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Sunday, September 27, 2009

Tiger Hedge Fund Manager Julian Robertson Predicts Armageddon - High Inflation

Tiger Hedge Fund Manager Julian Robertson Predicts Armageddon if Chinese and Japanese Don't Buy Our Debt.

CNBC's Erin Burnett (Erin Burnett Fan Club) interviewed legendary Tiger Hedge Fund manager Julian Robertson last week on Thurs 9/24/09. Robertson said the recession is temporarily over but we will see "Armageddon" if Chinese and Japanese don't buy our debt.
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Summary:

Earlier in the year Bill Gross said inflation could go to 6% or 7%. Robertson was on then and said "that would be conservative."

Robertson says we can grow and save our way out of it and that is the only way we will get out of being terribly dependent on the Chinese and Japanese.

Thinks inflation is a much higher risk than that of deflation.

Thinks interest rates will go to 15 or 20 percent if Chinese and Japanese won't lend us money.

Said US is selling mostly short term debt now because we can't sell our long-term debt to anyone but the Fed.

Said "history shows those who borrow short term usually get burned."

Said "spend, spend, spend... borrow, borrow, borrow" won't solve the problem unless we find a way to pay for the spending once we stop. Says if US savings rate goes from about 12% now to 25%, then this could help pay for the spending but it would be bad for the economy.

CDs have been a "safe haven" for those wishing to preserve assets and get a small inflation adjusted return. See "CD Rates at Largest US Banks" for the most recent table co


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US Treasury rates are so low, that they are paying less than long term inflation. See:



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