Jim Rogers advises Gulf states to get rid of dollar peg
Source: BI-ME and Bloomberg , Author: BI-ME staff
Posted: Tue February 17, 2009 12:00 am

UAE. The Gulf countries' currency peg to the dollar is a 'terrible mistake' and will cause problems for the region as the US currency is expected to decline, Jim Rogers said.

The six Gulf Cooperation Council states should form a joint currency as soon as possible, the chairman of Singapore-based Rogers Holdings said at a conference in Dubai Monday.

The new currency shouldn’t be linked to any other as the region has enough foreign reserves and oil to back it up.

“You’ve got good foreign exchange reserves and a lot of oil” to back a common currency, Rogers said during a banking conference in Dubai.

Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman agreed in 2001 to form a European Union-style monetary union by 2010 to boost regional trade. Oman later pulled out.

Kuwait is the only Gulf Arab state to have dropped its currency peg to the dollar, giving it some control over monetary policy.

Gulf Arab leaders in December approved an agreement to create a central bank and single currency for the region to boost trade and strengthen monetary policy.

A single currency would allow the Gulf states to stop pegging their currencies to the dollar and implement independent monetary policy.

Rogers said the dollar will suffer because the US government’s bailout plans and the economic stimulus will increase the US debt, weakening the US currency.

“I plan to sell all my US dollars,” he said. “The Federal Reserve will continue to print money, and this will destroy any credibility associated with the US dollar.”

In a previous interview Rogers said the dollar is "going to lose its status as the world's reserve currency. It will be devalued and it will go down a lot. These guys in Washington, they want to debase the currency."

"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

Rogers has spent a career being one step ahead of mainstream investment thinking.  Amongst his many accomplishments, Rogers was co-founder with George Soros of Quantum Fund. During his ten years with the fund, the portfolio gained more than 4,000%, while the S&P rose less than 50%

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: January 21, 2018
UAE. The risk landscape in the Middle East is changing rapidly. Every day brings new challenges that considerably alter how companies respond to and manage risk; Organisations can remain strong and resilient by proactively adapting to these trends.
date:Posted: January 20, 2018
LONDON. The impact of machine learning applications - from machine vision to voice recognition - will be massively enhanced via the deployment of 800,000 machine learning centric chips in data centres this year, roughly quadruple the volume in 2016.
date:Posted: January 20, 2018
UAE. A large youth population, fast- improving mobile connectivity and a flood of new streaming platforms into the market will drive growth.
UAE. The risk landscape in the Middle East is changing rapidly. Every day brings new challenges that considerably alter how companies respond to and manage risk; Organisations can remain strong and resilient by proactively adapting to these trends.
dhgate