Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

[D-Mack]

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 dollar advanced against 15 of the 16 most-traded currencies since the end of June, losing out only to the yen, as a global financial crisis drove investors to the perceived safety of Treasuries. U.S. politicians want 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 a televised interview with Bloomberg News. ``It will be devalued and it will go down a lot. These guys in Washington, they want to debase the currency.''

...

http://www.bloomberg.com/apps/news?p...sDQ&refer=home

We have heard this numerous times from different sources.

But who will replace it?

Wang Jian, general secretary of China’s Macroeconomics Society, has dismissed all the talk about establishing a new global monetary order as a "daydream."

"European powers see this crisis as an opportunity too -- they want to use it to promote the euro as an alternative to the US dollar," Wang told the ‘China Business Journal.’ "But there is no way the U.S. is going to relinquish the power of the dollar as an international reserve currency to anybody,’’ Wang told the Journal.
http://www.globalresearch.ca/index.p...t=va&aid=11140

It is only the beginning. The 2009 year will be one of titanic shocks and changes to the global order of a scale perhaps not experienced in the past five centuries. This is why we should speak of the end of the American Century and its Dollar System.

How destructive that process will be to the citizens of the United States who are the prime victims of Paulson’s crony capitalists, as well as to the rest of the world depends now on the urgency and resoluteness with which heads of national Governments in Germany, the EU, China, Russia and the rest of the non-US world react. It is no time for ideological sentimentality and nostalgia of the postwar old order. That collapsed this past September along with Lehman Brothers and the Republican Presidency. Waiting for a ‘miracle’ from an Obama Presidency is no longer an option for the rest of the world.
http://www.globalresearch.ca/index.p...t=va&aid=11117

[LargoWinch]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

I posted the interview in the video section here:

http://www.itulip.com/forums/showthread.php?t=6627

[touchring]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

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 dollar advanced against 15 of the 16 most-traded currencies since the end of June, losing out only to the yen, as a global financial crisis drove investors to the perceived safety of Treasuries. U.S. politicians want 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 a televised interview with Bloomberg News. ``It will be devalued and it will go down a lot. These guys in Washington, they want to debase the currency.''

...

http://www.bloomberg.com/apps/news?p...sDQ&refer=home

We have heard this numerous times from different sources.

But who will replace it?

Nothing will replace it, we'll just return to a multicurrency world.

[due_indigence]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

Isn't a 92% decline in the Baltic Dry index flashing a near-cessation of world trade anyway? What's the utility of a reserve currency in an era of vastly reduced global trade?

[goadam1]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

Other than commodities as a way to diversify out of the dollar, I've had it suggested that I buy some foreign bonds. I understand the whole "dollar being the tallest midget." But in the name of getting some better sleep: any thoughts on this as strategy? If you were going to buy some alternative debt, what would it be.

I already own physical gold.

[ST]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

Other than commodities as a way to diversify out of the dollar, I've had it suggested that I buy some foreign bonds.

I've also suggested foreign bonds, namely Canadian bonds - you have the best fiscal G-7 country by far and the loonie is a commodity currency which will experience an upward thrust again once the dollar devalues. Yes, Canada will be forced to devalue, but relative to other currencies I would expect expect it to remain very high.

[goadam1]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

lol

Canadian bonds among Fed chairman’s holdings
By Tom Petruno
July 22, 2008 in print edition C-4
If Federal Reserve Chairman Ben S. Bernanke leads the U.S. into financial ruin, he’ll still have his Canadian Treasury bonds to fall back on.

The Fed on Monday issued Bernanke’s annual financial disclosure report, which shows that the central bank chief is well-off compared with most Americans – but a pauper compared with the Wall Street chief executives who are depending on the Fed to save their bacon.

Bernanke and his family listed financial assets of $1.2 million to $2.5 million in 2007, according to Bloomberg News. Federal rules require only that Bernanke and other central bank officials report the range of their holdings, not a specific dollar total.

Bernanke, a former Princeton University professor, reported that his two largest assets were annuities: TIAA Traditional and the CREF Stock Large Cap Blend. Each was worth between $500,001 and $1 million, according to Bloomberg.

He also listed Canadian Treasury bonds as an asset. That might lead some of his critics to wonder, tongue in cheek, whether he has an emergency plan to cross the border if things get really bad.

Bernanke, 54, is worth far less than his predecessor, Alan Greenspan. The previous Fed chairman, now 82, listed total assets of $4.1 million to $8.9 million in his last year in office.

Bernanke, who draws an annual salary of about $190,000 from the Fed, succeeded Greenspan in February 2006.

[raja]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

When the world economy goes down, commodities will go with it. Rogers is way too early on commodities buying.

[FRED]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

When the world economy goes down, commodities will go with it. Rogers is way too early on commodities buying.

May 2006 Rogers told us:

Rogers: Don’t get me wrong. I own both gold and silver. But it’s not an investment in commodities like wheat, sugar or corn. Gold and silver are insurance against the kind of inflation that Volcker was fighting in the early 1980s and currency related risk. If things go haywire for the dollar and currencies generally, demand for gold and silver will go through the roof. So everyone should have some, as insurance. But keep in mind if the world really gets into trouble, the demand for wheat and corn will be even higher, so their price is likely to increase even more. Gold and silver investors need to expand their horizons with respect to covering these kinds of risks.

We figured gold to hold up better than commodities when the credit bubble popped. So far, so good.

An ounce of gold buys more than twice as much oil in Dec. as in Sept. 2008

[GRG55]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

May 2006 Rogers told us:

Rogers: Don’t get me wrong. I own both gold and silver. But it’s not an investment in commodities like wheat, sugar or corn. Gold and silver are insurance against the kind of inflation that Volcker was fighting in the early 1980s and currency related risk. If things go haywire for the dollar and currencies generally, demand for gold and silver will go through the roof. So everyone should have some, as insurance. But keep in mind if the world really gets into trouble, the demand for wheat and corn will be even higher, so their price is likely to increase even more. Gold and silver investors need to expand their horizons with respect to covering these kinds of risks.

We figured gold to hold up better than commodities when the credit bubble popped. So far, so good.

An ounce of gold buys more than twice as much oil in Dec. as in Sept. 2008

That steep gradient looks like the incipient to a developing bubble...

[jimmygu3]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

May 2006 Rogers told us:

Rogers: Don’t get me wrong. I own both gold and silver. But it’s not an investment in commodities like wheat, sugar or corn. Gold and silver are insurance against the kind of inflation that Volcker was fighting in the early 1980s and currency related risk. If things go haywire for the dollar and currencies generally, demand for gold and silver will go through the roof. So everyone should have some, as insurance. But keep in mind if the world really gets into trouble, the demand for wheat and corn will be even higher, so their price is likely to increase even more. Gold and silver investors need to expand their horizons with respect to covering these kinds of risks.

We figured gold to hold up better than commodities when the credit bubble popped. So far, so good.

An ounce of gold buys more than twice as much oil in Dec. as in Sept. 2008

Fred,

I know your point was that the gold/oil ratio has risen sharply in the 6 months, but I find it interesting that you chose 2000 as your chart's start point. As you can see from the (admittedly not up-to-date) chart below, the ratio spent the majority of the 1990s bouncing around the 20 range. It fell from 30 in 1999 to 10 in 2000. This puts our current level of 18 in a different perspective than your chart portrays.

Jimmy

[LargoWinch]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

That is a great graph jimmygu3; thanks.

How ever, I wonder what good is past correlation given that crude is depleting?

I agree Fred that gold will do better in the early stages of POOM, but over the long run: crude will soar above past ratios.

[GRG55]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

That is a great graph jimmygu3; thanks.

How ever, I wonder what good is past correlation given that crude is depleting?

I agree Fred that gold will do better in the early stages of POOM, but over the long run: crude will soar above past ratios.

If [when?] we go into the next great inflation I would expect it to be led by crude 'n food. While I hold Au has "insurance" I am mindful of jk's observation that it doesn't really serve any useful purpose in end-of-the-world scenarios.

I have a close friend and sailing companion who was 6 years old when he survived the Dresden firestorm [there must be something about ocean racing that extends your life, as he is in better physical shape than me]. He's told me stories of German survivors of the war trying to exchange their gold for food and firewood. Unsuccessfully.

I am also a believer that a case or ten of good whiskey might be useful "currency" in the event of Armageddon [although I am certainly not predicting such a catastrophe]

[metalman]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

If [when?] we go into the next great inflation I would expect it to be led by crude 'n food. While I hold Au has "insurance" I am mindful of jk's observation that it doesn't really serve any useful purpose in end-of-the-world scenarios.

I have a close friend and sailing companion who was 6 years old when he survived the Dresden firestorm [there must be something about ocean racing that extends your life, as he is in better physical shape than me]. He's told me stories of German survivors of the war trying to exchange their gold for food and firewood. Unsuccessfully.

I am also a believer that a case or ten of good whiskey might be useful "currency" in the event of Armageddon [although I am certainly not predicting such a catastrophe]

the #1 unit of currency in russia after the soviet collapse... vodka.

not relevant to the usa case, however.

seems to me rogers hopes the dollar is devalued... maybe that'll help his in the toilet fund. it's off 37% this year.

since inception in 1998 the fund has returned 179% vs gold up 250%.

[BiscayneSunrise]

Re: Rogers Says Dollar to Be `Devalued,' Buys Commodities (Update2)

If [when?] we go into the next great inflation I would expect it to be led by crude 'n food. While I hold Au has "insurance" I am mindful of jk's observation that it doesn't really serve any useful purpose in end-of-the-world scenarios.

I have a close friend and sailing companion who was 6 years old when he survived the Dresden firestorm [there must be something about ocean racing that extends your life, as he is in better physical shape than me]. He's told me stories of German survivors of the war trying to exchange their gold for food and firewood. Unsuccessfully.

I am also a believer that a case or ten of good whiskey might be useful "currency" in the event of Armageddon [although I am certainly not predicting such a catastrophe]

I remember hearing that during the Japanese occupation of Singapore a bottle of Johnnie Walker was going for something like 5,000 pounds.

During our recent bout of hurricanes when electrical power was down throughout the region, coin of the realm was gasoline and ice/water.

That's it for now, back to the Florida/Alabama game!