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Thread: Jim Rogers on the US Dollar and US economy

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    Default Jim Rogers on the US Dollar and US economy

    (snip)"Outspoken investor Jim Rogers has warned for many years, like Peter Schiff and Marc Faber, that the United States economy is in total decline and that Asia is the land to put your money.

    Co-founder of the Quantum Fund and creator of Rogers International Commodities Index, Jim Rogers, told attendees at the China International Financial Services Conference (CIFSC) held in Guangzhou last week that he will sell all United States dollars, according to People’s Daily Online. For years now, Rogers has been telling media outlets and investors that he wants to get completely out of the US dollar and put his money in other sound currencies.

    Rogers went on to say that the last 50 years the US government has taken a dive into astronomical debt and the each administrations continues to make the same mistakes. Rogers, who is a student of the Austrian School of Economics, has been a bull on China and commodities around the world.

    In a message he has said for a long time regarding America’s economy and its currency, “[The] US dollar economy has encountered major problems, the dollar index fell to a new low, and it will continue to fall. If the dollar rebounds in the future, I will sell all the U.S. dollars. My whole family has moved to live in Asia. The story of the United States is over. A new story belongs to China.”

    For several years, Rogers has urged people to learn to speak Mandarin, “It was smart to invest in Britain in 1807. It was smart to invest in the United States of America in 1907. It is now smart to invest in Asia in 2007.”

    Right now, Rogers’s youngest daughter is learning mandarin and her caregiver only speaks mandarin to her.

    At the conference, Rogers did not only talk about the United States but also Europe by stating they go into a vicious cycle of issue bonds – inflation, issue bonds – inflation and so on. “I will not by United States treasury bonds,” Rogers proclaimed, “because the government is constantly printing more banknotes.”

    In a jest manner, Rogers believes the US will never lack US dollars. Nevertheless, he will buy oil and minerals and, of course, the stocks of those companies that “engage in a real economy.”

    Author of “Hot Commodities” and economic commentator thinks the economic downturn in the US is still growing and continuing. At the present time, according to Rogers, there are more people to buy treasury bonds, interest rates will remain low but, eventually, in the long run, will dramatically rise. "(snip)

    from

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    Default Re: Jim Rogers on the US Dollar and US economy

    Quote Originally Posted by Melonie View Post
    (snip)"Outspoken investor Jim Rogers has warned for many years, like Peter Schiff and Marc Faber, that the United States economy is in total decline and that Asia is the land to put your money.

    Co-founder of the Quantum Fund and creator of Rogers International Commodities Index, Jim Rogers, told attendees at the China International Financial Services Conference (CIFSC) held in Guangzhou last week that he will sell all United States dollars, according to People’s Daily Online. For years now, Rogers has been telling media outlets and investors that he wants to get completely out of the US dollar and put his money in other sound currencies.

    Rogers went on to say that the last 50 years the US government has taken a dive into astronomical debt and the each administrations continues to make the same mistakes. Rogers, who is a student of the Austrian School of Economics, has been a bull on China and commodities around the world.

    In a message he has said for a long time regarding America’s economy and its currency, “[The] US dollar economy has encountered major problems, the dollar index fell to a new low, and it will continue to fall. If the dollar rebounds in the future, I will sell all the U.S. dollars. My whole family has moved to live in Asia. The story of the United States is over. A new story belongs to China.”

    For several years, Rogers has urged people to learn to speak Mandarin, “It was smart to invest in Britain in 1807. It was smart to invest in the United States of America in 1907. It is now smart to invest in Asia in 2007.”

    Right now, Rogers’s youngest daughter is learning mandarin and her caregiver only speaks mandarin to her.

    At the conference, Rogers did not only talk about the United States but also Europe by stating they go into a vicious cycle of issue bonds – inflation, issue bonds – inflation and so on. “I will not by United States treasury bonds,” Rogers proclaimed, “because the government is constantly printing more banknotes.”

    In a jest manner, Rogers believes the US will never lack US dollars. Nevertheless, he will buy oil and minerals and, of course, the stocks of those companies that “engage in a real economy.”

    Author of “Hot Commodities” and economic commentator thinks the economic downturn in the US is still growing and continuing. At the present time, according to Rogers, there are more people to buy treasury bonds, interest rates will remain low but, eventually, in the long run, will dramatically rise. "(snip)

    from http://www.digitaljournal.com/article/279557
    Well I guess somebody had to state the obvious. It's actually worse than that.
    It's been reported that Bernanke does NOT believe that controlling inflation and strengthening the dollar are important. He SAYS that they are but has done nothing, zero, zip , nada to support the value of the dollar. Not surprising when you remember that Ben is a "Depression Scholar" and prides himself on not repeating the mistakes the Fed made in the 1930's. Instead he is repeating the Arthur Burns disaster of the 1970's. Again not surprising when you consider that he really believes that strong economic growth causes inflation. REALLY ? Then how did we have such strong growth under LBJ without inflation after JFK's tax cuts took effect ? What magic wand was used when we had strong growth under Reagan and low inflation ? And the same under Clinton ? All with a STRONG dollar .

    In contrast, we had growth under G.W. Bush but the dollar gradually weakened. Oil, gold and other commodities went up in price and we had inflation. The difference was FED policy under Greenspan and then Bernanke. They gave us too much money and interest rates that were too low resulting in a weak dollar. If you liked the results so far, you'll LOVE what will happen in late 2010 and beyond.
    Last edited by Eric Stoner; 09-23-2009 at 11:41 AM.

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    Default Re: Jim Rogers on the US Dollar and US economy

    This just in- The Fed today did NOT raise interest rates. In a perverse way, they are doing the dirty work for Melonie, me and thousands of other who are heavily invested in commodities and overseas. As the dollar gets weaker, the value of our investments continues to go up. As more money flees the U.S. ( look for that to accelerate over the next two years ) the dollar gets weaker. The Fed and the Treasury have created a self feeding vicious cycle of cheap money that is worth less and less incentivizing behavior that compounds the weakness of the currency.

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    Default Re: Jim Rogers on the US Dollar and US economy

    Quote Originally Posted by Melonie View Post
    ...For several years, Rogers has urged people to learn to speak Mandarin, “It was smart to invest in Britain in 1807. It was smart to invest in the United States of America in 1907. It is now smart to invest in Asia in 2007.” ...

    from http://www.digitaljournal.com/article/279557
    It was also smart to invest in Britain in 1977 and 1997. Given the FTSE and DOW today it seems like a good time to invest in the US and UK in 2009. But then buy low and sell high seems like such an antiquated idea when faced with the obvious brilliance of the Austrian school of perma-doom and gloom.

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    Default Re: Jim Rogers on the US Dollar and US economy

    Quote Originally Posted by Eric Stoner View Post
    This just in- The Fed today did NOT raise interest rates. In a perverse way, they are doing the dirty work for Melonie, me and thousands of other who are heavily invested in commodities and overseas. As the dollar gets weaker, the value of our investments continues to go up. As more money flees the U.S. ( look for that to accelerate over the next two years ) the dollar gets weaker. The Fed and the Treasury have created a self feeding vicious cycle of cheap money that is worth less and less incentivizing behavior that compounds the weakness of the currency.
    You know you can make money on the currency going down...and commodities going down for that matter?

    And...learning Mandarin, and moving to China? Seriously, where do you guys find this stuff! Hilarious.

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    Default Re: Jim Rogers on the US Dollar and US economy

    Quote Originally Posted by hockeybobby View Post
    You know you can make money on the currency going down...and commodities going down for that matter?

    And...learning Mandarin, and moving to China? Seriously, where do you guys find this stuff! Hilarious.
    Yeah you can short currency and commodities but it's also easier to lose your shirt. But the question for now is which is more likely to occur ? Will commodities go up or down in price ?

    As for learning Mandarin; what's wrong with speaking the language of the world's third largest economy ? Which is poised to become the second largest ?

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    Default Re: Jim Rogers on the US Dollar and US economy

    Wait, is this Jim Rogers the same scummy coal baron Jim Rogers that's CEO of Duke Energy, or another one?

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    Default Re: Jim Rogers on the US Dollar and US economy

    more of the same ... this time from CNBC ...

    (snip)"The US is too dependent on Japan and China buying up the country's debt and could face severe economic problems if that stops, Tiger Management founder and chairman Julian Robertson told CNBC.

    "It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."

    Robertson said inflation is a big risk if foreign countries were to stop buying bonds.

    “If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.” (snip)

    (snip)"Robertson said while he doesn’t think the Chinese will stop buying US bonds, the Japanese may eventually be forced to sell some of their long-term bonds.

    “That's much worse than not buying,” he said. “The other thing is, they're buying almost exclusively short-term debt. And that's what we are offering, because we can't sell the long-term debt. And you know, the history has been that people who borrow short term really get burned.”(snip)

    from


    Some commentary is probably in order regarding Mr. Robertson's point about the US gov't primarily issuing new short term Treasury bills / bonds rather than long term. Fundamentally speaking, the US gov't is financing much of its increased deficit spending via an Adjustable Rate Mortgage rather than a Fixed Rate Mortgage ! This is obviously being done because the interest rate the US gov't must pay to borrow money for 6 months or 5 years is far lower than the interest rate the US gov't would have to pay if it tried to borrow an equal amount of money for 20 or 30 years. And like an ARM mortgage holder, the US gov't must now 'roll over' its shorter term bills and bonds at an unknown future interest rate since it also lacks the ability to pay off the shorter term bills and bonds in full. If the Chinese and Japanese and other global investors become reluctant to purchase 'rolled over' US gov't short term bills and bonds in the near future, it leads to a situation where the US gov't would have to pay much higher interest rates ... or in the absence of foreign buyers the US gov't would have to 'print up' sufficient dollars to pay off short term bills and bonds. Both of these alternatives would be highly inflationary, and highly negative for the US dollar's international purchasing power / exchange rate.

    ~
    Last edited by Melonie; 09-25-2009 at 05:29 AM.

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    Default Re: Jim Rogers on the US Dollar and US economy

    Quote Originally Posted by Melonie View Post
    more of the same ... this time from CNBC ...

    (snip)"The US is too dependent on Japan and China buying up the country's debt and could face severe economic problems if that stops, Tiger Management founder and chairman Julian Robertson told CNBC.

    "It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."

    Robertson said inflation is a big risk if foreign countries were to stop buying bonds.

    “If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.” (snip)

    (snip)"Robertson said while he doesn’t think the Chinese will stop buying US bonds, the Japanese may eventually be forced to sell some of their long-term bonds.

    “That's much worse than not buying,” he said. “The other thing is, they're buying almost exclusively short-term debt. And that's what we are offering, because we can't sell the long-term debt. And you know, the history has been that people who borrow short term really get burned.”(snip)

    from http://www.cnbc.com/id/33004753


    Some commentary is probably in order regarding Mr. Robertson's point about the US gov't primarily issuing new short term Treasury bills / bonds rather than long term. Fundamentally speaking, the US gov't is financing much of its increased deficit spending via an Adjustable Rate Mortgage rather than a Fixed Rate Mortgage ! This is obviously being done because the interest rate the US gov't must pay to borrow money for 6 months or 5 years is far lower than the interest rate the US gov't would have to pay if it tried to borrow an equal amount of money for 20 or 30 years. And like an ARM mortgage holder, the US gov't must now 'roll over' its shorter term bills and bonds at an unknown future interest rate since it also lacks the ability to pay off the shorter term bills and bonds in full. If the Chinese and Japanese and other global investors become reluctant to purchase 'rolled over' US gov't short term bills and bonds in the near future, it leads to a situation where the US gov't would have to pay much higher interest rates ... or in the absence of foreign buyers the US gov't would have to 'print up' sufficient dollars to pay off short term bills and bonds. Both of these alternatives would be highly inflationary, and highly negative for the US dollar's international purchasing power / exchange rate.

    ~
    Melonie ! You of all people ! Wtf do you think the G-damn Fed has been doing for the past year ?
    The printing presses have been burning out from overuse for over a year. Have you looked at M2 lately ? At the Fed's balance sheet ?

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    Default Re: Jim Rogers on the US Dollar and US economy

    ^^^ obviously the overall rate of US gov't money printing is unprecedented. But you do have to give the Fed and mainstream media credit for 'disguising' it ! While some of us understand that there is a world of difference between the Fed's balance sheet consisting of US Treasury bills versus 'toilet paper' securitized subprime mortgage / auto / credit card debt collateral taken in on TARP loans of newly printed money to troubled US banks, many Americans apparently do not.

    Focusing back on the topic at hand, you forgot to mention that the Fed has also been buying 50% of all recently issued longer term US treasury bonds as of late (using 300 billion of freshly printed dollars). However, the 300 billion in new money that was approved for this purpose (Quantitative Easing) has only 10 billion left ... meaning that the Fed will have to stop buying treasuries as early as next week without further approval to print up even more new money. If this happens, all sorts of surprises could occur - as described in this follow-up piece to Robinson ...

    (snip)"In his interview yesterday Julian Robertson expressed substantial concerns about the ongoing US debt funding threat, using words such as "Armageddon" to describe what will happen when and if China and Japan stop buying US debt. More disturbingly, as was pointed out on Zero Hedge first, and was subsequently picked up by the WSJ, the Fed has accounted for half of all Treasury purchases in Q2 ($164 billion of total of $339 billion).

    Below we present data for what could be construed as a Treasury funding crisis borne out of lack of demand for longer maturities, once the QE portion of UST purchases expires. This crisis could hit as soon as October."(snip)

    (snip)"Summary: foreign purchasers are congregating exclusively around the front end of the Treasury curve, meaning that the primary net purchaser of dated bonds has been the Federal Reserve. As everyone knows by now, the Fed only has $10 billion left out of the $300 billion total allotted for Treasury QE. That should expire next week. The question then becomes will we see another major steepening leg in the UST curve as yields on long-dated paper finally catch up to the real supply-demand curve absent the Fed's manipulation of the equilibrium point. Or will we see an outright funding crisis as foreigners pull out entirely of all treasury purchases, not just Long-term USTs.

    The time of unravelling may be upon us sooner than most think."(snip)

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    Default Re: Jim Rogers on the US Dollar and US economy

    ^^^^Funny you should mention that. Please see my latest thread on the U.S. having achieved "Third World" status.

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