Jim Rogers: The dollar is set to rally now... but it's a "total disaster" in the long term

Jim Rogers: The dollar is set to rally now... but it's a "total disaster" in the long term

Advertisement Wednesday, May 11, 2011 Text Size:   From Bloomberg: The U.S. dollar is going to be a "total disaster" in the long term because of the country's position as the world's largest debtor and the policies being pursued by Federal Reserve Chairman Ben S. Bernanke, according to investor Jim Rogers. The Chinese yuan is likely to be a "safe" currency, although it is difficult for investors to buy, Rogers, the chairman of Rogers Holdings, told a conference in Edinburgh. "The situation is getting worse and I expect to see severe problems in the U.S.," Rogers said today. "Dr Bernanke doesn't understand economics, he doesn't understand finance, he only understands printing money and we can't quadruple the amount of money in the next slowdown." U.S. government debt is currently 93 percent of gross domestic product compared with 60 percent before the financial crisis and is set to rise further in the next few years. The dollar has fallen over the past year against every currency in a basket of 16 major currencies. The euro has gained about 7 percent against the dollar this year. It traded at $1.4311 as of 3:20 p.m. in London. "I expect to see more currency turmoil maybe this fall, and more turmoil by 2013," said Rogers, who favors currencies and commodities. Rogers said he is currently buying the dollar because the market consensus is for the currency to fall. Rogers said he is "short" emerging markets, except for China, and U.S. technology stocks as a hedge against his other positions. "Bonds in the U.S. have been in a bull market for 30 years," said Rogers. "In my view that's coming to an end." Rogers is only buying government securities now because 95 percent of the market expects them to decline, he said. Rogers said he couldn't forecast when the bull market in commodities will end. "I know the signs to look for," he said. "I hope I am smart enough to recognize them." "Great fortunes" will be made in agriculture and alternative energies, such as solar power and wind, over the coming years, Rogers said. To contact the reporters responsible for this story: Peter Woodifield in Edinburgh atpwoodifield@bloomberg.net; Rodney Jefferson at r.jefferson@bloomberg.net.

Jim Roger's views

See link for Jim Roger's view of China, US, UK and Australia.

"Plato said in The Republic that the way societies revolve is they go from dictatorship to oligarchy, to democracy, to chaos and back to dictatorship.'' China, according to Rogers, is in the early stages of oligarchy. And, America, if it's not careful, is heading for chaos.

Reserve earns praise, but not our politicians

Traders are Losers

Journal of Finance study concluded "Trading is hazardous to your wealth." 

http://faculty.haas.berkeley.edu/odean/papers/returns/Individual_Investor_Performance_Final.pdf

Rates of trades return were about 6.5% less than the overall market.  This is due to transaction cost, higher risk, poor money management, stop losses, and position sizing.  Furthermore, individuals compete against large investment bankers, and other investors.  One stat that is often quoted is that 90% of traders lose. In addition, they are spending lots of time and effort on an unrewarding venture.      


There is a better way.   



Jim Roger, has been successful on investing, and here is what he says you should do to be successful:

Take your money, put it in Treasury bills or a money-market fund. Just sit back, go to the beach, go to the movies, play checkers, do whatever you want to.

Then something will come along where you know it's right. Take all your money out of the money-market fund, put it in whatever it happens to be and stay with it for three or four or five or 10 years, whatever it is.

You'll know when to sell again, because you'll know more about it than anybody else. Take your money out, put it back in the money-market fund, and wait for the next thing to come along. When it does, you'll make a whole lot of money.

Another successful investor is Warren Buffett. What does he say?

Your default position should always be short-term instruments. And whenever you see anything intelligent to do, you should do it.

It is well known that Buffett follows his own advise and that in Berkshire Hathaway they are sitting on cash and equivalents of more than $46 billion, which is about 27% of the company's current market value. 

Now the issue is being patient, waiting for the right opportunity, recognizing it and then acting on it, and again being patient.  Like what Buffett has said, you should be investing base on buying a business. 

Jim Rogers on Greece and the EU Debt Crisis

Jim Rogers on Greece and the EU Debt Crisis

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Jim Rogers: Diversification a Scam

Diversification is something that stock brokers came up with to protect themselves, so they wouldn't get sued for making bad investment choices for clients, says commodities bull Jim Rogers.

"Henry Ford never diversified, Bill Gates didn't diversify," Rogers told Business Week.

"The way to get rich is to put your eggs in one basket, but watch that basket very carefully. And make sure you have the right basket."

Rogers notes that many diversified investors have lost huge sums of money over the past couple of years and advises investors to stick with what they know and forget about competing with Warren Buffet.

Jim Rogers: How He's Investing After the Crisis

From Business Week....Jim Rogers

As the global investor and adventurer offers lessons to his daughters in a new book, he still favors commodities and scorns diversification.

Jim Rogers was Right

March 9, 2009 Bloomberg reported that Jim Rogers said that in order to keep its borrowing costs down, the U.S. Fed will likely start buying Treasuries... driving prices up and yields down. On March 18, 2009 the US Fed announced its would just do that. Jim Rogers says that this action "setting things up for a gigantic fall down the line."“Governments are printing money everywhere, borrowing stupendous amounts. Throughout history that has led to problems in the bond markets, and it will this time too.