Rogers Sees Nasty Economy Ahead; Sells Dollar, Pound

I wrote this piece for TradersQuest, the business I’ve been working on for the last year and a half. I thought my readers might find it interesting:

Perhaps you don’t believe all the economic doomsayers. Perhaps it doesn’t matter because you play the markets on a short time frame.

But when one of the more successful traders of all time discusses trading and the economy, it’s worth a listen.

For example, Jim Rogers, chairman of New York-based Rogers Holdings,  plans to unload his U.S. and U.K. currency by the end of the year because he believes the two countries are “lying” about inflation, reports Bloomberg.

“I hope by the end of this year, all of my assets will be out of the U.S. dollar,” Rogers said. “The dollar is a currency that’s terribly flawed and it’s going to be under duress for many years to come.”

In fact, Rogers believes the U.S. economy is about to tank:

“It’s going to be one of the worst recessions we’ve had in a while because we had so many excesses going into it. It’s going to be bad for all of us as currencies come under more and more stress and we have more inflation in the world.”

But perhaps more interesting is Rogers’ take on agricultural commodities, which he believes will continue to skyrocket because acreage for grains has been dropping for the last three decades while sugar and corn are being used increasingly for ethanol.

“If you’re worried about a recession, you might think about buying agricultural commodities,” Rogers told Bloomberg. “I suspect agriculture is going to do well no matter what happens to the world economy.”

Rogers wouldn’t predict which commodities would rise most; after all, he has his agricultural index to sell. But he did offer some hints:

• Coffee – No surprise here as industrializing Asia increasingly can afford to join in our addiction.
  
• Sugar – No surprise here as more and more is being used to make ethanol.  
• Cotton – It seems petroleum prices have finally risen enough to be highly competitive when it comes to making fibers for clothes and other products.

In the meantime, Rogers is sour on most equities and is selling financial institutions short. He’s expecting more trouble to come. The full, video interview is fascinating, which you can watch by clicking on the link to the right of the text article. It’s called: “Jim Rogers Favors Agricultural Commodities, Sells Dollars.”