Banks Rescue Will 'Make Things Worse': Rogers

Thursday, Jan 7, 2010  |  Updated 2:38 PM PDT
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The new financial rescue plan may not work and could even make things worse because it plunges the US further into debt and it is designed by the same people who failed to forecast the crisis and take measures, legendary investor Jim Rogers told CNBC Tuesday.

Treasury Secretary Timothy Geithner will unveil a long-awaited package of measures to help the financial sector at 11 am New York time.

But Rogers said Geithner, who was president of the New York Federal Reserve Bank, "has been dead wrong about everything for 15 years in a row," and so was President Barack Obama's economic advisor Lawrence Summers, who acted as Treasury Secretary at the turn of the century.

"It is mind-boggling to me," Rogers told "Squawk Box Europe."

"If I were on your show 15 weeks in a row and was wrong, you'd probably never invite me back. These guys have been wrong year after year after year consistently and here they are making the same mistakes again. This is not going to solve the problem, it's going to make it worse."

Video: click here for the first part of CNBC's Jim Roger's interview and here for the second part >>>

He said he was not contemplating investing into financials, as bankruptcies were still possible, and banks were still trying to find out how affected they were by the crisis.

"What's happening is they've all panicked, cutting back everything, trying to see what they've got," Rogers said.

Big companies such as AIG (NYSE: AIG) or Fannie Mae (NYSE: fnm) as well as other US banks don't know how to value their assets, he said.

"Everybody is frozen, trying to figure out ok, what are we worth, what do we do?"

In addition, the recent shifts towards protectionism are harmful, Rogers warned.

"This is very dangerous, that's what caused the great depression in the 1930s. If it happens again, then you'd better sell all the stocks, you'd better sell a lot of everything and bunker down," he said.

"We already have a lot of social unrest developing. If protectionism comes back, you'd better be really, really careful," Rogers added.

  • Trading with the Experts - Here
  • Cramer: Who's More Important to Banks than Geithner?

For more stories from CNBC, go to cnbc.com.

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