situation. You have the central bank in America printing staggering amounts of money," he tells Newsmax TV in an exclusive interview.
"There's this gigantic artificial flow of money floating into our economy, and this is going to end badly because it is artificial."
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The Fed is currently executing quantitative easing (QE) to the tune of $85 billion of purchases of Treasurys and mortgage-backed securities a month.
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Rogers isn't sure when it will end. "Mr. Bernanke has said it's going to go on to 2015," Rogers says. But some Fed officials have voiced hope that QE can be curtailed starting this year.
These folks "are not happy about this staggering amount of money-printing because they know it's going to have bad consequences," says Rogers, author of the new book “Street Smarts: Adventures on the Road and in the Markets.”
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"It seems that Mr. Bernanke may be leaving in a few months. I guess he wants to get out before he has to deal with the hangover or the aftermath." Bernanke's term ends Jan. 31, 2014, and the consensus is that he doesn't want to serve another.
"I don't see how it can last much more beyond this year," Rogers says. He sees two possible scenarios. In one, "the market's just going to say, stop, we won't take this anymore, and bonds will go down despite the central bank."
In the second scenario, "the public is going to say, wait a minute, we don't want this paper money anymore. It's too absurd, and prices will go higher, and you'll have more and more unrest in the world."
In any case, Rogers foresees a brutal period ahead for bonds. "Not this month, but it's certainly going to go back into a bear market. . . . It's going to go on for a long time, and it's going to be extremely painful for a lot of people."
More from the exclusive Newsmax TV interview:
• Jim Rogers: Fed's 'Artificial' Inflation of Economy Will 'End Badly'
• Jim Rogers: Euro Won't Survive as Currency War Rages On
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