Wednesday, May 20, 2009
Next Financial Meltdown will be in the Currency markets: Jim Rogers
"At the moment I have virtually no hedges, I suspect it is going to be the next problem, big crisis will be in the currency markets, I'm trying to figure out what to do there," Rogers told "Squawk Box Asia".
Rogers has bought the yen because he expects the Japanese currency to withstand future problems, but he does not have short positions in any currency and is currently not buying the yen any more.
"I'm certainly not short in the dollar — not at the moment, although it may be the peak. We may have come to the peak," he said. "I don't plan to own the yen forever, because you know the Japanese, Japan has some huge problems down the road."
For the moment currencies may look safer than anything else in the markets, as stocks may face a new bottom since they were artificially lifted by the amount of money created by central banks, but there are pitfalls ahead, he said.
"If I am right, you're going to see a lot of currency problems in the next decade or two," Rogers said.
"Governments around the world are doing their best to destroy currencies, many currencies in fact. And people need to understand that; if they don't understand it now, they're going to find out, they're going to find out the hard way," he added.
source with some modifications
Buy Yuan and Beware of Boys, Rogers Tells His Daughters
Say the name Jim Rogers, and these thoughts might come to mind — billionaire, China, author, adventure capitalist, George Soros' one-time partner, investment guru, man in bow tie ... but how about father?
And father he is to two little girls, Happy age 6, and Baby Bee age 1. He's even written a book for them — A Gift to My Children: A Father's lessons for Life and Investing.
And what investment advice would he impart to his daughters? Rogers sat down and shared with CNBC.com some of his thoughts on this, beginning with, buy renminbi if you get the chance.
"I own the Chinese renminbi. It's not that easy to buy and sell the renminbi because it’s a blocked currency. But I own it and every chance I get to get some more renminbi, I do so." Rogers says.
"The renminbi is eventually going to be the next reserve currency of the world. Twenty years from now, perhaps fifteen years from now, the Chinese are opening up there currency more and more every month, every year. And that’s going to continue ... who knows how high it will go," Rogers adds.
With China, currently the largest creditor nation in the world, and with a balance of trade surplus to boot, Rogers would rather own the renminbi (also called the yuan) than many other currencies.
But he adds that he doesn't understand why China has a blocked currency. Currently, there are restrictions on money leaving or entering the country and as such, the renminbi is not fully convertible.
"China has not made many serious mistakes in the past two to three decades but this is one of them. I don't know why they still have a blocked currency. This is not 1979, it’s not even 1999. It's 2009 and China doesn't need to do that any more," Rogers says.
More of Jim Rogers' Outlook on CNBC.com
Is It Safe to Invest in China?
China's rally is not fundamentally driven but liquidity driven, and Jerry Lou, China strategist of Morgan Stanley warns that this will quickly turn into boom and bust scenario. Lou & Jim Rogers, chairman of Rogers Holdings share their views on investing in China, with CNBC's Amanda Drury & Sri Jegaraja
China and India Cannot Save the World Economy says Jim Rogers
China and India will be the only two Asian economies that will register growth this year, believes Justin Wood, Southeast Asia director at Economist Intelligence Unit. But Wood & Jim Rogers, chairman of Rogers Holdings warn CNBC's Amanda Drury that both countries won't be able to save the world.
Choose Silver Over Gold says Jim Rogers
Jim sees better returns in agricultural commodities and silver. Rogers & Michael Yoshikami, president & chief investment strategist, YCMNet Advisors talk strategies with CNBC's Martin Soong, Amanda Drury & Sri Jegarajah.
commodities guru and wall street king Jim Rogers said that the stock market has yet to hit a bottom despite people ploughing their money back into a sucker’s rally .Rogers said that central banks “flooding the world with money” only attempts to solve the problem of too much debt with more debt and “defies belief,” adding that the method will not work because governments have failed to address the underlying problems that caused the crisis in the first place.
Rogers told CNBC he was still favorable towards commodities and precious metals because they were the only sector where fundamentals were getting better.
“I mean … you give me 5 or 6 trillion dollars, I’ll show you a very good time, there’s no question about that,” Rogers said.
“I’m not buying shares if that’s what you mean. Not at all,” Rogers told Squawk Box Asia.”The bottom will probably come later this year, next year, who knows when,” he added.