Rogers is spot on, in my opinion.

Roubini is right about there being more QE coming. He is cut from the same cloth as Bernanke. If only they can get money flowing and confidence stronger so people will start spending money again, they think the economy can strengthen and grow its way out of the problem. But we have to at least pretend we are doing something about the problem besides printing money or the rest of the world will start dumping our bonds, recognizing we are trashing the dollar and defaulting through inflation. That is why QE had to come to an end......for a little while.

Roubini says: With regards to Greece, he says it’s not a matter of if there's going to be restructuring, but rather “whether it's going to occur sooner or later, and whether it's going to be orderly or disorderly.”

Yet he fails to make the connection that the US is in the same shape as Greece.

There are some differences between the US and Greece besides size. Since they do not have their own currency they are left with only one choice to cover their deficit, they have to borrow money and when they can't borrow they have to be bailed out. The USA has two choices to cover a deficit. They can borrow the money like Greece (but there is no one big enough to bail us out) or, since we have our own currency, we can print the money (electronically) to pay the bills. Greece can never hyper-inflate as long as they are on the Euro (unless the Euro starts down the "printing to pay the bills" road too, then the whole Euro community could). Both Greece and the USA could just quit spending more than they are taking in revenues but that would cause a deflationary depression.

The REAL problem is the deficit. The debt is bad, but the annual deficit adding to it is what is killing us. When a government spends $1,670,000,000,000 more than it takes in revenues they either have to borrow or print. We have borrowed in the past. Lately they have been borrowing as much as they could then print the balance. Problem is the more we print, the more the rest of the world realizes we are debasing the value of the bonds they are buying and are are already holding so it kind of makes them not want to buy any more. The more they quit buying our bonds, the more we have to print to make up the difference between what we can borrow and what we still need to pay the bills. It becomes a self reinforcing feedback loop. Pretty soon we are printing all of it because no one will loan us money any more. One of the reasons a country cannot print itself to prosperity and the reason hyperinflation happens.

What needs to be done is our government cut in half. Cut a third would do the trick but half would be better. At half we would start paying back the debt. The problem with this of course is it would add to the unemployment (all the government workers that needed to be laid off) and throw the USA into a deflationary depression. That is not politically acceptable. So we will print money till we destroy the dollar then at a little later (but not much) date have an inflationary depression.

So it boils down to take the medicine now or take it a little later and they will choose a little later in my opinion. So QE3, 4, 5, 6, etc will come. That will get us past the next election which is of the utmost importance.

You can't solve a debt and deficit spending problem with more debt. You can solve a debt problem by printing money and debasing the value of the existing money. Imagine if you owned a printing press that printed money. You could pay off all your debt easily. You could spend as much as you wanted regardless of your regular income (deficit spending). The problem would come in when those accepting your newly created money you paid your bills with no longer would accept it because it was becoming worthless, there being so much of it around. Hyperinflation.

The debt and deficit spending has to be addressed eventually. We can do it on our own or the market can force it on us if we choose not to take care of the problem. We have let it go on so long and so deep there are no easy ways out. A deflationary depression rewards savers. An inflationary depression rewards debtors. Both are hard on everyone. While I think the potential is there to have either, who has the most votes, debtors or savers? In my opinion the more likely outcome is inflationary. There will be QE3 (by some other name to make it sound more palatable). I believe that is why Rogers says what he does and his outlook is what it is.

We have had the party and are trying to treat the hangover with more booze. Eventually we will run out of booze and reality will set in.

Not happy thoughts but there is no easy out. 

Protect yourself best you can.

John