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: September 19, 2014
KUWAIT. The global Islamic finance industry reached approx. US$1.9 trillion in assets as at end 1H2014; The report analyses the role of Islamic finance in supporting economic growth.
date:Posted: September 18, 2014
INTERNATIONAL. We have entered a new chapter in the history of central banking. This paradigm shift changes the policy tools that have traditionally defined the sphere of macroeconomic decision-making; We have built an economy that is now so leveraged that it needs zero percent interest rates just to tread water.
date:Posted: September 18, 2014
INTERNATIONAL. World Bank report spells out the repercussions of the political uncertainty and restrictions on movement and access and recommends remedial actions by all parties.
SAUDI ARABIA. Saudi Arabia will need to keep cutting oil output to sustain prices above US$100 a barrel, according to BNP Paribas and Societe Generale; "We are swimming in crude, and they know that better than anyone because they are the biggest exporter."
dhgate