Bloomberg News
Oct. 25, 2007.
"I'm in the process of - I hope in the next few months - getting all of my assets out of U.S. dollars," said Rogers, 65, who correctly predicted the commodities rally in 1999. "I'm that pessimistic about what's happening in the U.S."
Rogers, delivering a presentation Tuesday at an investors' meeting organized by ABN Amro Markets in Amsterdam, said he expects the yuan to quadruple in the next decade and that he is holding on to commodities like platinum, gold, silver and palladium.
The dollar has dropped against all the 16 most actively traded currencies except the Mexican peso this year as slowing growth and the first interest-rate reduction since 2003 last month dimmed the allure of dollar-denominated assets.
Since the Fed lowered U.S. interest rates Sept. 18, the first cut in four years, the dollar has fallen 2.8 percent against the euro and touched a record low Tuesday. Gold rose to a 27-year high and platinum jumped to a record.
"It's the official policy of the central bank and the U.S. to debase the currency," said Rogers, a former partner of George Soros.
"The U.S. dollar is and has been the world's reserve currency, the world's medium of exchange," he said. "That's in the process of changing. The pound sterling, which used to be the world's reserve currency, lost 80 percent of its value, top to bottom, as it went through the whole period of losing its status as the world's reserve currency."
The Chinese currency, known as the renminbi, or yuan, is "the best currency to buy right now," Rogers said. "I don't see how one can really lose on the renminbi in the next decade or so. It's gotta go. It's gotta triple. It's gotta quadruple."
The yuan strengthened past 7.5 to the dollar today for the first time since the central bank ended a fixed exchange rate in July 2005. The currency has gained 10.5 percent since the dollar link was abandoned.
China, growing faster than any other major economy, is "going to be the most important country in the 21st century," he said. Gross domestic product expanded 11.9 percent in the second quarter, and analysts surveyed by Bloomberg estimate the economy grew by 11.5 percent in the three months to Sept. 30.
Rogers also is buying Swiss francs and Japanese yen, which he said have been "pounded down" because of the so-called carry trades.
Source:
http://www.iht.com/articles/2007/10/24/business/sxasia.php
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