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Globe "Overdue for a Currency Crisis"; Why Jim Rogers Is Buying Dollars

Posted Dec 10, 2009 12:25pm EST by Peter Gorenstein in Investing, Newsmakers, Recession
Related: gld, ewj, spy, dia, FXI, UUP, tlt

"It wouldn't surprise me at all to see a nice rally in the dollar,” says Jim Rogers.  The legendary investor tells Tech Ticker he has started to accumulate more greenbacks as of late.  Rogers is still negative on the long-term fundamentals for the dollar, noting "the U.S. is the largest debtor nation in the history of the world."

But "when everybody is on one side of the boat, invariably you should run over to the other side, for awhile," he tells Aaron in the accompanying video. 

At least for the time being, the U.S. remains the world's reserve currency. And, as St. Louis Fed President Jim Bullard reminded us in our recent interview, the dollar has rallied, not fallen, when things have looked especially worrisome during recent bouts of financial crisis.  Rogers says it's nothing more than short covering, not an endorsement of the dollar or U.S. policy. 

In fact, Rogers believes we're "overdue for a currency crisis" which will likely come "in the next year or two."

That may give the dollar a boost for technical reasons, but he recommends investors protect themselves by buying "good currencies" from creditor nations -- namely China, South Korea, Taiwan, Singapore and Japan -- or "hard assets."

Gold, of course, being one of those hard assets he owns.  Rogers still stands by his previous prediction that gold will be at least "a couple of thousands of dollars an ounce" in the next decade, even if the metal stalls a bit in the near term.

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