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Old 24th October 2007, 04:15 AM
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Bloomberg: Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

By Marcel van de Hoef and Danielle Rossingh
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Oct. 24 (Bloomberg) -- Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency.

``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 late yesterday at an investors' meeting organized by ABN Amro Markets in Amsterdam, said he expects the Chinese currency to quadruple in the next decade and that he is holding on to commodities such as 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 on Sept. 18, the first cut in four years, the dollar has fallen 2.8 percent against the euro and touched a record low yesterday. 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.''

China

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.''

China, growing faster than any other major economy, is ``going to be the most important country in the 21st century,'' he said. China's 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.

Unwinding Carry Trades

In the carry trade, investors borrow in countries with low interest rates, such as Japan, and invest the proceeds where rates are higher. Japan's benchmark overnight lending rate is 0.5 percent, compared with 6.5 percent in Australia and 8.25 percent in New Zealand.

The carry trades in yen and francs will ``unwind someday,'' which will send the currencies ``straight up,'' Rogers said. ``I'm buying the yen.''

The bull markets in bonds and stocks are ``over,'' he said. ``Bonds will be a terrible place to be for many years and will in fact be going down for many years.''

Rogers said he remains bullish on commodities because ``that's where the big fortunes are going to be made in the world in the next five, or 10 or 15 years. The current bull market is going to last until sometime between 2014 and 2022.''

Commodity prices have surged as demand for raw materials, especially from China, rose faster than producers were able to increase output. Agricultural prices have led recent gains, including a record high for wheat last month and a three-year high in soybeans.

``The number of hectares devoted to wheat farming has been declining for 30 years, the inventory levels of food are at the lowest level since 1972,'' Rogers said. ``Suppose we start having droughts again. God knows how high the price of agriculture is going to go, so that's where I'm putting more of my money now than in other things.''

He added, ``I think I'm going to make more money in agriculture than I make in precious metals.''

Platinum, gold, silver and palladium will ``be much, much higher during the course of the bull market,'' he said.

To contact the reporters on this story: Marcel van de Hoef in Amsterdam at mvandehoef@bloomberg.net ; Danielle Rossingh in London at drossingh@bloomberg.net .
Last Updated: October 23, 2007 20:23 EDT
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Old 24th October 2007, 06:01 AM
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Re: Bloomberg: Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

Yes, smart move. The CNY will definitely travel upwards a long way from where it is currently pegged.
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Old 24th October 2007, 06:04 AM
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Re: Bloomberg: Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

Sounds like this guy has been listening to The Duck's rantings. :p

Actually these two bastards arbitraged the whole UK economy.

This would explain why the dollar is firm. What they actually is do is buy a little spot to stabilise it whilst they sell a shed load long by buying Puts in the futures market. When they are ready the stuff that bought on the spot is junked to start a run on the currency and then the profits on their Puts goes through the roof. The made Billions in days on the UK currency. They will make hundreds of Billions on the dollar. They will set out to destroy its reserve status, and they will succeed.
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Last edited by Rubber Duck; 24th October 2007 at 06:16 AM..
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Old 24th October 2007, 06:30 AM
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Re: Bloomberg: Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

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Originally Posted by Rubber Duck
Actually these two bastards arbitraged the whole UK economy.

u mean soros?
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Old 24th October 2007, 07:30 AM
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Re: Bloomberg: Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

Yes, and it looks like they are trying to Spook the herd again. I guess they have already taken up their positions. Why else would they be talking to the press?
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Old 24th October 2007, 07:50 AM
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Re: Bloomberg: Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

Quote:
Originally Posted by Rubber Duck
Yes, and it looks like they are trying to Spook the herd again. I guess they have already taken up their positions. Why else would they be talking to the press?

``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.

If you believe in this, then it's the central bank that is the real cheerleader.

I'm not so sure myself.
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Old 24th October 2007, 07:53 AM
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Re: Bloomberg: Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

Quote:
Originally Posted by touchring
``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.

If you believe in this, then it's the central bank that is the real cheerleader.

I'm not so sure myself.
Not really policy but all the decision they are making trying to prop everything else up will have this inevitable effect. Reducing returns to lenders when risk is perceived as very high can only lead to market flight. I think the speculator until now have been stabilising the dollar whilst they bait the trap. You wait 'til they pull the rug.
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Old 24th October 2007, 08:21 AM
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Re: Bloomberg: Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

Quote:
Originally Posted by Rubber Duck
Not really policy but all the decision they are making trying to prop everything else up will have this inevitable effect. Reducing returns to lenders when risk is perceived as very high can only lead to market flight. I think the speculator until now have been stabilising the dollar whilst they bait the trap. You wait 'til they pull the rug.

Wild currency fluctuations can be very destructive to derivative positions.

There was this Singapore company that betted on the dollar and lost $300m when the Singapore dollar appreciated over the US dollar by 4% in 2 days.

And it goes without saying that i lost money on my paypal as well. :o

Last edited by touchring; 24th October 2007 at 08:32 AM..
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Old 24th October 2007, 08:35 AM
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Re: Bloomberg: Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

Sure that is why the manipulation is so important. You have to rig the game before you start.

They identify situations where Governments through Central Banks are trying to maintain unsustainable positions that the market will correct eventually anyway. All they do is bet on that movement and then try to exaggerate and precipitate it.
A situation where the World's Reserve Currency is past its sell by date is a God given opportunity.

Whilst they are taking their highly leveraged currency gambits they will try to move it the wrong way so they get the best odds on their bets. When they are in, they then push it hard the way it would have gone anyway by selling on the spot market and talking the currency down in the Media, just as in the article below. The market then swings fast going even past the point of equilibrium and they cash out fast.

This is not speculation it is an Armed Ambush!

Quote:
Originally Posted by touchring
Wild currency fluctuations can be very destructive to derivative positions.

There was this Singapore company that betted on the dollar and lost $300m when the Singapore dollar appreciated over the US dollar by 4% in 2 days.
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Old 24th October 2007, 08:54 AM
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Re: Bloomberg: Jim Rogers Shifts Assets Out of Dollar to Buy Chinese Currency

Quote:
Originally Posted by Rubber Duck
Armed Ambush!
Oh fuck!
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