Jim Rogers on Fed Policy: 'This Is Absolute Insanity'

"This is absolute insanity, what's going on," he told Reuters TV.

"It's not just the Fed, it's central banking. This is the first time in recorded history that all major central banks are printing a lot of money trying to debase their currencies. The world's floating around on a huge artificial sea of liquidity."


The European Central Bank cut its benchmark interest rate to a record low Thursday.

And what's the end game?

Eventually, Rogers asserts, "it's going to dry up. And when it dries up, we're all going to pay the price for this madness."

He doesn't expect the Fed to taper its quantitative easing anytime soon. The central bank is buying $85 billion of Treasurys and mortgage-backed securities a month.

"Mr. Bernanke's certainly not going to do it. He wants to get out while he can before it all falls apart," Rogers said. Fed Chairman Ben Bernanke's term ends Jan. 31. President Barack Obama has nominated Fed Vice Chair Janet Yellen to replace him.

"Mrs. Yellen undoubtedly will not do anything at first because she knows – I hope she knows – that this is going to cause problems when they stop producing so much money," Rogers said.

"So I would suspect they will go home for a while—maybe [until] 2015."

And what's going to happen when the Fed finally shifts policy? "The markets are going to react and react pretty badly, and then they'll probably loosen up again," Rogers said.

"These are not very smart people. They're government bureaucrats, and they think like government bureaucrats."

So what should investors focus on next year?