Legendary investor Jim Rogers believes that it’s in the best interest of several Gulf states to form a joint currency, independent of the U.S. dollar, as soon as possible. From the Business Intelligence Middle East website this morning: The Gulf countries’ currency peg to the dollar is a ‘terrible mistake’ and will cause problems for the region as the US currency is expected to decline, Jim Rogers said. The six Gulf Cooperation Council states should form a joint currency as soon as possible, the chairman of Singapore-based Rogers Holdings said at a conference in Dubai Monday. The new currency shouldn’t be linked to any other as the region has enough foreign reserves and oil to back it up. “You’ve got good foreign exchange reserves and a lot of oil” to back a common currency, Rogers said during a banking conference in Dubai. Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman agreed in 2001 to form a European Union-style monetary union by 2010 to boost regional trade. Oman later pulled out. Kuwait is the only Gulf Arab state to have dropped its currency peg to the dollar, giving it some control over monetary policy. Gulf Arab leaders in December approved an agreement to create a central bank and single currency for the region to boost trade and strengthen monetary policy. UAE 20 dirham Source: “Jim Rogers advises Gulf states to get rid of dollar peg” FREE VIDEO: Dollar Vs. Yen Sphere: Related Content Legendary investor Jim Rogers took time out of his busy schedule to speak to Bloomberg from Singapore, where he spoke about his outlook for U.S. equities and Eastern Europe. Yesterday, Bloomberg’s Lori Rothman and Shiyin Chen reported: Jim Rogers, chairman of Rogers Holdings, said he renewed bets that U.S. stocks will drop as the government’s economic revival plan is a “disaster.” Rogers is shorting U.S. equities including International Business Machines Corp., General Electric Co. and JPMorgan Chase & Co. after closing earlier bets during October’s meltdown, he said in Singapore… “I covered most of my shorts in the U.S. stock market back in October specifically, and waited for a rally and there’s been a bit of a rally, so now I’ve started shorting again,” Rogers said. The bank-rescue plan is “a big, horrible disaster.” Rothman and Chen noted that the CEO of Rogers Holdings is taking a contrarian approach in shorting U.S. shares. They wrote: While Rogers has increased his bets against the U.S. market, other short sellers are losing their conviction as Obama works with Congress on a spending and tax-cut plan of about $800 billion to revive the economy. The number of shares borrowed and sold short on the New York Stock Exchange fell 28 percent last month from the peak in July. NEW VIDEO: Do you think these 5 stocks are ready to move? The Singapore-based investor also pointed out that Eastern Europe isn’t a particularly attractive investment opportunity at this time. Bloomberg’s Chen and Yon Pulkrabek reported yesterday: Investor Jim Rogers is shunning eastern Europe on concern the region’s economies will deteriorate further… “Eastern Europe is a mess,” said Rogers, chairman of Rogers Holdings, in a Bloomberg interview in Singapore. “Probably, the worst is yet to come there, though that applies everywhere.” The Hungarian forint and Polish zloty weakened more than any of the 25 emerging market currencies this year versus the euro as the worst global financial crisis since the Great Depression cuts demand for their exports to western Europe and dries up credit and investment. The Czech koruna and Romanian Leu are the fourth- and fifth-worst performers in that group, trailing Russia’s ruble. “Expectations had been aroused dramatically since the fall of communism,” Rogers said. “There are going to be lots more dashed expectations. There were huge loans taken out in central Europe with crazy expectations.” Sources: “Rogers Renews Bets U.S. Stocks Will Slump on Rescue (Update1)” “Rogers Says ‘Eastern Europe Is a Mess’; Zloty Falls (Update2)” Sphere: Related Content The other week, it was Britain and her pound sterling. Now, it’s Russia and the ruble which legendary investor Jim Rogers is concerned about. Bloomberg’s Ellen Pinchuk and Anastasia Ustinova wrote yesterday: Jim Rogers, chairman of Rogers Holdings, said he won’t invest in Russia in part because the country is “unstable” and may break apart. He’s considering betting against the ruble. “There’s a good chance Russia will continue to disintegrate into more than one country,” Rogers said in a Bloomberg Television interview in Moscow today. “Whenever empires have disintegrated throughout history, the reverberations have gone on for a long, long time.” 1,000 Ruble Banknote The CEO of Rogers Holdings has been a bear on Russia for a while. From the Bloomberg piece: “I am not optimistic about the continuous stability of Russia,”the Singapore-based investor said. The slide in oil prices has forced the central bank to drain more than a third of its foreign currency reserves, the world’s largest after China and Japan, slowing the devaluation of the ruble. The currency has fallen 35 percent against the dollar since Russia’s five-day war with Georgia in August. Investors have since pulled about $290 billion out of the country, according to BNP Paribas SA. Rogers criticized the central bank for announcing last week that it would defend the ruble if it fell to 41 versus a basket of 55 percent dollars and 45 percent euros, which was breached today. “Knowing that the central bank has drawn a line in the sand, it makes me sit up and take a little more notice about the ruble,” Rogers said. “So I will start thinking more about” betting against the currency. Source: “Rogers Says Russia May Break Apart, Considers Bet Against Ruble” Sphere: Related Content George Soros, “The Man who Broke the Bank of England,” is warning that the European currency is on the endangered list. From Reuters’ Kristina Cooke last Thursday: The euro may not survive unless the European Union pushes for an international agreement on toxic assets, billionaire investor George Soros told Austria’s Der Standard newspaper. “One would need a type of agreement on lost capital, so that the burden is shared, and in which every country is part of, otherwise more countries will suffer,” said Soros in an interview with the paper, which was published on its Website. “The EU should do this. If they don’t do this then the euro may not survive the crisis.” The Innovative Forex Platform - Source: “Soros: euro may not last without global plan-paper” Sphere: Related Content Looks like billionaire hedge fund investor George Soros had been playing the pound sterling game. From Bloomberg’s Simon Kennedy today: Billionaire investor George Soros, who made $1 billion selling the pound in 1992, said he is no longer betting against the U.K. currency after it reached $1.40. “I did actually foresee the fall in sterling and that was one of the positions we carried,” he told reporters at the World Economic Forum in Davos, Switzerland. Below $1.40 “it seemed to me the risk-reward was no longer clear.” Soros said today that he has made money from the financial crisis. The British government’s efforts to protect the banking system from the turmoil last week led to a drop in the pound to the lowest level against the dollar since 1985. The currency traded at $1.4313 as of 12:56 p.m. in London today. “We did have a short position in sterling, but it doesn’t mean I’m bearish on sterling today or bullish,” Soros said. “It will continue to fluctuate.” Photo by Steve Woods, stock.xchng Kennedy noted that Soros’ views on the British currency conflict with those of his old partner, Jim Rogers. From the Bloomberg piece: Soros’s comments contrast with those of Jim Rogers, who co-founded the Quantum Fund with him and is now chairman of Singapore-based Rogers Holdings. Rogers said Jan. 20 that the pound was “finished” because of turmoil in the banking system and a decline in North Sea oil output. Source: “Soros Stopped Betting Against Pound After $1.40 Level (Update1)” Sphere: Related Content Legendary investor Jim Rogers thinks that the pound sterling may one day fall so far that it might reach parity with the U.S. currency. From Reuters’ Neil Chatterjee yesterday: Jim Rogers, one of the world’s best known investors, said on Monday pound sterling could fall to reach parity with the dollar in coming years given Britain’s increasing debt and lack of economic growth drivers. Rogers said last week the pound was “finished” and people should avoid investing in Britain, leading to a retort from the country’s Prime Minister Gordon Brown that economic policy would not influenced by speculators… “I suspect it’s going to make new lows — it may take a decade,”Rogers told Reuters, adding the pound had neared parity with the dollar before. “Why not again?” he said. “There’s two big holes developing in the UK’s balance of payments — North Sea oil drying up and the financial industry. I don’t see anything replacing those two big holes.” Source: “Jim Rogers says pound could hit parity with dollar” Sphere: Related Content No stranger to controversy, legendary investor Jim Rogers created quite a stir this week in the world of finance. Speaking at the two-day Asian Financial Forum in Hong Kong, the former partner of George Soros in the Quantum Fund told the 1,000 or so bankers and investors: • “The money has left America. America is no longer where the money is. The money is in Asia,” Rogers told the audience. The CEO of Rogers Holdings also talked investments with those attending the forum. He said: • “The only way you make money historically in a period like this is you find an area where the fundamentals are not impaired. The only area I know like this is in commodities.” Rogers pointed out that the supply of commodities has generally been declining while demand continues to rise. On Tuesday, Jim Rogers also spoke to Bloomberg’s Paul Gordon about the outlook for the U.K. economy and the pound. He told Gordon: For the last 26 years, the U.K. has been selling oil, the North Sea. That’s what’s saved the U.K. in the past three decades. It’s finished. The North Sea oil is running out. Within the decade, the U.K. will be importing oil again. And then they’ve got nothing to sell… I mean, again, I hate to say it, but I would not put any money in the U.K. I’ve sold all of my sterling… As expected, the British authorities were not pleased to hear such comments. Sources: “Rogers remains bullish on China” “Crisis boosts Rogers’ resolve on China, commodities” “Jim Rogers sees Renminbi replacing US Dollar as world reserve Jim Rogers Interview Sphere: Related Content Jeremy Grantham, the chairman of privately-held global investment firm GMO who warned back in April 2007 we were seeing a worldwide bubble throughout all asset classes for the first time in history, has just released his latest quarterly letter. As usual, an insightful read. Notable excerpts from the January 2009 issue as to where investors should be placing their money included: Stocks Slowly and carefully invest your cash reserves into global equities, preferring high quality U.S. blue chips and emerging market equities. Imputed 7-year returns are moderately above normal and much above the average of the last 15 years. But be prepared for a decline to new lows this year or next, for that would be the most likely historical pattern, as markets love to overcorrect on the downside after major bubbles. 600 or below on the S&P 500 would be a more typical low than the 750 we reached for one day. Bonds In fixed income, risk finally seems to be attractively priced, in that most risk spreads seem attractively wide. Long government bond rates, though, seem much too low. They reflect the short-term fears of economic weakness and the need for low short-term rates. We would be short long government bonds in appropriate accounts. Commodities As for commodities, who knows?There were a few months where they looked like a high-confidence short, but now they are half-price or less,and are much lower confidence bets. Currencies In currencies, we know even less. It is easy to find currencies to dislike, and hard to find ones to like. There are no high-confidence bets, in our opinion. Grantham, who has advised a number of individual clients such as former U.S. Vice President Dick Cheney and former U.S. presidential candidate John Kerry, shared his latest long-term forecast as well. He wrote: For the long term, research should be directed into portfolios that would resist both inflationary problems and potential dollar weakness. These are the two serious problems that we may have to face as a consequence of flooding the global financial system with government bailouts and government debt… Under the shock of massive deleveraging caused by the equally massive write-down of perceived global wealth, we expect the growth rate of GDP for the whole developed world to continue the slowing trend of the last 12 yearsas we outlined in April 2008. Since this recent shock overlaps with slowing population growth, it will soon be widely recognized that 2% real growth would be a realistic target for the G7, even after we recover from the current negative growth period. Emerging countries are, of course, a different story. They will probably recover more quickly, and will continue to grow at double (or better) the growth rate of developed countries. (See “The Emerging Emerging Bubble,” April 2008. You can read the entire quarterly letter (in .pdf format) here. Source: “Obama and the Teflon Men, and Other Short Stories. Part 1.” Sphere: Related Content Legendary investor Marc Faber appeared on CNBC this past Monday. Here’s what Dr. Faber, speaking from Switzerland, had to say about the global financial environment, and where he was putting his own money these days. Notable excerpts from the exchange included: Well, I think that the credit markets have improved somewhat… In general I think that the markets may rally somewhat more… Everybody expects the second half of 2009 to improve. I think there’s a very good chance that the second half of 2009 will be even worse than the first half of 2009… If you talk about oversold markets, and major lows, I mean, commodities have been hit very, very hard… Exploration will come to a standstill. And not much new oil supplies will come on stream and not much new mining supplies will come on stream. So whenever the global economy recovers, and I hope it’s in our lifetime, then obviously commodities will again rise very substantially. And you can pick up now some quality names in the commodity sector that then should perform very well. FREE VIDEO: Check out the returns in these futures markets When asked by CNBC what he was doing with his own money these days, the editor of The Gloom Boom & Doom Report replied: Well, I have to tell you. I think the markets became very oversold in November, and there can be a rebound. I’m still thinking that for the next couple of months the markets will stabilize and rebound somewhat. So I have some shares. I have some shares in Asia. I have some mining stocks, exploration companies, physical gold. And as far as the currency is concerned, I think the dollar is a disastrous currency, but the others are even worse. So, I have a basket of different currencies— mostly euros and dollars. But I’m leaning more towards the view that the dollar could strengthen somewhat more. You can watch the segment, in two parts, hereand here. Source: Marc Faber Interview Sphere: Related Content Emerging markets veteran Mark Mobius doubts we’ll see any more significant devaluation in the Russian currency. From Bloomberg’s Laura Cochrane yesterday: Russia’s ruble will begin to stabilize as 18 separate devaluations in two months take the currency toward its fair value, investor Mark Mobius said. The central bank may slow its pace of depreciations, Mobius, 72, who manages more than $24 billion in emerging-market assets as executive chairman at Templeton Asset Management Ltd., said in an interview today. The ruble was trading today below the weakest level seen during Russia’s 1998 financial crisis that led the government to default on $40 billion of debt. Investors have withdrawn $245 billion from Russia since August as a 63 percent drop in oil, Russia’s war with Georgia and the disruption to gas exports exacerbated the effect of the global financial crisis, according to BNP Paribas SA data. “It will begin to stabilize,” Mobius said on the phone from Kuala Lumpur, referring to the Russian currency. “On a price-to-parity basis, the ruble was overvalued and now it’s not as overvalued as it was. I know some commentators think further devaluations can be expected,but I’m not too sure about that.” Cochrane added: The Templeton Emerging Markets Investment Trust, which Mobius runs, has 6.4 percent of its holdings in Russian stocks as of Dec. 31. The stocks are mostly oil and gas companies, Mobius said. Source: “Mobius Says Ruble to Stabilize, Devaluations May Slow (Update1)” Sphere: Related ContentArchive for the 'Currencies' Category
Jim Rogers Advises Gulf States To Form Joint Currency
Tuesday, February 17th, 2009
BI-ME Staff
Business Intelligence Middle East, February 17, 2009Jim Rogers: Bad Times Ahead For U.S. Stocks, Eastern Europe
Thursday, February 12th, 2009
Shiyin Chen, Lori Rothman
Bloomberg, February 11, 2009
Shiyin Chen, Yon Pulkrabek
Bloomberg, February 11, 2009Jim Rogers Says Russia Unstable, May Bet Against Ruble
Friday, February 6th, 2009
Ellen Pinchuk, Anastasia Ustinova
Bloomberg, February 5, 2009George Soros Says Euro May Not Survive Financial Crisis
Monday, February 2nd, 2009
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Kristina Cooke
Reuters, January 29, 2009George Soros No Longer Betting Against British Pound
Wednesday, January 28th, 2009
Simon Kennedy
Bloomberg, January 28, 2009Jim Rogers: Pound Sterling May Fall, Reach Parity With U.S. Dollar
Tuesday, January 27th, 2009
Neil Chatterjee
Reuters, January 26, 2009Financial World Shaken, Not Stirred, By Jim Rogers’ Comments
Friday, January 23rd, 2009
• Asia is going to be the financial and political center of the world in the future.
• China, like the United States in the 19th century, may experience setbacks during its rise to power.
• The U.S. dollar may be replaced by the Chinese renminbi as the world’s reserve currency as soon as 15 years from now. Rogers cited the fact that China is now the largest creditor nation in the world, while the United States is the world’s biggest debtor nation.
• Washington is purposely trying to devalue the U.S. dollar by “turning on the printing presses.”
• The U.S. government’s plan to bail out the U.S. economy by printing more money and boosting consumption could lead to even bigger problem. “The idea that you can solve a period of excessive borrowing and consumption with more borrowing and more consumption and destroying more balance sheets, to me, is ludicrous on its face.”
• Protectionism, one of the key pillars of U.S. President Barrack Obama’s presidential campaign platform, could push the U.S. economy into a long depression.
• Commodity prices have fallen recently, but as Western governments fire up the printing presses, prices will rise for everything from oil and gas to foodstuffs.
• While he likes the Japanese yen, he is bearish on the U.S. dollar, bonds, and stocks.
• He intends to unload all his dollars at some point in 2009.
• He believes the bond market rally, particularly in the United States, will end badly. He told attendees, “If you are a bond portfolio manager, I suggest you find another job.”
• He also said equities will not rise again to the levels seen prior to the financial crisis, and expects them to trade within a narrow range for years to come. In fact, he advised, “If you are an equities investor, start getting out.”
• Besides commodities and yen, Rogers said he favored Chinese stocks, particularly those having to do with agriculture, power generation, tourism, and water treatment. The Singapore-base investor is so impressed with agriculture that he told those at the forum, “If any of you have MBAs, I would rush out and see if you can exchange it for an agriculture degree.”
Duncan Mavin
Financial Post (Canada), January 19, 2009
Rita Raagas De Ramos
Asian Investor (UK), January 20, 2009
Currency”
Business Intelligence Middle East (UAE), January 20, 2009
Bloomberg, January 20, 2009Investor Letters: Jeremy Grantham
Friday, January 23rd, 2009
Jeremy Grantham
Quarterly Letter
GMO, January, 2009Where Marc Faber Is Investing His Money These Days
Wednesday, January 21st, 2009
CNBC, January 19, 2008Mark Mobius Predicts Russian Ruble To Stabilize
Wednesday, January 21st, 2009
Laura Cochrane
Bloomberg, January 20, 2009
Wednesday, 18 February 2009
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