Rogers Says Dollar to Be ‘Devalued,’ Buys Commodities (Update1)

Rogers Says Dollar to Be ‘Devalued,’ Buys Commodities (Update1)
By Ron Harui and Mike Schneider

Nov. 25 (Bloomberg) -- The U.S. dollar will be “devalued” as policy makers seek to weaken it, undermining the greenback’s role as an international reserve currency, said Jim Rogers, chairman of Rogers Holdings in Singapore.

“They think that if you drive down the value of your money, it makes you more competitive, now that has never worked in history in the long term,” said Rogers. The ICE’s Dollar Index has gained 19 percent since Rogers said in an interview on April 27 he expected a dollar rally “about now.”

The U.S. dollar gained since June 30 against all the 16 most-traded currencies except for the yen as investors fled for the perceived safety of Treasuries after the global financial crisis struck, tipping the world into recession. U.S. politicians are seeking to reverse those gains to revive growth, Rogers said.

The dollar is “going to lose its status as the world’s reserve currency,” Rogers said yesterday in an interview with Bloomberg Television. “It will be devalued and it will go down a lot. These guys in Washington, they want to debase the currency.”

Rogers said that he is buying the Japanese yen. All of the 16 most-active currencies have weakened against the yen this year, with South Korea’s won falling 46 percent as the worst performer.

The ICE’s Dollar Index, which tracks the greenback against the currencies of six major trading partners, fell to 86.053 as of 2:50 p.m. in Tokyo from 86.081 late in New York yesterday. It reached 88.463 on Nov. 21, the highest level since April 2006.

Plan to Exit Dollars
The U.S. currency’s rally has “already lasted several months” and “will probably go into next year,” Rogers said. “What I plan to do sometime during this rally is to get out of the rest of my U.S. dollars.”

“If I were doing it today and what I have done today is buy the yen,” Rogers said. “But, it is also an artificial move that’s going on. It’s a difficult problem to find out what is a sound currency.”
Democratic lawmakers including Senator Charles Schumer of New York said this weekend they plan to design a package as large as $700 billion and deliver it to President-elect Barack Obama on his first day in office. Obama has called for a large economic- stimulus package, saying the U.S. faces the loss of “millions of jobs” unless immediate steps are taken to stimulate growth and rescue the nation’s automakers.

Buying Commodities
Rogers also is buying commodities, saying their “fundamentals have not been impaired and, in fact, are improved.” He correctly forecast in April 2006 that the oil price would reach $100 a barrel and gold $1,000 an ounce.

“In mid-October, I started buying commodities, I started buying China and I started buying Taiwan,” he said. “I bought them all, but I’ve been focusing more on agriculture. I mean sugar is 80 percent below its all-time high. It’s astonishing how low some of these prices are.”

The Rogers International Commodity Index Total Return has plummeted 52 percent from a record in July, including an 11 percent slide this month. The index has risen 124 percent over the past seven years.

Sugar surged the most in two weeks yesterday amid speculation that higher crude-oil prices will boost demand for alternative fuels, including ethanol made from cane.

Raw-sugar futures for March delivery rose 0.44 cent, or 3.9 percent, to 11.72 cents a pound on ICE Futures U.S. in New York yesterday. The gain was the biggest for a most-active contract since Nov. 4. Sugar has declined in each of the past three weeks.

To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.netMike Schneider in New York at mschneider12@bloomberg.net
Last Updated: November 25, 2008 01:12 EST

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aDkWLPPOXdxs

Jim Rogers Sees Dollar `Devalued,' Likes Commodities: Video

Nov. 25 (Bloomberg) -- Jim Rogers, chairman of Rogers Holdings, talks with Bloomberg's Mike Schneider about the future of the U.S. dollar as an international reserve currency and the outlook for the commodities market.

Rogers, speaking from New York yesterday, also talked about the U.S. government's response to the financial crisis, the outlook for the nation's economy, and his investment strategy. ("Night Talk" airs weeknights on Bloomberg TV. Source: Bloomberg)
00:00 U.S. economy, government bailouts: Citi, GM
09:04 Capital tax, protectionism; Tim Geithner; Fed
15:25 U.S. debt level; crisis impact on China
20:46 Commodities: sugar, cotton; farmer shortages
26:20 Origin of financial crisis; short-selling ban
34:47 Dollar to be "devalued"; commodities a "buy"
39:39 Roger's move to Singapore; future of U.S.
Running time 41:09
Last Updated: November 25, 2008 01:05 EST

mms://media2.bloomberg.com/cache/vJzshG4o708g.asf

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26/11/2008
tjhinkh:
America may default on their loan in 1-2years.
South Korea cannot sell US gov bonds as American army is sitting on the north korea border.
Forced liquidation 1929 1974 1873 we have 8-9 period like this in the last 150 years.
Parts of Japan have some empty fields coz there are no farmers to work on them.
Japanese dislike foreigners and especially Chinese Foreigenrs. But they asked the Chinese to farm their fields as there are no farmers.
Head of Fannie Mae is now Obama trusted financial advisor, instead of going to jail.Obama got more money from Fannie Mae.